The secret to a successful home search is simple: Know what you can afford.
Here’s an example of what can happen if you ignore that reality: You get preapproved for up to $1.5M and are interested in buying a single-family home in the city. Armed with your list of ten houses priced at around $1.5M, you unexpectedly see a home you love and offers are due in two days. That leads to a scramble for an agent who can help you throw together your first offer. The agent tells you the property will probably sell for well over list price, but you submit your offer at asking anyway. I mean, why not give it a shot, right? Later that night, the agent calls to let you know that the sellers received five offers and accepted the highest and best.
And so it goes.
To avoid that inauspicious beginning, get your Realtor on board early in the process so he or she can give you an idea as to what you can realistically afford—and help you decipher relevant selling patterns.
It’s important to break down this type of data into neighborhood-specific sales. For example, the two-bedroom house with parking in Bernal Heights will most likely have a different value than the one in the Central Sunset.
Don’t get sucked in by teaser list prices. With very few exceptions, those properties in good locations listed for $1.1M, for example, will be selling for more like $1.3-$1.4M. In the end, it’s possible to buy a suitable home without having to write 25 offers to achieve your goal.