Buying Archives - Mike Plotkowski

Buying a house in the Bay Area might be your dream. It’s an enchanting one at that.

But purchasing a property in this gorgeous location isn’t for the faint of heart. There are many things to learn before you begin your house hunt. (And this is likely why you need help from professional and skilled real estate agents like the Mike Plotkowski Team)

Here is the ultimate guide to help you decide where you can live in San Francisco and how you can find your dream house. Enjoy!

How Much Does It Cost To Buy A House In San Francisco?

According to Realtor, you can find a house for sale ranging anywhere between $300K and $29.5M. The median listing price in San Francisco is $1.4M, while the median listing home price per square feet is $959.

The down payment of a median priced house in SF can cost you around $300k, or much more depending on the final sale price and how much you have to put down.

Other coastal cities in the United States also have high real estate prices, but many factors make San Francisco a great place to live, including the pleasant weather (sometimes;), amenities, parks, entertainment, sports, and other activities.

You can find the pricier homes with modern interiors and lavish exteriors in the following neighborhoods.

Potrero Hill
Pacific Heights
West of Twin Peaks
Noe Valley
Presidio Heights
Marina
Castro-Upper Market
Twin Peaks
Haight-Ashbury
Seacliff

Many famous celebrities, business executives, and doctors live in these SF neighborhoods, including Tom Hanks, Bruce Lee, Mark Zuckerberg, and others.

It’s no surprise that properties in these locations go up to 7.75X the national median, and the tax rates follow suit.

Is the Bay Area Housing Market Competitive?

You have to be competitive throughout the process, from finding a house in your required neighborhood to the closing process. Yep, that means there are all-cash offers sometimes. But not to worry if you need a mortgage, a strong offer with as few contingencies as possible always has a chance.

With 184% year-over-year sales growth, San Francisco had the largest gains in home sales in 2020, followed by San Jose and Miami with 150% and 120% sales growth, respectively.

Pro tip: A competitive edge goes a long way in purchasing your desired house and avoiding a bidding war. You can do this by simply identifying a house for sale before it goes on the market. This means you need to find properties that are not listed on different house-selling websites. Mike has 6 proven ways to find these off-market properties for his buyers!

Finding Your Perfect Neighborhood can Be Stressful

Buying a house in some of the most popular and demanding neighborhoods is not easy because of competition. You may not get a house in a neighborhood of your choice.

Don’t be discouraged. There are plenty of luxurious and fancy houses in other neighborhoods with high-end amenities. This is why research is important, and if you don’t have any idea about the Bay Area, it’s better to get help from professional realtors. Once you find a location, visit the neighborhood, and see if you are comfortable there. Make sure to search about crime statistics and amenities it offers.

So, whatever features or amenities you need, including school districts, commute, outdoor space, and others, find a neighborhood according to your interests and lifestyle.

Lastly, also consider how long you are planning to live in this house. If you are planning to start a family or you have children, purchasing a property in Twin Peaks may be a much better option for you. Wondering why? This neighborhood has some of the best and famous schools in the Bay area. This is another reason to consider every factor before choosing a San Francisco neighborhood.

Look for Property with the Best Features

Buying a solid house in a good neighborhood with reputable schools or institutes nearby will prove to be a long-term investment. It will increase the value of your property and give you an edge over others.

Every property in this area is unique and has something different to offer. Some have scenic ocean views, while others have larger lots or are located on a quiet cul-de-sac. Homes surrounded by parks are also in demand. Make sure that your chosen property offers features that no other house in the neighborhood can provide.

If needed, Consider the Best Schools in Location

Reputable and excellent education institutions always stay at the top of every parent’s priority list while buying a house. As the main concern of parents is to give the best education to their children, they may look for a house nearest to the best school instead of a high-end condo far from the institute. Therefore, homes in a good school district are demanding and go faster on the market.

In short, if you are planning to purchase a house in school districts, you may have to start looking months in advance. The competition is high, so try to use every method to find the houses for sale in this area. But before that, you can choose the best school for your children in the Bay Area.

Look For Easy Commute

Another thing you need to consider is the commute. In the Bay Area, the traffic is increasing, and there are more cars on the road lately. Just to cross the Bay Bridge, you need at least an hour or more during rush hour because of the growing number of commuters. So, which neighborhood will be best for you in terms of commute totally depends on the location of your office and business. This is unless you’re working remotely, of course.

Prepare for the Closing Process

When you are buying a house in this city, you also need to know that sellers and buyers can opt for a separate closing process. You don’t need to sit in a conference room with everyone else to discuss the closing. These days most of the process occurs remotely and electronically, making the task simpler and easier.

You will get a document before the closing with all the closing costs that you have to pay. You can choose between wire transfer and cashier’s check to pay for the costs.

It is important to note that you have to sign many documents before the closing day. Since you will be getting the ownership of the house, you have to do more paperwork than the seller.

Get Help from a Real Estate Agent

Yes, you can use online tools to search for the right home. But contacting a real estate expert can save you hundreds of dollars, effort, time, as well as missed opportunities. They have insights into your desired neighborhood and know the trends of the real estate market. The best thing is experts can give you an edge in the highly competitive market. These professionals also help you find the best house and negotiate a price that makes sense given your goals.

Additionally, when you search online, you might also find homes at relatively lower prices. But do you know that buyers set a low initial price, as they know a bidding war will ultimately increase their sale price?

Bottom Line

In a nutshell, buying a house in the Bay Area requires extensive research, knowledge, and planning. You can’t just get into the market and buy your desired house a week later.

