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6 Truths to Understand if You’re Buying a Home in San Francisco

For years now, the San Francisco housing market has been its own animal. Buying a home is the Bay Area is simply a different experience. If you’re gearing up to dive in, or you’re already in the thick of it, here are six truths to understand about buying a home in San Francisco.

Listing prices are usually just marketing prices.

It’s common practice around here for homes to sell over asking price — well over. Bidding wars aren’t necessarily the goal, but when you have more people than houses, the competition is going to be fierce. That means a home’s true value isn’t necessarily indicated by the listing price. A good practice is to assume the listing price is a starting point. At the same time, markets change and often more quickly than people’s perceptions can catch up, so don’t assume something is automatically going to sell for 10% over its asking price either (although we certainly have been experiencing that). It’s best to ask a qualified agent whether you’re looking at the real ‘trade price’ or a teaser price.

Money talks – but cash is not always king.

High price points are the standard in San Francisco, and to the highest bid usually go the spoils. But don’t assume that just because you’re a cash buyer, you’re at an immediate advantage. An offer that has better terms, no contingencies and a 21-day close — even with a loan – can and often does win over cash. Add a perfectly written letter to the seller telling them what you love about their home or what they did to upgrade it, and that often trumps the almighty cash offer if the sellers are the type who care about the next family in their home. That happens far more often than you might guess. 

Contingencies are risky.

Offers with contingencies are going to be passed over in favor of one that doesn’t. It’s not ideal from the buyer’s perspective, but it’s the truth. This is where your agent’s experience and insight will prove invaluable, so do your homework up front so make sure you’re working with someone who knows the market well and can help you troubleshoot potential pitfalls. Every municipality has their own unique challenges. 

Unlisted homes are a good bet.

Another area where the right agent is as good as gold — they have access to listings that you can’t find online and their network means they have insider information about what’s coming to market. The earlier you know about a potential property, the better off you are even if they want to go to open market.  

Don’t stop with the pre-approval letter — get fully underwritten.

Houses go on and off the market quickly in San Francisco, so it’s critical that you’re ready to move. Don’t stop with the pre-approval letter from your lender. A complete offer packet shows sellers you’re a serious buyer. Your agent can direct you to trusted lenders that will do their work and run you through their underwriting process in advance. The property you purchase still has to appraise and qualify the bank’s standards, which vary widely from bank to bank.

Be prepared to walk away.

When you put in an offer on a home, it’s because you can really picture yourself living there. You’ve mentally moved in, and you just know your sofa is going to look amazing in that front room. If you lose the house to another buyer, it’s normal to feel gutted. But there is a small silver lining — whomever just outbid you is no longer in the market. Trust your agent, and move on. 

The home buying process can be an emotional roller coaster, and having someone who can expertly and thoughtfully guide you through the ups and downs matters. If you’re buying or selling in the San Francisco Bay Area, I’d love to help.

CalBRE #01224570

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