Home Buying Guide
The Buying Process
This graphic illustrates a typical example of the home-buying process from start to finish.
YOUR HOME
FINDING
• Understand objectives, priorities, & time frames
• Discuss buying process & new representation and showing forms
• Examine local market conditions
• Define agency relationship
• Obtain loan pre-approval letter from lenders
• Determine budget based on income, assets, and personal financial plan Initial Consultation & Loan Pre-Approval
• Tour properties that meet your home search criteria
• Monitor market activity with listing alert service
• Sign a Buyer Representation Agreement Home Shopping
• Leverage Skybox network for upcoming listings
• Identify off-market, for sale by owner, and expired listings matching requirements
• Review comparables & discuss offer strategies
• Discuss Buyer’s Agent Compensation
• Review & sign all available disclosures and reports
• Negotiate the best possible price for your new home Make An Offer
• Prepare offer package including bank statements, introductory letter, and loan preapproval
Escrow / Lender Setup
Inspections
• Choose & pay for escrow
• Order preliminary title report from title company
• Deposit funds into escrow account
• Submit purchase contract to lender for processing
• Schedule appraisal (by lender)
• Confirm contingency removal & condition dates
• Conduct buyer inspections (property, pest, chimney, roof, etc)
• Second review of disclosures & HOA docs
• If new critical issues are discovered during buyer inspections, negotiate repairs or renegotiate price
• Underwriting file review
• Appraisal completed and reviewed by lender
• Final financing approval by lender
• Select home insurance company & coverage
• Submit insurance information to escrow
• After property inspections and confirmation of loan document approval, remove contingencies
• Confirm property condition and completed repairs, if any
• Property condition should be consistent with condition on date of ratification
• Set up utilities: electricity, water, garbage, phone, internet, alarm, etc
• Contact HOA office to schedule move-in (if applicable)
• Schedule move
CLOSING
• Review all closing and transaction costs
• Sign loan documemts
• Provide cashier’s check or send wire for down payment and closing costs
• Lender sends balance of funding to title company one business day prior to close
• Deed is recorded in person at county recorder’s office by title company representative
• Obtain keys to your new home!
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
• Change all locks on all doors and update security system (if available)
• Complete any planned repairs or improvements
• Get acquainted with your new neighborhood and community
• Update estate plan and trust
• Review all appliance and warranty materials
• Schedule future required maintenance (reseal counters, change/clean filters, etc)
• File home warranty plan
• Note upcoming property tax payments and supplemental property tax bill
• Attend HOA meetings and meet your neighbors
• Unpack, unwind, and enjoy your new home!
Buyer Representation
After the historic NAR settlement in 2024, effective August 17, 2024, all Buyer’s Agents will need to have signed Buyer Representation Agreements or Property Showing & Representation Agreements in place to show property to Buyers or to write offers on behalf of Buyers.
WHAT IS A BUYER REPRESENTATION AGREEMENT?
The buyer representation agreement defines the scope of work your agent is going to provide including the contract duration, services, and compensation. This means you will know the services and costs upfront with the agent you’ve chosen to represent you.
DO I HAVE TO SIGN AN AGREEMENT TO GO TO AN OPEN HOUSE?
No, you can still go freely to open houses on your own as a Buyer. The agent present is acting on behalf of the Seller and has no obligation to you. If you engage the agent to show you other properties, you will need to sign one of the Buyer Representation Agreements. If you go to an open house with your own agent, you will need to have an Agreement signed with them.
DO I HAVE TO SIGN AN EXCLUSIVE DOCUMENT TO SEE HOMES?
No, there are two forms in rotation in California. The Property Showing & Representation Agreement is a non-exclusive agreement that allows an agent to show you up to three homes per document. Once you are ready to write an offer, however, an exclusive Buyer Representation & Broker Compensation Agreement must be signed.
AS A BUYER, WILL I HAVE TO PAY MY AGENT OUT OF POCKET?
Not necessarily. There will be a variety of options available to you. For example, many buyers will ask the seller to credit them at close of escrow to pay their buyer broker fees while others will ask the sellers to pay their buyer broker fees directly.
Loan Pre-Approval
For buyers financing their home, planning is crucial. Several factors should be considered to ensure the loan process goes smoothly.
DETERMINING THE RIGHT PRICE RANGE
The first step in buying a house is to determine the price range that is right for you. You will need to consider how much you are prepared to invest in your home and how much you will need to borrow. You should also consider how much property taxes and insurance will add to your monthly mortgage payment.
