10 Things to Remember When Buying a Home in San Francisco whether it’s a Mission Loft, a Noe Valley Edwardian, a Bernal Heights Victorian Cottage or an Inner Sunset Mid-Century:

1. When buying a home, bite off more than you can chew but not enough to choke. Remember, to get to the penthouse you must first get on the elevator. (Or take the stairs but who wants to do that?)
2. It is not the cost of the home per se; it is the monthly cost to you that matters most.
3. Reasons to buy a home in order of importance:
1. You want to live there.
2. Investment
4. Commit to a home for a minimum of 3 to 5 years.
5. If you can help it, don’t put yourself in a position where you will be forced to sell at any given time.
6. A home will appreciate or depreciate no matter what kind of financing you have on it.
7. Develop a relationship with your Realtor as you would with your doctor, lawyer, accountant, etc. Build trust and rapport so you have someone you can count on to always tell you the truth and represent your best interests. To do this, work only with that agent for your real estate buying and selling. She or he can even recommend agents up to their standards in other parts of the country if you move or buy an investment property elsewhere.
8. Learn as much as you can before you make the offer. Read a book, read this blog (shameless plug), read our Home Buyer’s Guide, sit down with your agent and go over the whole process ahead of time.
9. Spend money on inspections. Let the buyer beware so hire an expert to inspect your new home.
10. Interest rates go up for primarily 2 reasons and both are GOOD for real estate:
1. Healthy economy
2. Inflation

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.

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According the 2009 California Housing Market Forecast from the California Association of Realtors, prices will continue to decline into early 2009 while the number of sales will continue to increase. Of course, we usually have a holiday/winter slowdown.

What does this mean?

On the one hand, prices continue to adjust downward. Most economists foresee the decline to level soon-ish. How’s that for vague?

On the other hand, more homes are selling than was projected.

This signals the beginnings of the turnaround. Buyers, in particular first time buyers, are getting back into the market. Many would-be home buyers are realizing that this is a rare opportunity for them and they don’t want to miss it. Rates are low and prices are down. No one knows how long it will last.

As housing inventory lessens due to increased buyer activity, the market will be able to rebound. It is all about supply and demand, right?

Keep in mind that the following is for all of California. As one of the world’s biggest economies (8th, right?), our real estate market is huge and varies greatly from place to place.

My advice to folks considering buying or selling San Francisco real estate in today’s market:

To the first time buyer: BUY (This is a “once in 10 to 15 years” kind of opportunity. TICs, Condos, Lofts and some single family homes are ON SALE. Rates are great and loan options abound for those with low or high down payment.) Read more here. FHA loan info here.

To the home owner of 1-3 years: HOLD (Stay put and enjoy your home. It will be a great investment in time. Don’t worry! You own your home in one of the World’s most coveted Cities! You are not a renter! You save money in taxes!)

To the homeowner of 3-5 years: HOLD or TRADE-UP (Ask us to help you determine what your current home is worth AND what your next dream home costs with today’s discounts. Depending on the answer, it might be more profitable to move-up. Plus you get the house of your dreams. Benefits of Trading Up in a Down Market HERE.)

To the homeowner of 5+years: TRADE-UP or DOWNSIZE (Long-term gains in San Francisco real estate remain substantial. Take advantage of the discount in the home your really want, whether it’s a easy-living South Beach condo or a trophy house on Liberty Hill.)

From CAR:

C.A.R. FORECAST CALLS FOR PRICES TO LEVEL OUT AND SALES TO RISE IN 2009
Home prices throughout most areas of California will post declines next year, while sales of existing homes will continue to rise in 2009, according to C.A.R.’s “2009 California Housing Market Forecast,” released today during CALIFORNIA REALTOR® EXPO 2008 (www.realtorexpo.org), running through Thursday, Oct. 16 at the Long Beach Convention Center in Long Beach.

“The current uncertainty about the financial system and economy is likely to persist over the next several weeks, and could extend into next year,” said C.A.R. President William E. Brown. “Our forecast assumes that the financial system will begin to show signs of stabilization late in 2008 and into early 2009.”

The median home price in California will decline 6 percent to $358,000 in 2009 compared with a projected median of $381,000 this year, according to the forecast. Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.

“Sales in 2008 will be ahead of last year by 12 percent, with a further increase of 12.5 percent expected in 2009,” said C.A.R. Chief Economist Leslie Appleton-Young. “However, the next couple of quarters in late 2008 and early 2009 will be marked by seasonal decreases in activity, with a pickup expected by the second quarter of next year.”

Trading Up in a Down Market: The Benefits

I’ve blogged before about the benefits of trading up or moving up in a down or flat market like we have here in San Francisco (i.e. going from your “starter home” to one that has more room and the location you really want).

However, I never took the time to actually lay out what I mean. Here goes.

Example:

You bought your starter condo for $600,000 at the top of the market which was 2004/2005. The place you really wanted (we’ll call it your dream home) was worth about $900,000 back then.

Say San Francisco home values are down about 10%. It may be more or less depending on your location and property type but for the sake of this example, let’s use 10%.

Your condo is now worth $540,000, a $60,000 decline.

Your dream home is now worth $810,000, a $90,000 decline. See where I’m headed with this?

If you chose to sell your condo at the reduced price and move up to the bigger home, you will end up saving money.

The difference between your “starter” and your dream home was $300,000 at the peak. The difference is now $270,000.

