Going without a buyer’s agent.

A San Francisco buyer’s agent will narrow your field of choices—very time consuming in an over saturated market—so you spend time viewing only relevant properties. If a property needs a new roof or has water damage in the basement, a good agent will point that out. And how do you know you know a night club isn’t planned next door? A good agent will understand the zoning laws and point out potential problems.

Maybe the most important reason to work with a buyer’s agent is price negotiation. In many cases, the agent you met at the open house is the listing agent and works for the seller. He or she is on the seller’s team when it comes time to negotiate the sale. A buyer’s agent works for you. He or she will not only provide qualified price negotiation, but thoroughly understands the actual value of the properties that interest you. This will help you maintain your parameters, achieve your goals, and enjoy the best possible purchasing experience.

Making an offer based upon price rather than value.

The price of a San Francisco property and its value are not necessarily the same thing, and the difference is often surprising. Any offer you make should be based on comparable sales of similar properties in the area where you are searching. It would be a mistake to offer full asking price for a one-bedroom, one-bath condo that lists at $850,000, when a similar unit in the same development recently sold for $750,000.

But the reverse is also true: if the same South Beach condo, with similar comps, is listed at $700,000, there will likely be other offers above the list price. You want to make a competitive offer, but you should not overpay. A good buyer’s agent will help you factor in the property, location, and current market conditions to make a reasonable offer.

Over-extending financially.

Loan pre-qualification is a smart way to begin. It gives credibility to any offers you make, but is also gives you a concrete idea of what you can spend. A direct lender or mortgage broker will factor in your available down payment, and weigh your monthly income against the debt you already carry (referred to as your debt-to-income ratio), to determine the size of mortgage you can reasonably afford to take on. This will establish the maximum loan amount for which you will be eligible.

But there’s more to your monthly payment than the mortgage itself. You will also have to pay taxes, homeowners insurance, utilities and maintenance fees, as well as HOA fees if you buy a condo. It’s usually best not to make a purchase at the top end of your budget.  Your lender will qualify you for the maximum amount they feel you can carry, but it’s up to you to decide what you are comfortable with.

Also keep in mind that your down payment is not the only cash amount you’ll need to make your purchase. Add to that inspection fees, transfer tax, and any repairs to the property not negotiated into the contract. Your South Beach real estate agent can thoroughly explain these costs and a help you come to a realistic estimate of what you will have to pay up front.

Rushing into the Purchase.

It’s easy and understandable for a buyer to get excited and rush into making an offer without knowing about the neighborhood or viewing enough alternatives. But these are crucial steps and should not be skipped. It pays to learn all you can, especially about the  purchasing process itself.

Your San Francisco agent can give you the information you need about the market, the neighborhood, and property values. Before you dive into an offer, ask as many questions as it takes for you to feel excited and comfortable with the purchase you are making. To speak with a real estate agent about purchasing a home, please contact us!

Skipping the property inspection.

Sellers are required by law to disclose a great deal of information about the property. But these disclosures may not include everything you want to know. Questions about the age of the roof, the stability of the foundation, or the shape of the electrical and heating systems are best answered by trained professionals. Make sure you include a contingency in your purchase offer that requires the property to pass a home inspection without major issues.

With such contingency, the seller will choose—and pay—the inspector to meet the requirement, and you will have to trust that the inspection was honest and complete. If you plan to make large changes to the property, consider hiring your contractor to accompany the inspector. This will give you an idea of what any potential repairs will cost, and what it will take to make your intended changes.

Skipping the home inspection could leave you with faulty plumbing, dangerous electrical wiring, and a roof that needs replacing within the first year. Your home is a large and serious investment, and you deserve to have all the information before you hand over that down payment.

Remember, there is no such thing as being too educated about the process of purchasing property. The help of a trained professional, and clear knowledge of what the property is worth, are invaluable tools no prospective homeowner should be without! Contact a South Beach Real Estate agent to get your property search started on the right foot!

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Following these steps will help to ensure your home is sold at the best possible price in the shortest amount of time. Remember, there is no substitute for the knowledge and experience of a professional real estate agent. Contact us today for more information on how we will work with you to sell your property!

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Fewer buyers consider over-priced properties, which may lead to price reductions. This can give buyers a negative impression of your home’s value, or imply that it has problems. It’s far better to price your home right than to arrive at an appropriate list price after having started too high.

Market value is the golden rule for selling your home. Pricing slightly below market value increases buyer interest, while pricing above market value reduces it. Your agent will perform a Comparative Market Analysis, which examines similar properties currently on the market or recently sold, along with their list and final selling prices. These prices, measured against the list prices of homes competing for your buyer pool, will determine the right price for your property.

The Pricing Pyramid below illustrates the correlation between buyer interest and the price of your home.

Reaching more potential San Francisco buyers means finding an actual buyer more quickly. Studies show that first five weeks on the market is the window during which the most profit can be made on your home—especially weeks three, four and five.

A San Francisco home priced too high will most likely sit on the market beyond this critical period, and become a “stale” listing. When this happens, it can appear to buyers that something is wrong with your home and that it has a history of rejection. This has a negative effect on buyer interest and reduces the chance that someone will make an offer.

The graph below illustrates buyer interest activity across certain weeks on the market.

Pricing your San Francisco home correctly from the start can make the difference between a quick rewarding sale and a stressful unpleasant experience. Your South Beach Real Estate agent is happy to provide you with a Comparative Market Analysis and listing presentation that details how best to price, prepare, and market your property for sale.  Contact an agent today!

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Household Repairs

You know what they are — that leaky faucet, the overgrown landscaping, the burned out light bulbs— potential buyers don’t want to think about repairs. That’s especially true for larger fixes. Maybe you need to paint your living room or fix damaged flooring. You might even need to waterproof the basement, repair an outdated roof, or replace the water heater. Fix anything you wouldn’t want to have to fix if you were the buyer. Don’t give buyers an excuse to walk away without making an offer!

Cosmetic Changes

Make sure your San Francisco home’s best features are easy to see. Remove clutter,  put away laundry, clean off counters and table tops. The perceived size of your home is more important than the actual square footage. Oversized furniture can make your rooms seem smaller than they are, so consider removing larger items into storage to open up space. Dim lighting makes spaces seem tight, so make sure your windows are clean, leave the shades open and be sure all overhead lights and lamps are working at full capacity.

Staging your San Francisco Home

Having your home professionally staged can give you a significant advantage, especially in a buyer’s market. Stagers are trained to make your home appeal to the largest possible number of people, with stylish but neutral décor designed to emphasize the best features of your property. Staging can make your home seem bigger, brighter, and overall better than the competition. The cost of having your home staged is usually less than the amount of your first price reduction, and the positive impression it can make on a buyer justifies the expense!

Renovations

How does your San Francisco home compare to others of similar price in your neighborhood? Making updates can really pay off, but choose wisely—some changes have a bigger return than others. A new kitchen or an added bathroom can return 90% of your investment. Updates to an existing bathroom can return 80%. Finishing a basement on the other hand  returns only 40% on average. Be competitive in your market, but don’t over improve. Buyers may not think of paying for a second-story addition as a worthwhile investment in a neighborhood of one-story homes.

The goal is simple: make the best first impression. Scrutinize the competition and walk through your home with the same critical eye. Fix that doorbell. Move that chair so you can see the fireplace when you enter the room. Remember, a first impression is a lasting impression, and you want your San Francisco home to stand out.

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1. 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.
2. 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.
3. 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.
4. 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.
5. 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!
6. 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.
7. 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.
8. 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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