DETERMINING CASH YOU WILL NEED
You will need enough cash to cover both your down payment and closing costs associated with the purchase. Closing costs vary significantly based on the terms of your loan but are generally 1% to 2% of the purchase price. Also, keep in mind any immediate postclosing costs, such as moving, cleaning, repairs, etc.
DETERMINING ADDITIONAL COSTS
Your Skybox agent will help estimate your purchasing power and your carrying costs, but it is highly recommended that you discuss your cash needs and tax ramifications with an accountant and/or financial advisor.
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
PRE-APPROVAL FOR A LOAN
An offer is given greater consideration by a seller if it is accompanied by a preapproval letter from a reputable lender or local mortgage broker. This assures the seller that you will be able to obtain the proposed financing and will not tie up the property needlessly.
Lenders will inquire about the following six critical actors:
1. Income
2. Savings / Capital / Investments
3. Credit History
4. Debt Level Ratio
5. Employment History
6. The value of the property you wish to purchase
RECOMMENDED LENDERS
Skybox Realty can recommend several reputable lending institutions from which you may obtain pre-approved financing. In some cases due to litigation or other factors, only some banks will lend on certain buildings.
Contact an agent for their specific recommendations.
Finding The Right Home
We strive to find a home that is a perfect match for your goals, priorities, and needs. In the initial buyer meeting your agent will work with you to begin the search for a property that suits your particular lifestyle and needs.
QUESTIONS TO CONSIDER
Create a wish list then prioritize. Start big then whittle down to the most important elements. You may have to make some trade-offs between the various items on your wish list.
When would you like to move?
How long have you been looking?
What do you like most about your current home?
What do you like least about your current home?
What neighborhoods do you like?
What style of property would you like? (Modern condo, Victorian, Marina style, contemporary, etc)
Are you looking for turnkey or can you take on some renovations?
Is your home currently on the market? For how long? What is the asking price?
Do you need to be near public transportation or highways?
Do you prefer to be near amenities?
Would you like to live in an amenity rich building with an HOA?
Are you the sole buyer or do you have partners?
What features are you looking for?
What is the minimum number of bedrooms? Of bathrooms?
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
Multiple Units Bedrooms (#) Baths (#)
Square Footage Dining Room
Play Area
Weather
Eat-In Kitchen
Garden / Yard Parking
Transportation Shopping
Washer / Dryer Neighborhood Other Items
The House Hunt
Your agent will help you begin your search by narrowing down your preferences. Within these parameters, your agent will work with you to find your perfect home among the many sources available to us: the mls, off-market properties, new construction and more.
PROPERTIES ON THE MARKET
Whenever possible, your agent will preview properties before showing you to ensure they meet your criteria. Keep yourself available to act on short notice when desirable or well-priced properties become available, as the San Francisco Real Estate market moves quickly.
OPEN HOUSES / BROKER TOURS
Open Houses are a good way to see properties in a designated time frame. Notably, Mission Bay doesn’t allow open houses, so working with an agent in this neighborhood is essential. Each week, new property listings are open to agents and brokers for viewing. If there is a new listing that is appropriate, your agent will arrange for a showing at your earliest convenience.
HOW TO VIEW A PROPERTY
During each viewing, compare the property to your requirements. Your agent will help by giving grades to the different features. For shortcomings, consider if they can be altered to make it acceptable. Some features are of course impossible to change like location and view.
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
QUESTIONS TO ASK
When you see a property that meets most of your criteria and is a likely prospect for further consideration, ask additional questions.
1. Are There Any Recent Inspection Reports? The Seller may have a recent pest control or General Contractor’s Inspection report available for review.
2. What Is The Condition Of The Plumbing, Heating, Electrical System, & Roof? If these systems are old, the cost to repair or replace should be considered and included in the terms and conditions of your offer.
3. Are There Any Signs of Dampness or Drainage Issues? Have There Been Past Water Intrusions (in a condo)? These conditions can be difficult and expensive to correct.
4. Were There Improvements Made And Were They Done With Permits? Many properties have had improvements or additions completed without permits and may not comply with building and zoning codes. Your agent can arrange to obtain a full disclosure package from the listing agent, which should include details on property improvements.
5. Is There An HOA? What Do the Dues Cover? All condos, whether they have 500 units or 3 will have some kind of Home Owners Association. Find out what is included in the monthly dues (utilities, insurance, maintenance etc) and what the reserves are.
