Want to estimate property tax on a listing you’re interested in buying?

1.2% of the purchase price is a good, conservative rule of thumb. This is the annual amount but property tax is paid twice a year.

For example, on a $900,000 home, the annual property tax will be about $10,800.

Your lender will estimate this as a monthly payment when computing your PITI.

P= Principal loan payment

I= Loan interest payment

T= Tax payment (figured monthly)

I= Insurance payment (figured monthly)

In an condo, instead of PITI, use PIT-HOA since your HOA condo fee will cover the building’s insurance. You should get your own policy for the interior and your personal belongings…

Want info on SF Property Tax? Visit the City website.

For information on your property tax bill: view and print your bill, pay online, appeal your assessed value, etc etc, visit San Francisco’s Office of the Treasurer. You’ll find all the information you need!

Want to estimate property tax on a listing you’re interested in? 1.2% of the purchase price is a good, conservative rule of thumb. This is the annual amount, btw.

For example, on a $900,000 home, the annual property tax will be about $10,800.

Frequently Asked Question: Why Have Your Own Buyer’s Agent?*

At the risk of overly exciting the bloggers over at Curbed SF with my scintillating content, I’d like to explain the benefits of working with your own agent (Realtor) when you are buying a home in a complex market like San Francisco.

Top 10 Reasons It is Smart to Hire Your Own Agent When Purchasing a Home:

1. It costs you nothing. Your agent works on a contingent basis as opposed to a retainer like a lawyer. Your buyer’s agent will be paid in the form of a commission from the seller’s proceeds upon the close of escrow. You will pay nothing for their help and expertise, and they will only get paid if you find and successfully purchase a home.
2. Even though you do not pay money for their services, you are contractually bound to each other which means your Buyer’s Agent has a fiduciary duty to represent your best interests. Plus, if they are a Realtor (and they most definitely should be!) your agent must adhere to a very strict code of ethics. Your agent will represent your best interest in the purchase of ANY property listed with ANY real estate company or For Sale By Owner.
3. Your San Francisco buyer’s agent will help you determine how much you can afford. Working with your mortgage broker, your agent can give you advice regarding unforeseen costs of ownership and affordability. Just because you are pre-approved for a certain amount does not mean you should be…
4. Your real estate agent will fully explain the buying process to you and prepare you, in advance, for what to expect. They should guide you through the process every step of the way and help keep you informed all of the time.
5. She or he will provide you with statistical and comparable sales information so that you can make an informed choice on the offer price for the home you want. Even though it is pretty easy to find active listings on the Web at sites like Trulia and Zillow, recent, accurate and reliable Sold data remains mostly within the control of MLS members like your agent.
6. Your real estate agent will consult, negotiate and act as your project manager. She or he will negotiate the price and terms of your purchase on your behalf. Your agent becomes your sounding board, your confidante, and sometimes even your therapist during the buying process. You’ll be speaking or emailing with them almost daily during escrow so make sure you like your agent!
7. She or he will walk you through the massive amount of paperwork with clear and accurate explanations.
8. Your Realtor sells property full-time (or at least, they should) so she or he will have access to dependable mortgage brokers, home inspectors, title and escrow companies, home insurance companies, moving companies, etc. They can assist you with the transfer of utilities and be a resource for all sorts of service providers like hardwood floor re-finishers, custom shutter fitters, plumbers, electricians, handymen, painters, gardeners, and so on.
9. She or he will be present during the closing process, keeping you up to date as the loan funds and your names are recorded on the property’s title. Most likely, they’ll attend the closing or signing appointment with you at the escrow company and certainly, be available to review the closing papers for accuracy.
10. A good agent will act as your real estate consultant long after the close of escrow. For example, I often and consistently hear from past clients who need referrals for home repair folks or just want to know what the market is like. Whether or not, they will be selling or buying more real estate, I am there as a resource for them…for life.

Ask about our complementary San Francisco Home Buyer’s Guide: How To Stop Worrying and Love Buying a Home!

* Most agents will act as both Buyer’s and Seller’s Agents depending on their clients’ needs. When I say “Buyer’s Agent,” I am referring to a full-time licensed Realtor who will represent you as your buyer’s agent. They will also work with sellers on other transactions. Personally, I’m not a proponent of “buyers-only” agents b/c their knowledge of both sides of the transaction will be limited.

Here’s a guide to closing costs. In other words, who pays what?

This list is a general guideline of charges and may not be wholly inclusive for your transaction.

Read the rest of this entry »

Recently, a client asked me about how to choose a mortgage broker.

She wanted to know if it was necessary or smart to get preapproved by more than one lender since she was still figuring out who would have the best interest rates and programs for her. She wasn’t ready to choose a mortgage broker yet so she was unsure of how to get more information and proceed on preapproval.

Here’s what I told her.

My recommendation is to work with one mortgage broker. You will get the best service and the best rates from someone who knows that you are committed to working with them.

They can feel confident knowing that you are taking their time and their help seriously. This will make them more attentive and more apt to give you the best options available. Experience shows that the best professionals, be them Realtors, mortgage brokers, CPAs, attorneys etc, get most of their clients through referral so it behooves them to provide excellent, valuable service.

No mortgage broker can forecast precisely what rate you are going to get ahead of time. They can give you estimates based on today’s rates but until you have a property and lock in a rate, it will change. Imagine a stock broker telling you that you will be able to buy Google stock in a month, 6 months, a year for $x amount. Interest rates like stock prices fluxuate daily and it is impossible to 100% predict the future.

So what should you do if you are not ready to buy but want to have a sense of what you can afford so you can casually look at property? Get prequalified.

I recommend my clients interview a few mortgage brokers (preferably referrals from me or other trusted advisors in their lives) on the phone and then set up an in-office meeting with the 1 or 2 person they feel will best represent them. Based on your consultation with them, choose a mortgage broker with whom to help. Have this person do your full preapproval when you are about 3-6 months away from your desired moving date.

Do not have your credit score run by multiple mortgage brokers or lenders as it can lower your score. You can look up your own score with no harm done by going to www.myfico.com and pulling a report yourself.

Use this score to get prequalified rather than preapproved. You’ll have a good sense of what you can afford so you can look around. When you get serious about home buying, you can do the full preapproval.