THINGS TO KNOW BEFORE BUYING A HOUSE IN SAN FRANCISCO

 THINGS TO KNOW BEFORE BUYING A HOUSE IN SAN FRANCISCO

Are you ready to buy a house in San Francisco? If you're reading this, this question is still ringing in your ears. Buying a property in the United States is no small feat. Add to that, buying a house in one of the most competitive markets in the United States... In this article, we'll try to provide you with a set of elements that will help you prepare for this investment. Whether it's for your assets, your primary residence, or for rental purposes, there are important and concrete things to know. So let's take a look at what it's all about.

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Be sure you want to buy a house in San Francisco

Feeling ready to buy doesn't necessarily mean you are.

A home can be a huge investment, especially in San Francisco… Just look at market prices on sites like Zillow or Realtor .

So before you commit, consider all your options and goals.

How do you know if you're ready to buy a home in San Francisco?

First of all, the answer varies depending on what you're looking for. Do you want to buy your primary residence? Or do you want a second home? Or is it even a rental investment? There are as many situations as there are correct answers.

What we can know.

Looking for your primary residence is, in our opinion, one of the most difficult options, depending on how you react to the project. If, like most people, you're putting emotions into the purchase of your primary residence, then be careful! Try to keep a step back. But also, have you really asked yourself what's more advantageous in your situation? Renting or buying? That's a question that needs to be answered.

In a property and/or rental investment, the data are different, emotion should only come into play very little (except for a second home which is not intended to generate profit). Therefore, you must still find out a minimum about the market and above all, get support!

It's all about timing

In real estate, a quote that comes up very often is "Don't wait to buy real estate, buy real estate and wait." While this general quote may have exceptions, it is not the case for San Francisco.

Many so-called "experts" recommend waiting for the market to fall before investing. We believe this is an aberration, although it can be true in very specific markets. Overall, there's never a better time than now. Especially in markets like San Francisco.

What type of market does San Francisco represent? It falls into the category of very stable, very strong, and very resilient markets in the face of crises (COVID-19 isn't that far off). Therefore, by investing in these markets, the growth trend is stable over many periods. While there are always natural limitations, this city hasn't experienced them yet.

This is why the second part of the quote is true: buy real estate and wait. This is particularly true in this city and a market with very strong economic fundamentals. No need to explain again how strong the digital industry is in this area...

So don't wait for prices to drop (as some recommend) but rather buy your property correctly at the right price and be patient.

Know your market and study the neighborhoods

This is a great segue from what we've just seen; buying at the right price is key to successfully purchasing your home in San Francisco. This applies whether it's a primary residence or an investment.

In order to be in a position to correctly purchase your property, here are two major tips:

- Find out a minimum amount in advance

-Get someone to accompany you

As for the support part, we'll come back to this a little later. Regarding the need to find out information, two objectives emerge.

-Know the neighborhoods and their typology to determine your purchase.

-Have an idea of market prices

Obviously, if you have the opportunity to visit the site, there's no point in telling you that it's in your best interest to do so. Real estate is a hands-on business, and even if you're not very knowledgeable, you'll never waste time or money going there.

Of course, if this is impossible, there are solutions, as we will see, but in any case, you must seek support, whether on site or remotely.

Without going into more detail about San Francisco's neighborhoods ( check out this article to learn more ), there are a few things to keep in mind. If your budget is limited, you'll obviously want to go to more outdoor areas.

When affordability is key, your best bet is to look to the outer boroughs.

The neighborhoods closest to the ocean are some of the last "affordable" areas of the city.

For family buyers, the Outer Sunset neighborhood can be a great option. It's close to parks and schools, which is one of the reasons why this neighborhood is so popular with families.

This provides more space, parking and access to public transport – and there are more homes available on the market for buyers.

Learn more about the city of San Francisco

Types of houses in San Francisco

San Francisco's Victorian and Edwardian homes are quintessential to the city. It's no surprise that nearly half of the city's homes were built before 1940. This is an important fact to know.

Today, these older homes are most often found in the most desirable neighborhoods such as the city center.

While there may be few choices for Victorian homes in the San Francisco real estate market, there are several other classic California styles spread throughout the city:

Italianate houses: A hybrid style of farmhouse and Italianate country, built when the first settlers arrived after the Gold Rush. Decorated with brackets on the roofs and hooded windows and doors, many of these structures were destroyed after the 1906 earthquake, but those that still stand are located west of Divisadero (Eureka Valley, Noe Valley, Dolores Heights) and the Mission.

Stick houses: houses built from redwood trees from the city's neighboring redwood forest.

Mission Homes: Think of these as renovated Spanish Colonial homes. You'll find these homes in Glen Park, Sunset, Richmond, Noe Valley, and the Outer Mission.

