Rob Regan

I think that's 20 of 28 answers from non-San Franciscans. What does the Chicago market have to do with the price of tea in China? If there are foreclosures all over Phoenix, can you tell me where to find them in San Francisco?

And rates aren't low??? If you wait for 5.5% to come back, you might end up with 8%. Rates are phenomonal right now IF you have the income, credit score, and downpayment to get low 6's.

My suggestion is to use this "slow" time to educate yourself on the inventory. This is work. You need to be out every Sunday at Open houses, and you need to be scouring the MLS. You'll be an expert in no time flat, and when a "deal" presents itself you'll KNOW, and you'll be ready. Luck favors the prepared.

In the meantime.... let's look at renting.... WHAT is it good for??? If your rent is $2,000 cheaper than your monthly mortgage/taxes/HOA dues, less tax savings.... you should start "paying yourself" that $2,000 and get used to making house payments. Pay it to your savings account if you're going to buy soon, or pay it to your INVESMENT account if you're not going to buy soon (or ever based on much of the advice I just read). That is the ONLY benefit to renting.... saving to invest... either in real estate or elsewhere.

So then the question is... WHERE are you going to invest? In the stock market? Is that a safer investment than real estate? Or wiser? Or easier? Won't the stock market continue to "soften" more????

Besides, if you put $100,000 into the stock market and get a 10% return you make only $10,000. But you can buy a $1 million home with the same $100,000 and a 10% gain is $100,000. Which will get 10% appreciation first????

Uhh.... that depends..... every neighborhood is different let alone every town, every state and every section of the country. In San Francisco every block can be different. So please don't take San Francisco advice even from a person who works out of town even 20 minutes away, let alone someone in another part of the country. That's just as bad as using someone's opinion on the overall stock market when you're considering buying shares in one particular company, in one small niche. Which will go up 10%? And when? Do you're own research.... and find experts who really know the exact area you are researching.... and then do the best job of answering that SPECIFIC question for yourself.

And while you're out at the Open Houses.... stick around for a while... count how many Buyers are coming through (to the new listings), engage a few in conversation... what you'll probably find is that there are a LOT of Buyers who are "waiting for the market to soften". So the "demand" is there.... waiting. And they are building up, and getting stronger. My plate of Buyer clients is getting bigger and bigger as they all wait. That leads me to believe we are at the bottom (not much of one since some neighborhoods are up over last year, some flat, and some areas and market segments down), and once they stop waiting and start buying.... prices will go back up.

You said "loft" so I'm going to assume you are a SOMA buyer (hey Dallas or Chicago folks - any idea what part of town that is?) and if so, I believe you do still have some time, but not in that time I doubt it will go down much further... and chances are neither will interest rates.

By the way.... the Chicago, Dallas or even Santa Rosa, CA Realtors should have excellent advice for you if you ask the right question.... ask them where, in THEIR area, you can find investment properties that will cash flow. If you really aren't comfortable with the San Francisco market, investing outside of the city where a renter can pay all or most of your bills. Their doom and gloom is your opportunity. Be a contrarian... buy when everyone else thinks it's bad, and sell when everyone else thinks it will never stop going up. - Tue May 6 2008, 00:07

Potrero Hill is a very hit or miss neighborhood. If you can't walk to restaurants, or are backed up to a public housing development, or are practically on top of a highway, or in the middle of an industrial zone (or in some cases all 4 of these) you may never get the appreciation that other parts of Potrero Hill might see. In a market where buyers are taking their time doing their due diligence, I strongly advise getting to know the neighborhood's ins and outs. And then buy location, location, location. If you can walk to 18th & Connecticut you're probably in a great location, so do a 1/4 mile to maybe a 1/2 mile radius search (via the MLS - try http://www.automated-homefinder.com) for properties. You can sell a well located property in any market, and when it's up, it will be up the most.

As for future appreciation.... it's been an up and coming area for quite some time, so I'd suggest at least a 5 year outlook, if not 10, if you want to see appreciation over other parts of the city. - Mon May 5 2008, 22:48

I'd personally steer clear of BMR's. There is no guarantee of appreciation even if the rest of the market appreciates as it's tied to median income gains. For more on BMR's try http://www.sfgov.org/site/moh_page.asp?id=48083

BMR's are also sold via lottery because there tends to be far more buyers than inventory, and you are not allowed to pay more than the asking price, so everyone submits almost identical bids, and one lucky bidder wins the "lottery". If you find 19 other buyers on each BMR you submit on, you have a 1 in 20 chance of winning, so it may take 20+ offers before you get one.

If you can only afford $300,000 you're going to want to buy outside of San Francisco, otherwise you'll be looking for "fixer" studios in the least desirable areas of the city. You may find something you'll like more in Oakland, and you will find many options within a 45 minute commute to the city in that price range. But in the city $300,000 is a virtually non-existent price range.

Personally, if you must live in San Francisco, I'd suggest buying an investment property outside of the city, and find the cheapest rental you can. Alternatively, you'll need to get an "investment" partner to buy something in a higher price range here in the city. A parent or relative maybe? Even up to $500,000 your options are quite limited in San Francisco (the city). Find a roomate, pay $1000 per month, and buy an REO (bank owned foreclsosure) in Santa Rosa and put a renter into it (just one scenario). As to risks of foreclosures... the advice below has been good... all purchases are similar to all other home purchases, except that you need to be especially diligent during your inspections of the property. The bank will disclose next to nothing, so you have to do all of the investigating of problems yourself. So working with an experience Realtor, property inspector, and title company will be important. - Mon May 5 2008, 22:27

A stubborn Seller shouldn't factor into YOUR analysis. You've started with all of the right questions... and yes, Buyer paying normal Seller closing/transfer fees is normal in a probate. But you can factor those extra costs into your purchase offer. If it's going to cost you $10,000 extra dollars on closing costs, and $10,000 extra on double rent/mortgage payments, and $10,000 on repairs, then figure out the fair price of the condo, and make your offer that price less $30,000.

Now, the Seller might refuse... but if you are making a "fair" offer, chances are no one is going to offer more in this market (maybe in 2004 they would have, but not in 2008). A Seller can stomp their feet and pound their fists all they want, but if they are over priced, they're not going to get any offers.

In addition, "As Is" is an almost meaningless phrase. The only thing it means is that they are forewarning you that they won't do repairs. But you should write a contract with a Property Inspection contingency, and if you uncover extra repairs and expenses that you had not expected, you then ask for repairs or a reduction in the purchase price. They can refuse, but then you can break the contract subject to your property inspection contingency. Chances are if you get that far, they'll negotiate.

So start with a "CMA" (comparable market analysis) to determine the fair market value of the condo (try http://www.evaluate-my-home.com if this is in San Francisco) and then deduct the extra expenses you'll incur, and make that your purchase price. If someone offers more than you... well, that's not a smart investment price for you. Unless it's a "luxury" that you're willing to over spend on to get, don't get emotional and spend more than the condo is really worth. - Mon May 5 2008, 22:00

The question appeared to be for the city of San Francisco... property taxes here are 1.141% of the purchase price for the 2007-2008 tax year. http://www.sfgov.org/site/treasurer_page.asp?id=8099

Taxes are paid 50% twice per year. The first installment is due no later than Dec 10th, and the 2nd by April 10th. You can pay online at https://services.sfgov.org/ptx/intro.asp - Mon May 5 2008, 21:11