Making an Offer on Real Estate in San Francisco

23 Jan Making an Offer on Real Estate in San Francisco

First of all, realize that it’s common in today’s market for buyers to make 3 or 4 or more offers on different homes before they get one accepted. In many ways, it’s just part of your education learning how the current market works.

Find a great buyer’s agent to start helping you as soon in the process as possible—ask for referrals from people you know, interview multiple agents, take the time to find a really competent, trustworthy one, who seems a good match for you. There are so many ways a good agent can help you learn the market, understand the process, alert you to opportunities and generally save you time, effort and money—you might as well take advantage of those services to the maximum sooner than later. Though there is much information now available online, it is only a small percentage of what an experienced, local agent can provide you.

Make a list of those things that are most important to you in a new home. Categorize them from “must have” to “like to have if possible.” As your search process proceeds, revise this list as necessary as you learn more about your options.

Generally speaking, it does not make sense to use the listing agent to represent you in the purchase of your new home as compared to having your own agent, solely dedicated to your interests.

Get loan pre-approved. This is vital for two reasons: 1) that you understand your financial options and parameters, and 2) that you have the lender pre-approval letter in hand when you make your offer. Do NOT use any but a well-regarded, LOCAL loan agent and lender, experienced in purchase transactions (as opposed to refinance transactions).

Have your agent review the purchase contract with you, if possible ahead of actually writing your offer: the terms and timelines of the contract, the conditions and contingencies of purchase—such as inspections, financing, review of documents—you may wish to include, personal property that may be included in the sale, typical closing costs and so on.

Review the “General Information for Buyers and Sellers of Real Property in San Francisco” outline published by the SF Association of Realtors.

See as much property as possible and have your agent provide you with detailed information on recent comparable sales in the area you’re considering. Nothing will give you a better sense of market conditions and market values.

Once you identify the home you wish to purchase:

Find out how long the property has been on the market.

Spend as much time as possible, ideally in multiple visits at different times of day, seeing the property and its surrounding neighborhood. Sometimes, in a hot, fast moving market, these opportunities are limited. If there are any other decision-makers or people whose opinion you consider vital, get them in to see the home too.

If you have the opportunity to make a positive impression by introducing yourself to the listing agent, do so. You want to come across as knowledgeable, financially qualified, reasonable and straight-forward. This can impact how your offer is considered.

Make a list of the strengths and weaknesses of the property, and compare them to your list of needs and wants. It’s easy in the excitement of seeing a house you like to overlook important fundamentals, so consciously consider these issues prior to making an offer.

Have your agent request the buyer disclosure package, if one is available prior to offers being made. Review this carefully: there will often be information affecting either your desire to purchase or your decision regarding how much you are willing to pay. If questions arise during this review, have them addressed by the listing agent.

Have your agent perform a comparative market analysis on the home, so that you have the most up to date information possible regarding competitive properties, properties that are currently under contract, and recent sales. Have your agent look up tax information on the property and pull any historical information available in MLS. This information will help you decide on an offer price.

Make sure you have the monies available to make a prompt deposit into escrow if your offer is accepted.

If you are concerned about local crime or sexual predators, consult the police department website, call the local police station and visit the online Megan’s Law database.

The more information you have—about the property, the Seller and the Listing Agent—the better your chance to write a winning offer while also achieving the best possible price and terms, so these are questions to have your agent ask the listing agent (as appropriate):


  • Do you have any offers being considered right now? What can you tell me about them?
  • Any idea of how many offers you expect to receive? How many disclosure packages have you given out?
  • Do you have a set time and day for delivery or presentation of offers?
  • Have you had any offers that didn’t work out? Can you give me any clues as to why they didn’t work out?
  • If it fell out of escrow, can you give me any clue as to what caused that to occur?
  • Is there anything about the property that’s not readily apparent, not in MLS or the property flyer that my client should know prior to writing an offer?
  • Is the Seller willing to negotiate? Do you think there’s any room in the price?
  • What can you tell me about the Seller’s circumstances?
  • How long has the Seller owned the property? Why is he or she selling? Does the Seller need to have the sale closed by a certain date?
  • Does the Seller have a preference for the Close of Escrow date?
  • Besides price, does the Seller have any special preferences or requirements?
  • Does the Seller wish or need to occupy the property after close of escrow?
  • What personal property is included in the sale? Any excluded fixtures?
  • How long will the Seller need to respond to my client’s offer?Review with your agent all the information gathered and discuss offer options and negotiating strategies. Every strategy has risks and rewards and it’s vital to consider these before you move forward. Consciously think about how badly you want to buy this home, and at what price it no longer makes sense for you. Review the offer process: offer/ acceptance, rejection, exclusive counter-offer or multiple counter-offer/ and so forth until the contract is agreed to and accepted, or it’s clear the deal won’t work.

    Remember: you are the sole decision-maker regarding the price you wish to offer and to ultimately pay. Do not be bullied by anyone.

    Get an updated loan pre-approval letter from your loan agent tailored to your offer price. This will be included with the offer.

    If it’s possible to have your agent present your offer in person to the seller, or at least directly to the listing agent, this is usually an advantage.

    Until an offer is accepted, the property is in play: other offers may be received; you may change your offer; you may revoke your offer. In California, all agreements regarding the sale of real property must be in writing; verbal representations in the course of negotiations are not binding.

    There’s a saying in negotiations: The party most desperate to make the deal loses. So it’s best not to be desperate, or if you are desperate, to disguise that fact.

    If your offer does not work out, try to take it in stride. If your offer can be put into “back-up offer position”, that is typically a no-lose proposition. Be patient: There are new listings coming on the market every day and there’s no reason why one of them won’t turn out to be an excellent new home for you. When an offer doesn’t work out, it always makes sense to review what happened with your agent and regroup and re-strategize as necessary. Track the listing to find out its ultimate sales price.

    Depending on the circumstances, you may wish to consider adjusting your home-search parameters, purchase price parameters and/or those neighborhoods you’re willing to consider.