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San Francisco, California, often referred to as “Everybody’s Favorite City”, is known for its picturesque beauty, diverse community and cultural attractions.

Enjoy the breathtaking views of the Pacific Ocean and San Francisco Bay from the Golden Gate. Feast your eyes on world-class theatre shows, opera, symphonies, and ballet performances. Devour scrumptious cuisines in China Town, Fisherman’s Wharf and Michelin star restaurants inside the city. It is undoubtedly one of the most beautiful cities in the world.

Not only do the views astound people, but the high prices and competitiveness of this market astonish first-time homebuyers in the city.

As of August 2018, the median home value in San Francisco is $1,349,400. Home values have gone up 7.0% over the past year and based on predictions, they will rise 6.2% within the next year. (Source:

Here are some strategies and factors to keep in mind to acquire a dream home in San Francisco:

Competition with All-cash Buyers
Because of the many all-cash buyers in San Francisco, consumers needing to have financing will have a harder time closing on homes. Many of them will get outbid by hundreds of thousands of dollars, in all-cash deals. Before making an offer, consumers need to disclose all financial information to the bank and work with the best lender that can process the transactions briskly. It’ll entice the seller and ensure a quick closing on the house.

Cheryl Bower, a licensed agent and one of the top producers at Zephyr Real Estate, shared one of her strategies in competing with all-cash buyers. She says, “About 20-30% of offers on a property may be all cash. It depends on the location, and many of them are purchasing the property for investment purposes.”

She beats them out by providing the seller an intro letter of the buyer that includes their photo, a pre-approved loan letter from a reputable lender, and their purpose for purchasing the house. In this way, sellers will have  background knowledge about the buyer and their full interests and commitments to the purchase.

Financial Stability
Obviously, the housing market in San Francisco is expensive – and there’s nothing new with that. In fact, prices continue to rise. A home purchase in this city requires a hefty down payment and at least 1% of the total expected purchase price for closing costs. Consumers also need to add in the expenses of property taxes, homeowners insurance, and fees, etc.

“A pre-approval letter from the lender is a strong proof of the consumer’s financial capabilities,” said agent Bower. This will show the consumer’s seriousness in the pursuit of the property. She added that to make the offer more assertive and stronger, she suggests removal of contingency periods to show the seller that the buyer is comfortable and satisfied with the condition of the home. Assuming also that the seller has provided thorough inspection reports.

Another strategy is offering a free-rent back to the seller with no charge. This allows the seller to stay in their home at a specific date until closing. This will help the seller buy some time for the transition process.

Assistance from the best agent
Selecting the best agent will be the consumer’s key to success in closing their dream home. In an aggressive market like San Francisco, it is crucial to choose local agents who have their finger on the pulse of the housing market. It is one of the markets to watch out for as a lot of things can happen within a month or two.

Author Comment: Agent Bower says it is important to interview full-time agents to know about their experiences in the industry. Real estate designations are one of the things consumers need to look for to know the agent’s expertise in the field. Her high-track record and the good relationships she built with her clients paved the way to her success in the industry. She always assures her clients that the transaction will be smooth and she makes sure she meets her client’s needs.

Top 5 Areas in San Francisco that appreciated the most over the past year
(As of August 2018, data gathered from Zillow)

Lone Mountain – The median home value in Lone Mountain is $1,850,400. Home values have gone up 14.9% over the past year and predictions say they will rise 1.1% within the next year.

Noe Valley – Home prices in Noe Valley have gone up 11.9% over the past year and it is predicted that they will rise 3.5% within the next year. The median price of homes in Noe Valley is $2,146,400.

Outer Sunset – This area’s appreciation rate has gone up 11.2% over the past year and probabilities are, they will rise 5.8% within the next year. The median home value in Outer Sunset is $1,276,500.

Inner Richmond – The median home price in Inner Richmond is $2,053,800. This value has gone up 10.1% over the past year and may rise 5.1% within the next year.
Excelsior – Excelsior’s appreciation rate has gone up 8.1% over the past year and predictions say they will rise 7.9% within the next year. The area’s median home price is $1,042,200.

Author Comment: Agent Bower left a tip for the consumers who want to buy homes in San Francisco: “Consumers frequently want a single-family home upon purchase, but I highly suggest to keep their options open. Condominiums, for example, are a good starting point, to build equity which can offer the opportunity to upgrade into a single-family home in the future. It’ll be easier to upgrade it into a single-family home once they started earning or their equities have increased.”

The process of buying a home in a competitive market like San Francisco can intimidate and stress consumers, especially first-time homebuyers. But with proper preparation and assistance from the best agent, it will make the experience worthwhile.

Kathleen Chiras

Kathleen Chiras is the associations manager and web manager for the Colorado Exlusive Buyer Agents Association.

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