Finding a home for a reasonable price can be daunting for many first-time home buyers. It’s far more intimidating to pull off in the Bay Area. San Francisco is one of the highest-priced markets on the continent. That doesn’t mean homeownership is impossible, though. Never assume the list price is the final price you will pay. This is important because many homebuyers do not realize just how much difference between the purchase price of the house and the actual selling price.
There are several ways to approach the problem of finding a home at a price that is lower than the current market value. The first thing that potential home buyers should consider is the area that they want to live in. An individual must take into consideration the type of neighborhood that they would like to live in. Many times, finding a home in an appropriate area will save them thousands of dollars on their mortgage. Many times, it has been said that houses located within the proper area of a city or town will sell for more than homes located outside that specific area.
Check for neighborhood and negotiate as much as you can
When individuals consider a neighborhood, they should also consider other factors such as access to public transportation, schools, shopping, etc. These factors can make a huge difference when finding an affordable home and an excellent place to live in. Another way to reduce the cost of a home is to negotiate with the seller on less than the final sales price. Sometimes the seller will be willing to reduce the price if certain things are done before the closing date. For example, many times, a seller may agree to hold onto the home for two months after closing to ensure that the homeowner is entirely comfortable with the home’s location. In most cases, homeowners are happy to pay less money so that they can move in immediately.
In addition to negotiating a price, finding a home on a budget can often be achieved simply by shopping around. Since many individuals are moving to San Francisco, homes are sold in a hurry, so the competition for the home often drives the price up to an amount that is far below what the house would typically sell for. This is often due to unqualified sellers. It is also since there are many more homes for sale in the immediate area than there are buyers. Some people believe that this creates an excellent opportunity to get a great deal on a beautiful home.
Compare the prices over Internet
The Internet has dramatically increased the number of homes and buyers available to homebuyers. One great advantage of the Internet is that it often allows you to comparison shop. This means that you can see homes side by side and compare their prices before purchasing anything. You can often find a great house at a less high priced than what you would usually pay.
Rent out a small area if possible
Brace yourself for high prices. The San Francisco market is already sky-high in terms of costs, making it hard to get in the front door, quite literally. However, consider becoming a landlord if you do buy a place. If you can get a place with more space than you need, rent rooms out to roommates. Even better, look into turning basements, above-garage spaces, and mother-in-law suites into apartments. If you can rent out parts of the home to others, you might be able to have someone else pay a huge chunk of your mortgage.
Get pre-approved mortgage
Get pre-approved for a mortgage before you go shopping. This is one of the most significant financial transactions you’ll ever make in life, so don’t overdo it. There are two benefits to doing this. First, you’ll know how much you have overall to spend on a home, so you don’t waste your time looking at houses you can’t afford. Second, you’ll know how much your mortgage will set you back every month, and that might be more critical budget-wise than your overall spending power.
Don’t look for homes that already have everything you want or need. Given the high prices, you might be better off getting a fixer-upper and patching it up the way you wish to over the months or years ahead. If you’re moving to San Francisco from somewhere else, don’t get scared over homes that don’t have air conditioners. They’re just not that common or necessary here.
Finding a home is often an overwhelming process. However, if you take the time to find out more about your options and determine what you can afford, finding a home should be much easier. Make sure that you keep realistic expectations. There is no such thing as a free home!