You already received a lot of good answers and advise, but I would like to chime in. I specialize in buyers representations and majority of my clients are first time home buyers. Buying a home in San Francisco is a very complex process and it could be overwhelming. But it is also very exciting!
In my experience, these are the important things to consider:
-determine an approximate area of interest
-determine your price point; keep in mind not only your mortgage payment, but also consider your property taxes, home insurance, HOA dues, etc.....you will ultimately do this by talking with a lender
-pre-approve and try to do so with a LOCAL Lender; of course, you should shop around and talk with few lenders, but when it comes to buying a specific San Francisco property, a local lender knows the market conditions, different forms of ownership and they can tell you upfront if they can lend on certain projects or not, therefore saving you time and money. Your Realtor can be a good lender referral source. No Realtor would like to be stuck in a transaction with an underperforming lender; you can be sure that if it happens, the lender will not be recommended again.
-find a good Realtor: you may be able to do your own research and I am sure you are very well informed about the market, but a good Realtor can guide you, help you choose an alternative neighborhood that you didn't think about before, advise on buying or not in a certain building and taking care of all the necessary documentation and disclosures.
Broker Associate, Realtor
Short Sale and Foreclosures Specialist (SFR)
Licensed in CA, #01729889
My Profile: http://www.ziprealty.com/agent/aaeby
Like us at http://www.facebook.com/sfhomezone
(1) Identify your needs, wants, budget and dependencies
(2) Survey the marketplace, neighborhoods and financing options
(3) If financing, secure lending Pre-Approval (see below) Pay off credit cards, Pull copies of leases, etc., pdf all of them.
(3)(a) If paying in cash, or stock futures from Facebook for example, start pulling together proof of funds, gift letters, etc. Keep track of any time you move or transfer funds.
(4) Attend open houses and see whatâ€™s out there
(5) Enlist an agent you trust & like to help find the right home for you as it's our job to preview & i.d. suitable homes for you once you have a good idea of what/where and when you want to make a move.
(6) Return visits - do them
(7) Have your agent obtain & review disclosures for your desired home together
(8) Make a competitive offer they canâ€™t refuse!
And, key to this process is also going through the loan application process before signing a purchase contract. This can eliminate delays and any obstacles to borrowing without jeopardizing the actual purchase when escrow gets under way.
Presenting a pre-approval letter with an offer package (opposed to a pre-qualification letter) shows that youâ€™ve been vetted by a lender and are indeed serious. Here are some of the types of documents lenders will ask you for. So, you should get them ready - and be sure to check if Lisa from HR is going out of town any time soon!
Last 2 years of W-2s &1040s for self-employed and/or tax returns
Last 2 pay stubs & employer verification
Last 2 monthâ€™s bank statements (checking, savings, IRA, Money Market, etc)
Credit report fee (banks pull their own)
Photo I.D. (Driverâ€™s License, Passport, Green Card, etc.)
Landlord contact information
12 months proof of rent payments; i.e., cancelled checks, statements, etc
Gift Letter from relatives/investors
Offer letter from new employer
Current mortgage statement/sales contract
Current property tax bill
Current Home Ownerâ€™s Insurance statement
Homeownerâ€™s Association certificate
2. Don't be afraid to back out of a purchase if you have a change of mind even after getting into contract. Once you close on a house *you and only you have to live with it*, the Realtor does not have to live with that purchase, do not try to please the Realtor.
3. Try to get into the best neighborhood you can (but only if you can handle the payment on a rainy day)
4. Remember their are other hidden costs on top of your PITI payment to owning a house you don't have when you rent (repairs, maintenance, water bill, etc...)
!. If you need financing for your purchase, know your numbers: find out what the lenders will be willing to lend to you based on your credit/financials and what it's going to cost you a month to pay for your total home expenses: mortgage, property taxes, insurance. Is it something you are comfortable paying a month without loosing sleep over it. If not, figure out what is it that you are comfortable paying a month and have the lender figure out for you how it translates into the purchase price.
2. If you paying cash, make sure you don't overpay for the property. Have your realtor show you not only what the similar homes were sold in the neighborhood, but also how much the property are listed for, which are not selling (active listings which have been on the market for a while, expired listings).
3. Find the realtor you can trust (check the references), who can negotiate a good deal for you will be able to show you not only "obvious", but also not so obvious thing you would need to know, when buying a home. Find out if the Realtor will go extra mile for you by not only showing you the properties, which are currently on the market, but is able and willing to explore other options to find you the house you can call your HOME.