Assuming you have other work or family responsibilities, going with a realtor who knows the San Francisco market inside and out is how you work smarter, not harder. That describes Mike Plotkowski to a tee. Let’s chat to see if we’re a good fit to represent your home purchase.

Owning a new home in San Francisco is an exciting accomplishment for many individuals and families due to the stunning environment and location.

However, it’s easy to get caught up in picking new colors for your building or setting up a move date, and then forget your tax responsibility as a property owner. Yikes!

Essentially, once you own a home in San Francisco, you join the list of individuals who combine to generate $2 billion for the city annually. This funding helps the government engage in important projects for the city like building new schools, better hospitals, and repairing damaged roads.

As a new owner in the San Francisco area, you must understand the important factors of the city’s tax to avoid future complications or scams.

Below are the top 8 things you need to know about San Francisco Property Tax Rates.

1. Cost of San Francisco Property Taxes

It’s important to clarify that San Francisco property taxes are not fixed amounts as they often change every year due to the property’s assessed value. An assessed value is a financial worth given to a property for tax purposes. In other words, your home’s assessed value determines your property tax rates.

Ultimately, the tax rate is measured using this assessed value as the city currently collects 1.18% of a property’s assessed value. To be precise on how much you’ll need to pay yearly for owning a home in San Francisco, consider contacting an expert real estate agent to ask your questions.

It’s also worth noting that whenever a house changes ownership – like a home sale – the property will receive a new assessment value, mostly based on the sale price. This reevaluation will be performed by the office of the Assessor-Recorder, meaning the previous tax of your property before buying it may not be the same with your new ownership.

2. Property Tax Payment Date

San Francisco charges property tax on the fiscal year, which begins on July 1st and ends on June 30th, resulting in tax years referred to as 2019/2020, 2020/2021. During this fiscal year, the city lets property owners pay their taxes in two equal installments.

The first installment occurs from July 1st through December 31st, and the second installment covers January 1st through June 30th. Nevertheless, the government issued tax bills to homeowners during the last week of October, and the payments are due on November 1st and February 1st.

*Note: Tax payments are considered to be delinquent on December 10th and April 10th.

3. Homeowners Exemption

If your recently purchased building functions as your primary place of residence, you may be eligible for an exemption. A Homeowner Exemption provides you with property tax savings by decreasing your property’s assessed value, meaning you pay less on taxes and invest the money somewhere else.

This impressive offer can reduce up to $7,000 off your San Francisco home, resulting in your $70 to $80 off your property tax. However, to qualify for this exemption, you must own – or co-own – a property and live there yearly. Therefore, rented, vacant, secondary homes or unoccupied properties don’t qualify for this offer.

To acquire a homeowner exemption, apply for a file with the San Francisco assessor and await their response.

4. Tax Increase

While a home owner’s exemption can help reduce the financial load, specific factors can raise the amount you pay. One example is converting places like the garage to a rent-worthy living space or renovating the kitchen to look more modern.

These factors raise your tax higher because they affect the assessed value of the house. So, ultimately, any action or inclusion that raises the value of your home automatically increases tax payments.

5. Destination of Property Taxes

Property taxes function as additional sources of income for the government, enabling them to fund schools, projects, hospitals, fix roads, improve transportation, build better hospitals, create parks, and better handle emergencies.

These factors are essential to the community as hospitals, schools, and better transportation aids the development of a balanced society, while parks, monuments, and other structures encourage tourism and the area’s visual appeal.

Ultimately, the tax goes to the government and is put back into the local area to improve the people’s lives. Paying taxes isn’t fun, but it does serve a purpose.

6. Paying Property Taxes

Fortunately, San Francisco possesses two ways individuals can fulfill their taxes: via the internet or traditional mailing methods. In the latter, the details are forwarded to the City and County Tax Collector, P.O. Box 7426, San Francisco, CA 94120-7426, according to Treasurer and Tax Collector.

On the other hand, you can pay your taxes online with your credit/debit card alongside your Assessor’s Identification Number (AIN) to search and retrieve payment information. This method is more convenient as the servers are open 24 hours a day and accept payment at any time.

7. Why San Francisco Property Tax Rates Change

Every year, the government and council decide on how much is needed to operate, keep the city balanced, and estimate how much revenue will come from other sources besides property taxes.

These sources could include grant funding and user fees. Eventually the amount is subtracted from the total money needed. The remainder is what the city will collect via property tax to keep the community balanced all year.

For example, if the state needs $2,000,000 to operate and expects to receive approximately $600,000 from other non-tax sources, the property tax required will equal $1,400,000. Afterward, the council decides that property owners should fund $800,000 of the $1,400,000; therefore, if the total resident assessment is valued at $100 million, the tax rate becomes $800,000÷$100 million equals 0.0014%.

8. Rectifying a Problematic Property Assessment Value

Before you can pay taxes, the value of your home needs to be assessed, but the final result may seem problematic if the value seems unfair or incorrect. Fortunately, if you have complaints regarding your property’s assessment value, you can contact the assessor.

Assessors are open to conversation, but even if, after the conversation, you’re still unsatisfied with the results, you can file a written complaint to the city’s assessment review board, as long as you file it within the defined complaint period.

This factor is crucial as a high assessment value on your property can significantly affect your taxes and your bank account in general.

Final Thoughts

Ultimately, taxes are essential to the community, especially one as popular and successful as San Francisco. They help the government balance the community investments.

It’s key to remember your tax rate is determined by the government and your home’s value, meaning the more expensive your property is, the higher your taxes.

If you wish to purchase a home in one of San Francisco’s best neighborhoods consider contacting the Mike Plotkowski Team of professional real estate agents to help you scan through the area and find the best long-term option.

Buying a House In The Bay Area? Here is What You Need to Know