The San Francisco Real Estate Purchasing Process

To ensure the best possible purchasing experience, there are certain steps that should not be skipped. Let’s walk through the basics of a typical real estate transaction, with a focus on details that are sometimes overlooked.

Determine your budget. Deciding what you can realistically spend on a home will eliminate the distraction of houses you can’t afford. As a rule of thumb, the price of your new home should be two-and-a-half to three times your annual household income. But you need to consider how much you can afford each month on the costs of homeownership. A mortgage professional or lender can help forecast loan amounts and scenarios based on your financial situation.
Cash in hand. Keep in mind, your down-payment is not the only cash payment required for the purchase of your home. There will be closing costs, costs of inspection, taxes, and other expenses to consider. If you purchase a condo you may have to pay dues to a Homeowner’s Association, which can be hundreds of dollars each month. It’s wise to reserve some cash from your budget to cover these expenses.
Get Pre-Approved. The pre-approval process involves disclosing your financial information to your lender or mortgage broker. He or she will determine the mortgage amount you are reasonably able to carry and give you an approval letter stating that they agree to lend to you up to that predetermined amount. Pre-approval is an important tool. Any offers you make on a property will be taken more seriously if you already have financing secured.
Know what you want and what you need. Knowing what you’re looking for in a San Francisco property makes it easier to find. Make a list of things you need—such as a garage or a certain number of bedrooms—and a list of things you want, but could live without, like a finished basement or a minimum square footage. Purchasing a home is a substantial financial investment, but first and foremost it’s a lifestyle investment and should meet your personal needs.
Find a San Francisco buyers agent. Your agent should have the expertise, market knowledge, and resources to find the most suitable properties based on your wish list and budget. He or she will manage the paperwork for the sales transaction on your behalf, and negotiate on your behalf during closing. Remember: the listing agent is hired—and paid—by the seller. A buyers agent will make your interests the priority and that’s crucial to negotiations. South Beach Real Estate agents are ready to help you find your perfect property, contact us to get started!
Search for San Francisco Properties. Your agent will identify properties based on our wish list and budget. It is important to view—or have your agent view—as many of these properties as possible, even if they are slightly outside your criteria or comfort zone. A good agent will have information on the area, and make detailed observations on the property that the untrained eye might not catch. Eventually you will find the property that best fits your needs, and it will be time to make an offer.
Make An Offer. Once you decide to make an offer, you need to determine the fair market value of the property. Your South Beach Real Estate agent will prepare a Comparative Market Analysis, detailing recently sold properties in the area similar to your prospective purchase. This will help you set an accurate price based upon local market trends. You should price your offer based on the comparative sales rather than the list price, and let the true value of the home dictate what you are willing to spend. Your agent will deliver the offer to the listing agent and negotiate on your behalf regarding conditions and terms.
Closing Escrow. Escrow is a neutral party that manages all the documents and funds relevant to the transaction. Once your offer is accepted, there is a period of time—usually thirty days—within which all conditions must be met by all parties. Schedule a walk-through to take place within twenty-four hours of closing to verify you are receiving the property in the condition you expect. Once all conditions are met, the transaction will close escrow, and you will be the proud owner of your new San Francisco home!

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