If above is of any interest to you and/or you have other questions, you can call me directly at 415-819-7380 or email firstname.lastname@example.org.
Two major first steps:
1. Find the right lender - knowing how much you can spend will frame your search, and help avoid disappointment in looking in the wrong price range. And there are a lot of unscrupulous lenders out there who will promise you anything to get your business and then fail to deliver, equally disappointing is going through the whole process only to not be able to get a loan. We have three lenders we work with all the time who have never failed to deliver, not once. They are also consummate pros and I would be happy to send you referrals as you will get the VIP treatment if you use our name.
2. Find the right agent/broker- this is just as big a decision. The right agent/broker will guide you through the process of buying for the first time, help you avoid problem properties, and skillfully negotiate prices/terms to your benefit. Too often buyers don't pay enough attention to this because the sellers pay the commission. Trust me, when you hire an agent you can pay big time if it's the wrong one.
Over the last couple of years a substantial portion of our business has been first time buyers. This is a different process because you need to take the time to explain the process, get up to speed on the market, understand what the buyer's goals are and more importantly if it even makes sense for you to buy. Do not make this decision lightly, and definitely hire a San Francisco expert - this market has a lot of things going on that only happen here.
We are always available for a no strings consultation if you like.
Lance King/Owner-Managing Broker
*Review/Set YOUR Budget.
*Make sure your happy with Location.
*Make sure your happy with your Job and it's Security.
*Make sure you don't become House Poor [You will want to do things other than pay your mortgage.]
*Research and Review your 'Needs' in regards to the new property. Prioritize these 'Needs'.
*Consult with an agent that will take care of YOU and provide YOU with solid & smart advice.
First-time buyers should get their ducks in a row with regard to financing. It's a lot of work if you've had a few setbacks, but you can put your best foot forward. Take a look at these tips from ActiveRain:
â— Preparing for homeownership
â— Strategies for shopping and uncovering the best deal
â— Overview of current market conditions
â— Affordable mortgage programs
â— Review of contracts / the home buying process
â— Questions and answers with mortgage specialists
There's some good advice here, so I'll reiterate what's been said - finding a good agent to work with is key. Someone who understands you and your budget and who can explain to you the home buying process and what it entails.
The best advice I can give in a short paragraph is to make sure you have all your ducks in a row before you start looking at properties - get your financing in order, have the cash ready for an earnest money deposit and be prepared when you go out and begin looking at properties. The worst thing you can do is start looking, fall in love with a property, and then watch as someone else buys it because you weren't ready to write an offer. You'll spend the rest of your search comparing the properties you look at to "the one that got away".
Better Homes & Gardens/Mason-McDuffie Real Estate
2200 Union Street
San Francisco, CA 94123
I see some good advice below so I'll keep it simple:
Getting pre-approved by a relaiable lender or mortgage broker is the first step. Once you know what you can afford (or what you feel comfortable spending) then you realistically go out and see property that will fit your budget. That's where your realtor will come into play. Personal referrals are great. Ultimately find an agent who meets your neeeds. Some one local who understands the complexities and nuances of the SF market as well as someone who stays in touch with you and listens to your needs.
I'm always happy to help!
Rich Bennett, Realtor in SF since 2002
Zephyr Real Estate
Working with professionals who understand what you are after and who then have the ability to guide you are excellent first steps. That means an experienced mortgage professional and real estate agent. For more in-depth tips as wells as referrals, please call me at 415-200-7202.
As for learning about purchasing, many of us have very useful (and free) First Time Buyer Booklets which explain the process from start to finish. I would be happy to send you one with a Realtor's map if you would like to contact me. I would be happy to include names of lenders. You can also go to the website of David Gellman and Boyd McSparran, real estate attorneys, for some excellent articles on Tenants-in-Common, Condominium Conversion, etc. Their website is http://www.g3mh.com.
The Mayor's website http://www.sfgov.org has information on rentals if you decide to rent in the future.
McGuire Real Estate
DRE # 01898466
Once you know what price range you are in, you can start narrowing down neighborhoods. Every buyer has a wish list, and as you look at properties, keeping in mind what you qualify for, you will be able to prioritize your narrow down what features would be nice to have, what are must haves.
Good luck. You are about to embark in an exciting adventure. Sometimes you will be frustrated, but do not give up- in the end you will own your own home, something most people in the world cannot do.
415 860 0765