Art Deco Homes: Clean, sharp-edged architecture with geometric elements, most of San Francisco's Art Deco homes are found in the city's most upscale neighborhoods, such as Pacific Heights, the Navy, and Sea Cliff.

Early Suburban Tract Homes: Once the population began to increase, the city streamlined its housing production, adorning neighborhoods with suburban homes with similar floor plans; found in Marina, Sunset, Richmond, Excelsior, Visitation Valley, Hunters Point, Bernal Heights, Noe Valley, Potrero Hill, and Glen Park.

Some of these older structures are an emblem of the Golden City, ingrained in its DNA, but they often come with many problems due to their age.

This is why, as we will see later, a certain number of processes must be put in place upstream.

Hire a local real estate agent

Gathering information is a prerequisite, as we've outlined in this article. However, you're still limited. Be aware that not all information is good, especially online. So, if you're seriously considering moving to the Golden City or investing in it, your best bet is to connect with someone who knows the area. As one of the most competitive markets today, it's important to find a real estate professional you trust.

A buyer's real estate agent in the United States, and more specifically in San Francisco, offers many advantages to these buyers. It allows them to save an average of $103,346. They will also be of great help in finding the property that's right for you.

However, not all real estate agents are good. Or at least, not all of them necessarily meet your expectations. To find the best match for your needs when buying a home in San Francisco, there are several options to consider. Obviously, referrals are still very effective, but more commonly, word of mouth remains the most effective. You can also learn about profiles using many online tools.

A natural environment to be anticipated and considered

The United States has a hostile natural environment! Don't forget, if you're familiar with Europe, the United States is a drastically different country in this regard. Indeed, entire areas of the country experience recurring natural disasters. Fortunately, innovation and insurance tools have greatly reduced the risk. Nevertheless, this must be taken into account before your purchase.

You should therefore be aware that there are risks of earthquakes.

There are seven major faults in California, and the most significant of these seven are the San Andreas Fault, which runs directly through the peninsula, and the Hayward Fault, which spans the East Bay. In 2014, the United States Geological Survey (USGS) warned that there was a 72% chance that an earthquake of at least magnitude 6.7 would strike California within the next 30 years.

However, even such drastic statistics don't seem to worry Californians enough to actually invest in earthquake insurance. In fact, statewide, only 13% of California households have earthquake insurance. However, their laid-back Cali attitude probably isn't to blame here. Earthquake insurance is expensive, with high premiums and deductibles.

Here are some tips for earthquake insurance:

Review the JCP report (the natural and geological hazard report for the address).

Understand the house's foundation and the type of rock it rests on.

Is there liquefaction?

What material is the house made of? (Many houses are still made of brick, which isn't very resistant to earthquakes.)

So much reason once again to seek support and to put in place upstream inspections.

Do a home inspection 

This is a great help and allows you to look to the future with greater peace of mind. Therefore, the goal is to have a specialist agent conduct an inspection before signing the contract. A report is then submitted detailing potential issues with the house.

But is it expensive? Well, yes, it can have a cost, but the calculation is easy since, through this report, you're not just buying a piece of paper listing the house's problems. You're already buying liability; the inspector is liable if he or she doesn't detect a major problem that arises later. Then, this same report can be a source of leverage allowing you to largely renegotiate the price; this same negotiation will largely outweigh the cost of the inspection.

When buying a home in San Francisco, things can move quickly. For this reason, never forget to have an emergency inspection. A home inspection will help you make a better decision because you'll get more information about the properties to consider.

Define and know your budget perfectly

Buying a home in San Francisco can be expensive, so it's crucial to know how much you can afford. In any case, you should definitely know your maximum capacity (whether in cash or with a loan).

You need to understand your financial resources, as well as the costs associated with purchasing a property. For example, a pre-purchase inspection report should be part of your budget.

Knowing your financial capacity perfectly also helps you make decisions quickly. And speed can help you get the right property in many situations.

Finally, obviously, defining the budget in advance limits your search and allows you to focus on the type of property you need.

Take advantage of the seasonality of the San Francisco real estate market

This is a characteristic of the San Francisco market that is worth being aware of, as there is a certain seasonality in transactions.

What does this mean? Simply put, the city's property inventory is higher at a certain time of year.

How can you take advantage of this? Simply by buying properties when inventory is at its highest.

The busiest inventory period is March, April and May.

However, make no mistake: this doesn't necessarily mean these are the best months for buyers.

In fact, the most experienced agents in the Bay Area say a good time to buy is during the holidays. If people haven't been able to sell their property, things can be more negotiable.

In addition to getting the timing right, understanding the city's current culture and economy is essential.

Obtain as much information as possible before starting your process.

In conclusion, here are the key tips you need to know. Arm yourself by researching as much as possible. This will allow you to then begin your search to find the right person to support you.

Also, if you already have knowledge of the area, this can be a great advantage for you, especially if you are not there.