New Construction
When shopping for a home, particularly in the Bay Area, new construction is always an option for those more interested in a modern look, high-end appliances, or in house amenities like gyms, pools, etc (amenities only in condos).
QUESTIONS TO ASK
Buying new construction comes with different parameters. Consider the following questions when buying new construction to see if the restrictions, fees, etc are right for you.
Who is the developer? What other buildings or homes have they built?
When is the delivery date? Has the developer been late before?
How much is the deposit to hold the unit?
What is the policy to back out of purchasing before delivery?
Are there resale or rental restrictions during a specified initial time period?
Is parking included or extra? Is it self parking or valet?
Is storage included or extra?
What do the monthly HOA fees cover (if applicable)?
Is water included in your condo fees (if applicable)?
What does your insurance need to cover and what does the HOA cover?
Does the home come with appliances included?
Does the listed price include all taxes?
Are there additional special assessments or fees?
What available upgrades are there? How much do they cost?
What will the amenities be? Will there be a doorman?
What will the view be like? What will the view be like in 10 years?
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
BENEFITS OF NEW CONSTRUCTION
• Freedom to choose floor plan, square footage, finishes, etc.
• Small deposit amount / no HOA fees during construction period
• Can be a less competitive market
• Home won’t start aging for 8-10 years
• Limited downside risk
WHAT TO EXPECT WHEN PURCHASHING NEW CONSTRUCTION
• Unless you are entering late in the selling period for the project, expect to visit a sales office with a model unit, renderings, floor plans, etc. to help you visualize what the home will look like at completion
• There will often be various “releases,” with the developer only releasing certain units at certain times
• There will basic finishes and design choices made by the developer, but you will most often have the opportunity to select certain upgrades like hardwood flooring, custom closets, shower enclosures, etc.
• Typically there is a 30 day finance contingency after signing a contract and about 5 days to review disclosures and HOA documents
• Expect a long time between signing the contract and seeing your new home unless you are buying in an almost complete building
Making The Offer
Your Skybox agent will help you draft a viable offer, taking into account market conditions, fair market value, compensation to agent, and anything pertinent to the particular property.
WRITING AN OFFER
Several factors should be considered in your offer:
1. Purchase Price: Having viewed other comparable properties, you will have a good idea of the value of your prospective home. Your agent can provide recent comps to guide to the the “right price.”
2. Loan Contingency: If you are obtaining a loan to finance the purchase of your home, your agent will structure the contract to allow reasonable time to obtain a loan from a lender of your choice. It often takes a few weeks to obtain a loan commitment so a typical escrow of 30-35 days is normal.
3. Inspections: Most offers are made contingent upon obtaining and approving inspection reports on the property by licensed professionals. This is to inform and protect the buyer about known and unknown conditions. We generally recommend pest and general contractor/home inspections, although these are less relevant in new condo constructions.
4. Personal Property To Be Included: It is important to clearly identify all personal property that will be included in the sale.
5. Compensation: Identify who will be paying Buyer’s Agent commission and document accordingly.
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
FINANCIAL & EMOTIONAL CONSIDERATIONS
Once you have identified the property that meets yor criteria and want to make an offer, there are financial, psychological, and emotional considerations to structuring your offer. If there are multiple offers and the seller counters at a higher price, what is your top dollar? Does the property need improvements? How motivated is the seller? How motivated are you? Etc.
PRESENTING & NEGOTIATING YOUR OFFER
Your Skybox agent will represent you to the seller and the seller’s agent in the best possible light to obtain an accepted offer. When presenting your offer, documents such as preapprovals, financial statements, and personal notes are often appropriate.
SUBMITTING YOUR DEPOSIT
A good faith deposit must accompany your offer. It is customary for your initial deposit to be 3% of the purchase price. This can either be a personal check made payable to the title company of your choice or a wire.
Life Of An Escrow
Once an offer is accepted and ratified, the escrow process begins. Working closely with your agent and lender will ensure a smooth and successful transaction.
