5 things to know about buying your first home in San Francisco

Are you making the move to buying your first home? Maybe you just got a job in the Bay and you're ready to stop renting. 

I get it, I've been there. 

And I wish I could say buying is easier, but SF is a beast when buying a home. 

But that's why I'm here to help you throughout the process. 

Here's 5 things you should know about when buying your first home in San Francisco. 

1. Get Pre-Approved. Get Pre-Approved. Get Pre-Approved.

Adding it three times will hopefully empasize the importance of this point. 

This doesn't necessarily apply to just San Francisco. This should apply to any home you get, anywhere.

But in San Francisco, it is uber important because the average housing price is 1.1 million. 

And the seller of the home is going to want to know you can afford the monthly mortgage payments, maintenance, HOA, you know, all that good stuff. 

And that's what a pre-approval letter can do for you. 

You send the bank all this information, documents and anything that shows your debt, income and other financials. They use this information to determine how much "house" you qualify for. 

So let's say you get approved for $750K but not $1M. While this may be sad because you found the *perfect* house on Zillow for $1M, you wouldn't get approved by the bank so sending an offer would waste both you and the seller's time. 

So the pre-approval first and foremost knocks out any homes that you can't afford. It saves you time when going on showings! It will also help the Realtor get you in a home that you can afford, but not necessarily every amenity you originally requested. 

Next, the pre-approval letter will help you when you present an offer. When you're in SF, you may face competition with all-cash offers. It happens. BUT if you have a pre-approval letter, that makes you one step closer to getting the home over someone else. 

Now that you know how much house you can afford, you should go on a few showings. 

2. Be willing to budge on the neighborhood.

If this is your first home, I'm going to assume that you want to be near your workplace. Let's say you work in the Valley, but all homes in the Valley are $1M.

Since your previously mentioned pre-approval letter said you can only afford $750K, you have to be willing to budge on the neighborhood. 

Don't feel bad. Most buyers want that *dream* neighborhood. But here's the catch. 

You're living, or going to live, in San Francisco. Do you know what that means?

That every neighborhood offers something different. 

There's so much more than living in the Valley. 

In fact, one of the hottest markets right now is Vallejo.

While it is 32 miles outside of SF, it does have a ferry in connection to the city. 

And the housing is WAY cheaper.

So keep your options open. 

One of the best ways to know which neighborhood is right for you is to look at your current stage of life and priorities. 

Sounds cheesy, I know. But trust me. 

If you like to surf, then live in Sunset District. If you have to travel throughout the city for sales calls or presentations, then live in East Bay.

This will help eliminate many of the neighborhoods that do not match your current stage of life. 

We're in the process of writing a guide on all the different neighborhoods and areas within San Francisco. Keep an eye out for it. 

3. Don't rush to offer the listing price. 

So you've got your pre-approval and looked at different neighborhoods and homes. You've got the fun part out of the way. 

Now here comes the competitive part. 

You found the house you want, and it flirts with the upper-end of your pre-approval at $740K.

Since you want it before anyone else can get it, you decide to offer for the full listing price. 

This is where I can come in to help you. 

There's two situations that can occur when this happens. 

1. Uncommon scenario: There are no other offers on the property. So, the seller accepts the offer because they got their full listing price. They win because you could have bid lower and still got the property. 

2. Common scenario: There are multiple offers on the property. So, the seller says he or she will make a decision and decides to go with the buyer who offers $750K instead of you who only bid $740K. The seller wins again because you could have bid higher and got the property. 

So how do you know how much to offer? 

Me and you will sit down and check out the market. If homes are selling fast, then we will ask above the listing price normally. Vice versa for when homes are selling slower in the market. 

So, while you think offering for the full listing is great, wait and see if that's the most competitive offer you can give. 

4. Weigh all of your home buying purchase loans.

So let's say your offer moves forward, now we get into all the paperwork. We have to see which loan option the lender says is right for you. 

While the lender is typically right, it is good for you to research all of your options as well. 

While across the U.S. you have some programs like FHA, Conventional, VA and USDA, you may benefit more from a California-specific mortgage program. 

Here are a few examples of California-specific home loan programs: CalHFA, Cal-EEM, MyHome Assistance Program, School Teacher and Employee Assistance Program and CalHFA Zero Interest Program.

5. Make sure your home is a good long-term investment. 

While this may seem obvious, it is often ignored. 

The perk of you buying a home in SF is that you have no idea which neighborhood can become the next Mission District. 

With that in mind, you should watch market reports.

The market reports can help you monitor select neighborhoods to see which ones are seeing higher housing prices and an influx of buyers. 

That's where you want to buy. 

Or maybe it's the neighborhood no one is looking at right now. 

But I can help you figure out. 

After all, when you are ready to sell your first home, you want to make sure you make at least 5% more on the sale from your original purchase. 


If you have any questions, chat me on the site and I'll follow up with you. I'd love to help you in the process of buying your first, second or third home in SF.