San Francisco’s housing market is a complicated beast—and one that can be difficult to navigate. That’s why we’re here to help. First, let’s take a look at exactly what you should think about before you bring your first offer to the table.
Get your personal finances in order
Before you even start looking for a home to buy, it’s important to make sure that your finances are in order.
The first step? You need a copy of your credit report. You can order a free copy via annualcreditreport.com, and we recommend ordering all three credit reports at once—Experian, TransUnion, and Equifax—to see if there are any inaccuracies or mistakes.
Do your research on all the finance options available to you
Speak to your bank or broker to make sure you fully understand all the options available to you. Each option has its own pros and cons, so make sure that you’re well equipped with the information on each. For example, will you qualify for a Federal Housing Administration loan (FHA)? What’s the difference between a fixed and adjustable-rate mortgage?
Don’t be afraid to ask questions—the more information you have, the better decisions you’ll be able to make.
Take a realistic look at your budget
According to the most recent data from Compass, San Francisco condos are selling at a median price of $1.2 million. If that sounds like a lot of money, it is—and it’s why it’s so important to be realistic about what your finances can and cannot afford.
List your monthly income and expenses to make sure that you’re making enough money after taxes to cover the cost of homeownership, including maintenance and repairs. Remember that there are six major expenses to consider:
- Mortgage payments (principal and interest).
- Homeowners’ insurance.
- Property taxes.
- Maintenance and repairs.
- Home upgrades (decorating, remodeling, etc.)
- Homeowners’ association fees.
Consider pre-approval for home financing
While applying at a bank or broker may seem like the more traditional route, pre-approval is becoming more popular. This is when an appraiser conducts a detailed inspection of your finances and determines if they will loan you money based on your current situation.
If you decide to go this route, you can then shop around for loans until you find the one that’s right for you. You can also pre-qualify, but this is a less thorough process. You’ll still need to fill out the full application once you’ve found a home that you want to buy.
Work with a real estate agent
If you haven’t already, it’s time to make a list of all the home options you’re considering and start viewing open houses to get a feel for what’s available to you. But it’s no secret—real estate agents are essential to the buying process.
Having a knowledgeable professional on your side offers you the opportunity to learn all about the market first-hand and provides you with a bit of invaluable external perspective.
Buying your first home is a big deal, but it doesn’t have to be overwhelming. As you can see from the above, you need to make sure that everything is in order before you start looking for homes. Having your finances in order will allow you to make a smart decision when it comes time to make an offer—and that’s the best news of all.
If you’re ready to get started on your new homeownership journey, let’s get started by discovering the best situation for you.