Broker / Client Opens Escrow
Order Preliminary Title Report
Order Demands at Client’s Request
Receive & Review Preliminary Report
Receive Demands and Review then Notify Client
Forward Bills to Escrow at Direction of Client
Order Statements of Identity on Buyers & Sellers and Clear General Index Matters
Receive Loan Documents from Lender Prepare
and Pertinent Documents
Order Beneficiary Statement
Receive Beneficiary Statement, Review Terms of Transfer, Notify Client
Closing Costs
Closing costs are the various fees paid through escrow charged by the lender, the title company, real estate agents, and other providers. Which party pays what can be negotiable between the buyer and seller. Each county is different. For San Francisco:
THE BUYER TYPICALLY PAYS
• Real Estate Commission - Buyer’s Agent (Negotiable)
• Title Insurance Premium for Lender & Buyer
• Escrow Fee
• Notary Fee
• Contractor’s & Pest Inspection Fee / Any Other Inspection Fee
• All New Loan Charges (points, appraisal, document processing)
• Interest on New Loan from date of funding to 30 days prior to the first payment date
• Home Warranty
• Homeowner’s Insurance for first year
• Property Tax Proration
• Earthquake Insurance
• Private Mortgage Insurance if required by lender
• Property Tax Impound Account, if required by lender
• Move-in Fee (for condos)
• HOA account transfer fee
• Condo/HOA Pro-Rata
• Misc Charges
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
THE SELLER TYPICALLY PAYS
• Real Estate Commission - Seller’s Agent
• Real Estate Commission - Buyer’s Agent (Negotiable)
• Document Preparation for Deed
• Documentary Transfer Tax
• Payoff of All Loans against property
• Interest Accrued on loans being paid off, reconveyance fees, and repayment penalties
• Any Judgment or Tax Liens against Seller
• Property Tax Proration
• Unpaid Homeowner’s Dues (for condos)
• Bonds or Assessments
• Delinquent Taxes
• Move-out Fees (for condos)
• Notary Fees and Recording Fees
• Third Party Natural Hazard Disclosure Statement and California Tax Disclosure Report
• Pre-sale Inspection Fees
• Underground Storage Tank Report
• Energy/Water Conservation Inspection/Repairs
Move-In Checklist
Moving can be a stressful time, we recommend that you prepare for your move as soon as possible. Below is a checklist of recommended steps to ensure that your move-in goes as smoothly as possible.
ADDRESS CHANGE NOTIFICATION
• Post Office Forwarding Address
• Subscriptions
• Friends & Relatives
• Bank & Other FInancial Institutions
• Plan for special care needs of infants or pets Before You Leave
INSURANCE, SERVICES & RECORDS
• Notify Insurance of new address for coverage
• Gas, electric, water, phone, cable, garbage, Internet, newspaper, etc.
• Ask Doctors for referrals / transfer prescriptions, eyeglasses, etc.
• Obtain Birth Records, Medical Records, etc.
MOVING COMPANY
• Make arrangements with a moving company
• Clean rugs or clothing before moving / have them moving wrapped
• Check Insurance coverage, labor cost for packing / unpacking, method and time of expected payment
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com
On Moving Day
THINGS TO REMEMBER
• Carry jewelry & documents on your person
• Double check closets, drawers, and shelves for items left behind
• Plan for transporting pets
• Coordinate leaving old keys with new owner / realtor
• Carry cash for unexpected costs during the day
After The Move
AT YOUR NEW ADDRESS
• Check if service is switched on for telephone, Internet, cable, gas, electricity, water, garbage, etc.
• Check pilot light on stove, hot water heater, and furnace
• Check if appliances are working
• Notify DMV of new address update for your driver’s license
• Visit city offices and re-register to vote
• Register car within five days after arrival in state to avoid penalty (only for those moving from another state or country)
• Apply for a driver’s license in your new state (if applicable)
• Register children in school
• Arrange for medical services: doctor, dentist, vet, etc.
Paul Hwang
Paul is the #1 Ranked Agent in the South Beach area for 14 years running. Other brokers and potential buyers call Paul daily with new inventory, giving him a unique advantage in a competitive market.
TESTIMONIALS
“I have sold many homes in my life and Paul Hwang is the best I’ve ever dealt with . His advice and responsiveness are unsurpassed. He went above and beyond in every way and his staff did the same creating great marketing brochures to help with my sale - even the sale of my furnishings. I would recommend Paul and his team without reservation.”Becky
“ Paul doesn’t just know the market for high end condos in SF, he is the market. ” - Isaac
“Paul is indisputably the most experienced broker (sell or buy-side) at The Infinity in San Francisco. And a very good, ballsy price-setter and negotiator. At the end of the day, a broker/salesperson is easy to ratedo they get the deal done on good terms - and so it’s easy to give Paul top marks everywhere. ”
- Steve
Paul Hwang | 415.216.8746 | dre 01371169 | paul@skyboxrealty.com | www.paulhwang.com Paul Hwang
“ Paul is hands-down the best broker in SoMA / South Beach. ” - Peter
