Have you been in the market looking for your house and getting outbid many times by others for the house you love? You are not alone. Below are some facts why this is happening. Once you know the facts, we will give you 4 tips to help you get the key to your first home soon.
Fact 1: Properties in San Francisco are red hot, with demand much higher than supply. This has been consistent since 2009.
As last reported by the California Association of Realtors. Source: CAR
Fact 2: Some areas in San Francisco are more in demand than others. Look at the numbers and if you want to buy in the Mission, you will need to have a very good strategy planned with your Realtaasa real estate agent.
This house in the Mission sold at $1,450,000 in 10 days. Listing price was at $1,199,000.
This condo in Outer Sunset sold for only $10,000 over asking price, but the seller has the house on the market for a long time, 102 days.
Fact 3: Many realtors are trained to list houses very low compared with the final sales price. This strategy has worked well in San Francisco for them. It attracts many potential buyers for a lower price that they, the realtors, can record in their database for future business. More importantly, having many offers will make the realtors look good to the sellers who pay them well and give them more referrals. A win for the realtor but a big frustration for buyers who do not get the offer accepted, especially first time home buyers who spend days doing research and dreaming about a house listed for $849,000 that sells for $1,136,000 in 10 days!
This house in the Mission was listed at $998,500. It was sold for $1,510,000 in 10 days. And lots of offers from inexperienced buyers. Should be no surprise, the sold price per square foot for this house is comparable with others that have been sold in its neighborhood. The listing price is just a teaser price, do not hold your hope high!
Fact 4: The tech industry is not the only one to blame for increasing house prices in San Francisco. We live in a global world where many people in other countries get richer in the last few decades. San Francisco is one of their desirable places to live or invest due to many factors: weather, culture diversification, quality of life, quality of education and strong real estate laws are the main reasons for international investment to pour in real estate in San Francisco.
With all the above facts and Realtaasa’s experience with the Bay Area real estate and co-owners, here are the 4 tips:
Tip 1: First thing first: Know exactly how much your home buying budget is. Get help from Realtaasa to get a pre-qualified letter from a lender. Unless you love to look at houses as we do, why waste your time looking at houses priced over what you can afford? Home shopping is time consuming and can be frustrating if you are not prepared. Many give up after a few months, only to find out later that prices have gone up again.
Tip 2: If you find something you do not like about the house that cannot be fixed easily, walk away. Examples are neighborhood, public transportation, foundation problem.
Tip 3: Be persistent, keep making offers on the houses you like. The more houses you see and bid on, the better you will be at the bidding game. Plan for at least 4 to 6 months before you move in your home.
Tip 4: As you can see from the following examples, the bigger and more expensive houses are actually cheaper per square feet, per room and have less competition. This is where co-ownership makes sense. Just like buying a whole pie is cheaper than buying many slices separately. Look and compare prices of a 1- bedroom, a 2-bedroom and a 3-bedroom condos in the same area.
This 1-bedroom 1-bath condo in the Mission was sold for $825,000 in 12 days with multiple offers. Competition is fierce for first-time homebuyers in the lower price range.
For only $100,000 more, you can buy a 2-bedroom 2-bath condo in the same area. That’s less than $500,000 per room, compared with $825,000 above. Go look for your co-buyer and move in!
This 3-bedroom 2-bath condo in the same area sells for $1,135,000, making your room and shared common areas even more affordable at $378,000 per co-buyer. And better quality of life in a bigger, more expensive place.
Would you buy the 1-1 or co-own with other buyers? Let us know, love to hear from you!