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By Baron Chestney | Broker in San Francisco, CA

Home Buying Advice for the San Francisco Bay Area - Baron Chestney's Blah Blah Blog #7

2% cash rebates for home buyers and 2% commission discounts for home sellers with the Baron!

So, you want to buy a home in the San Francisco bay area. Okay, first, you'll want to have 20 percent down and excellent credit, so you can get preapproved for a home loan. If you use a small local bank or a credit union, you can quickly be on your way to home ownership! Or, if you enjoy self torture, you can also pursue the difficult and tortuous path of pursuing a home mortgage loan through one of the big banks, but be forewarned: the rates they advertise are very low, and the fees and terms seem almost too good to be true, but that's because they would only apply in the unlikely event that they actually make you a loan! Remember, the big banks are erecting all sorts of obstacles and barriers and conditions to attempt to prevent you from getting a loan. They will send their appraisal goons out to inspect the physical condition of the property, and then demand that various repairs and modifications be made to the property prior to the loan being funded. These repairs are often mandated to be paid for and done by the home buyers, even though they are not yet the legal owners of the property! Another favorite bank trick is to demand some sort of documentation from the borrower(s) at the last minute, especially one that they know the borrower will be unable to provide. "Online banks" or "internet banks", in particular, really love to use that tactic. Last but not least, when in doubt, the bank will simply stall, delay, and bury the borrower's file in administrative red tape, such that deadlines are missed and conditions of the contract cannot be met in time, and they will never give a definitive answer to the question "can we remove our loan contingency now?", despite the fact that they are well aware of the deadlines involved and the fact that the borrower's earnest deposit money may indeed be entirely at risk at that point. Buying a condominium? Whatever you do, DO NOT use an out-of-state (non-California based) bank, such as an "online bank" or "internet bank".  They do not understand California lending laws and will surprise you at the last minute by telling you that they cannot make the loan. (For single family detached homes, this problem does not arise -- only for condos). Don't believe us? Go ahead and give it a try. Use a big bank, and see what happens! Use an out of state (non-California based) "online bank" or "internet bank", and see what happens... Please, just DON'T be one of OUR clients! If you want your home purchase to fall apart as a result of attempting to finance through a large bank, or any out-of-state "online bank" or "internet bank" (for a condo purchase), please be someone ELSE'S home buying client! 

If at all possible, the best way you can acquire real estate these days is by using CASH. Once again, cash is king. That's what the foreign investors are using. Cash assures the seller and the listing agent that your financing will not be falling apart.  It greatly improves your chances of having your offer accepted, for that very reason. Try to have between one and two percent of the purchase price to cover closing costs, in addition to your down payment. You may encounter some competition from foreign investors, who are finally beginning to swoop down like vultures into the San Francisco bay area real estate market. Many of these have been salivating at an opportunity to purchase a piece (or several pieces, why not?) of our country's BEST dirt (San Francisco Bay Area real estate, that is) at dirt cheap prices. While enjoying cheap vacations here in the U.S., courtesy of our weak dollar, these foreign investors are also noticing the very low home prices and calling back home to have cash wired here to facilitate an all cash purchase of a bank owned property, or any other properties that strike their fancy, for that matter. In many San Francisco Bay Area cities, the average monthly rent payment already  far exceeds that of what a mortgage payment would be, so it is actually cheaper to own than to rent! In many other bay area cities, rents are steadily rising, and will continue to do so until the average rent will exceed the average mortgage payment.  If you can get a loan, the interest rates are the lowest they have been in American history. San Francisco bay area home prices have already bottomed out and are now on the rise.  The time to buy is certainly now...

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