The Bay Area is one of the hottest real estate markets in the country right now. With beautiful scenery, great lifestyle, potential for growth and fantastic opportunities for employment and education, it’s not hard to see why. This can make breaking into the Bay Area market a challenge for first time home buyers. Here are some guidelines which can help bring the prospect of a starter home in the Bay Area more within reach.

  1. Find A Great Mortgage Broker

With median house prices in the Bay Area over $1 million, you’re probably not going to be paying cash for your Bay Area starter home. You’re going to need to find a way to finance your purchase, and securing finance early in the home buying process is essential in red hot markets like the Bay Area. Finding a reliable and experienced mortgage broker to work with can help you get pre-approved for a loan, which gives you an edge when making an offer. One of the benefits of working with a mortgage broker over a bank is what you get access to a much wider range of loan options and rates, so you can find one that matches your needs.

  1. Decide What You Really Need (And What You Don’t) And Ensure That It’s Within Your Budget

Your starter home may not be your dream home, but it needs to fill your needs for the time you’ll live there. Make a list of what is essential, and negotiable in your home search, including number of bedrooms, bathrooms, quality of local schools, public transport, etc. Then develop a budget you can afford and stick to it. Find out how much you’ll need as a down payment and what you’ll need each month for mortgage, property taxes, insurance, homeowners’ association fees, and ensure you can afford it. A common guideline is that your home related costs should be less than 28% of your income before tax.

  1. Location, location, location! Timing, timing, timing!

While the median home price in the Bay Area is over $1 million, there are areas that are much less expensive where you can find a bargain. Working with a good real estate agent can help you find where you can get more for your money.

Another important factor to consider is that availability of starter homes. In the Bay Area inventory increases towards the end of the year [1]. As supply increases, prices drop or at least become more negotiable. This shows that timing is an important factor, and there are real advantages in buying real estate in the Bay area right now.

  1. Search Online, But Shop With A Trusted Real Estate Professional

Doing initial research online can help you gain market insight before you make an offer on real estate. However, when you’re ready, enlist the help of a professional buyer’s agent to help you navigate the path to the purchase of your home. First home buyers need to be prepared in a seller’s market. A low advertised purchase price may seem inviting, but be prepared for a bidding war which drives up the price.  A good real estate agent will help guide you through and around such traps.

  1. Know When To Make An Offer

Working with a good agent can also help you secure your starter home. An agent can help you find out how many disclosures were requested, which gives you a good idea of the level of interest in the property. You might also consider a ‘tenancy in common’ where several parties share an ownership interest – a structure common in the Bay Area. Ultimately, discussing these issues with a trusted real estate agent before you make an offer is the best option.

Remember that a starter home is just that – a place to start your journey of real estate ownership and build equity. Buying a house is one of the most important financial decisions most people will make in their lives. Put your financial situation in safe hands by working with a qualified mortgage broker to get the best financing option for your Bay Area starter home.