TOP QUESTIONS SF BUYER'S ASK
How long is the home buying process?
Search, Offer, Escrow
The search, offer process and contract acceptance varies based on each client’s unique situation. A good baseline backed with real client data is 94 days from our first meeting to you getting your keys to your new place! (94 days is based on a survey of my past 10 clients). Keep in mind, this is the average with some journeys shorter and some longer but 94 days is a good baseline for expectations.
Why so long?
A main factor impacting the length of the process is the simple law of supply vs. demand.
90% + offers are multiple offer situations hence incredibly competitive in the bay area coupled with low inventory tends to elongate the process.
Is the entire time about searching?
The 94 days includes the “Escrow” period which average 25 days (you enter escrow once an offer is accepted) and if cash, they can be as fast as 7 days. So, the hunt time on average 70 days.
How can you help speed up the process and by default make you more competitive?
Secure a “loan commitment” vs. just a pre-qualification letter. This basically means an underwriter has reviewed your complete file and all is needed is purchase contract, appraisal and some minor conditions for the final loan approval. Getting past just a pre-qualification letter to Loan Commitment is key to not only speeding up the process but it makes you more competitive when you do submit an offer!
What Works with My Budget?
A great first step is to get you in touch with a couple of lenders, they will help you understand what you need in order to qualify for a loan, what the tax benefits are from a monthly cash flow perspective and what the different types of products are out there and help you identify which will work best for you to achieve your goals. Here is a LIST of documents the lender will need to process your loan application.
When do most properties hit the market & How do offer dates work?
Traditionally you will see most new listings in SF come on the market on Friday followed by a series of two weekend of open homes, a midweek evening open home and Tuesday Broker tours.
Offer dates are typically set 12-14 days after the property hits the market. It is key to see the unit early in the marketing cycle to allow us enough time to pull together an offer strategy which involves viewing the property multiple times, securing answers to questions about the property, reviewing the Disclosure Packet, analyzing data to identify a solid offer price and pulling together the elements of the offer for the presentation.
Property Search Tip!
- Whatever your budget is, take 10% off the top and use that number as your top end search criteria. List price is a marketing tool and the majority of homes go for over list price so the 10% cushion provides you a more realistic number to target when you are searching online for property.
- Example, if your budget is $1M, you should search for properties $900Kish and under since a home priced at $1M will likely go for $1M+. The percentage over list price varies by neighborhood, 10% is a good baseline to start with. As we explore in more detail, I will provide you with more detailed comps and add our local market dynamics knowledge to help guide you to a competitive offer price when the time comes.
What is a TIC?
There are 4 main products in SF: Single family home; Condo; Coop’s; TIC’s. TIC’s are more common in SF than most cities, so it is not uncommon to not be familiar with them. You will run across TIC’s in your search, so it’s good to have the basics. TIC’s are different from Condos in many ways, however the key areas involve: 1. Financing; 2. Property Tax Billing Process; 3. TIC agreement vs. CCR’s.
To net it out, the area which most impacts my buyer clients is the financing. Institutional lenders (BofA, Wells, etc) do not lend on TIC’s. A limited number of banks lend on TIC’s as they since the loans are not packaged and sold in the secondary market, the lenders are portfolio lenders such as Sterling Bank, Bank of SF, Bank of Marin. The loans typically require a minimum of 20% down payment and in some cases more. So if you are pre-qualified or ‘loan committed’ by a bank, you will likely have to apply for a TIC loan.
The feature article on the site provides a great overview from Andy Sirkin who is basically the godfather of TIC’s. On this site, you will also find other information on TIC’s.
What is a disclosure packet?
The disclosure packet provides insight into the activity/interest in the property. If buyers are interested in a property and want to uncover more information after they view, the agent will request the “disclosures.” It’s not a perfect science, however on average the typical conversion from number of disclosures distributed to conversion into offers is about 40%-50%.
Do I pay the agent?
No, the buyer does not pay a fee to be represented in a transaction, the fee is paid by the seller of the home. Find more details HERE
SF Real Estate District Map
SF is divided into 10 real estate districts with sub districts. HERE is map with the districts which will come in handy when you receive MLS listings.