Advice for First-Time Home Buyers in San Francisco
Many would define the American dream as home ownership. But how do people decide what kind of home to buy, where, and for what price? Especially today, in a housing market that is far from stable in many parts of the country, it’s hard to give definitive advice about buying a home. As a San Francisco real estate law expert, however, James S. Mori can offer intriguing advice from the inside of the real estate world.
Mori urges new home buyers not only to go with their gut, but to make purchasing decisions based on a number of exterior factors; new homeowners ought to be knowledgeable about the history of the house’s worth and projected direction of that worth as well as the immediate neighborhood’s projected home values going forward. The last thing you’d want to happen is for home values to slip as they have for so many over the past four years or so. Recovery of the real estate market in many states is moving at a snail’s pace, says Mori, and new home buyers need to be especially attentive to the recent history of the areas where they want to buy.
If there’s one piece of advice that stems from real estate law in San Francisco that Mori holds to be most important is not to incur too much debt. Arguably, this is what contributed to the high volume of foreclosures over the past four years—home buyers taking on more debt than they could manage. Those with high medical bills and expenses, consumer credit card debt, and business or education loans should think twice before signing any mortgage, says Mori. San Francisco real estate law experience dictates that a home buyer should only sign on to a mortgage they are sure they can budget for. There’s no use in owning a house that’s beyond your means if you’ll end up defaulting on your mortgage payments.
Banks have begun implementing more responsible lending practices than in the years before 2008. For example, before a home buyer signs a mortgage, banks want proof that the down-payment will not exhaust the purchaser’s savings. If this is the case, it’s also likely that they won’t be able to make their mortgage payments one day, since they’ll have no “nest egg” of savings to fall back on. In other words, as opposed to the San Francisco real estate law situation before 2008, banks have made it much more competitive to get a good home loan. Ultimately, says Mori, this could be a good thing.
Mori has these words of advice for navigating the San Francisco real estate law environment: Make sure you can afford the loan. If you have to overextend yourself to pay the loan premiums, then maybe you shouldn’t have taken that loan—or shouldn’t take that loan if you foresee not being able to pay the premiums. Try to foster a realistic viewpoint of your home-buying capacity in view of your actual income. And, of course, save money, and don’t spend it on too many luxuries. By following this advice, says Mori, it’s possible that one day you could be a homeowner yourself.
San Francisco, CA 94114
*Disclaimer: This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.