Net savings = $30,000

If you sell in a down market, you are also buying in a down market. If you wait for the rebound in a year or two, your dream home will also have rebounded.

Don’t look at your real estate plans as a single, isolated event. It’s gotta be in context. Consider your entire transition from one home to the next.

A good way to start is to find out what your home is worth AND what your dream home is worth. See if the math makes sense.

Bernal Heights

Just 5 of the Reasons Why I wish I was a First Time Buyer Right Now:

1. I’d finally have a **** chance to get my first choice home rather than lose out over and over again in outrageous bidding wars!!

For the first time in many, many moons (most say since 1990-1991), San Francisco real estate is not a crazy seller’s market. The playing field is MUCH more even. In some micro-markets, it is even a buyer’s market.

In general, the market is balanced and for a chronically “low supply / high demand” city like San Francisco, this means the outlook is extremely good for home buyers.

Although this may last well into 2009, it will not last forever. SF has had a strong, expensive real estate market since the Gold Rush and this latest financial debacle is not likely to change this reality.

2. I could actually pay a decent price for my starter home.

Okay, there is no “fire sale” in San Francisco but there are some darn good values right now. Home price appreciation has stagnated and in many cases, home values are down (think lofts, TICs, some condos, and single family homes).

Over the long-term, even 5 years or more, San Francisco real estate prices remain way up. Remember, real estate is a long-term investment… However, in the short-term, prices are down or flat. This means a home buyer can expect to pay 2005/2006 prices for many properties.

THIS IS A RARE, ONCE IN A DECADE OR MORE HOME BUYING OPPORTUNITY.

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Haha, so I know you are thinking that this is the most self-serving real estate blog post that could come from a San Francisco Realtor but c’mon….hear me out!

Rather, hear out my buddy (not that we’ve ever met) James B. Stewart, a columnist for SmartMoney Magazine and SmartMoney.com who wrote recently in the Wall St Journal about what we regular citizens…you know Joe and Jane Six-Pack or for us San Franciscans Joe and Jane Latte…can do to help the markets.

“As president Franklin Roosevelt confronted far more dire circumstances than anything we’ve experienced in my lifetime, let alone last week, and yet he never succumbed to panic, desperation, greed or, most famously, fear….

The proximate cause of last week’s crisis in the financial markets, which evidently brought us to the brink of economic catastrophe, was paralysis: the refusal of banks to lend virtually anything…As paralysis seemed to grip our major financial institutions, I felt some of this myself…”

Sound familiar to anyone reading this? No, not you Ms. Fence-Sitter and certainly not you, Mr. Time the Market Perfectly!

But I digress.

“In times of financial crisis, collective action can achieve what would be unacceptably hazardous for any one individual… Put that way, $700 billion strikes me as a not unreasonable price to pay for the stability of the financial system on which our entire economy and collective well-being rest…..

The administration’s proposal hasn’t been accompanied by much high-minded rhetoric aimed at the American people. That is unfortunate. The plan, no matter how expensive or sweeping, will fail if all of us continue to be gripped by fear and risk aversion.

It is time for all of us to summon the courage to invest calmly and rationally and in doing so demonstrate our confidence in the potential of the global economy and our fellow man.

What, in practice, does this mean?

It means continuing to accept and even embrace a prudent degree of risk.

It means to continue following a disciplined approach to asset allocation and investments…

It means to continue rebalancing your portfolio…

It means considering investment alternatives. I found myself looking at real estate listings…

Based on my perusal this weekend, in some parts of the country we have reached the kind of opportunity to buy real estate that only comes along once a decade, if then.”

Read the entire column HERE.

Here is this week’s Bernal Heights Real Estate Report:

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Week to week we are reporting what the monthly real estate activity is for the Inner Sunset neighborhood.  This week the results are…

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Presidio Heights, Seacliff, Laurel Heights, Laurel Village

Let’s talk about the fancy part of town, shall we? While you may immediately think of Pacific Heights, for the really big homes head to Seacliff and Presidio Heights.

If Pacific Heights seems a little too crowded or pedestrian for your tastes, you might head for Presidio Heights or Seacliff.  

The homes in these neighborhoods are downright palatial and not for the faint of pocketbook.  But as the saying goes, you get what you pay for and these homes are absolutely stunning.  

Bordering the Presidio, now a national park & home to George Lucas’ newest Industrial Light and Magic campus, and the ocean, Presidio Heights and Seacliff are quiet, serene and exclusive residential neighborhoods.

Laurel Heights lies just south of Seacliff and, in addition to being a lovely neighborhood in its own right, serves as a commercial district to its statuesque neighbors.  Elegant antique shops line Sacramento Street and, in the window of one, a stately old Weimaraner keeps a restful eye on passerbys from a lush purple armchair.

There is a host of restaurants, coffee shops, gourmet food markets and a movie theater. In Laurel Heights, you’ll also find the fabulous Jewish Community Center which has recently undergone a major renovation and offers classes, workshops, youth sports and enrichment activities, as well as social events.  It also has one of the best gym facilities in town (open to the public)!

If you’re recently had a baby or need to buy a gift for someone who has, visit Day One.  The store is located on the second floor of an office building (there’s a stroller-friendly elevator) and caters to all things baby, including clothing, gifts, gear, toys, books, feeding supplies, changing tables, weight stations, nursing areas, classes and support groups. It is the go-to spot for new San Francisco mommies and daddies.