Archive for the ‘Home Buyer Tips’ Category
Posted by insidesfre on July 22, 2010
I’ve been using PocketListings.net since it recently launched. A “pocket listing” is one that isn’t posted in the Multiple Listing Service (MLS) and is thus considered to be off market. PocketListings.net is a database of these listings and buyer needs. Real estate agents subscribe to the site, and are able to inform their clients about new properties, as well as potentially sell their listings in a less traditional way.
The more agents who join PocketListings.net, the more opportunities will surface for their clients. I’ve been asked why sellers wouldn’t want to expose their properties to the most amount of people possible. For one thing, we’re in a different market now. Multiple offers do exist, but they aren’t happening as regularly, nor are list prices routinely selling for way over asking. PocketListings.net wouldn’t have been as sensible had it launched three years ago. But it absolutely makes sense now. Sellers can settle on realistic and reasonable prices with their Realtors’ guidance, and not necessarily have to deal with the inconvenience of open houses and nosy neighbors (a majority of whom aren’t qualified buyers to begin with).
If a property sits on the market for too long in the MLS, the “days on market” is a like a red flag for a lowball offer. If a seller can hook up with a buyer through the efforts of their respective, knowledgeable agents, things could go a lot more smoothly for everyone.
And buyers love, love, love knowing about off-market properties because they can have time to think straight, finalize preapprovals, review disclosures and not feel like they have a gun pointing at their head in the form of an offer deadline. The process can be extremely rewarding and significantly less stressful.
PocketListings.net will cost you, as a licensed agent, $4.95/mo. The database is growing as I type. Get on their and post your buyer needs and listings, and let’s do business!
Posted in Home Buyer Tips, Homeowner Tips | Tagged: pocket listings | Leave a Comment »
Posted by insidesfre on June 23, 2010
A quick update: You can still take advantage of the California tax credit. The $100M allocated for tax credits is still in play, as the Franchise Tax Board expects that some applications will be duplicates or invalid.
Bookmark this page for regular updates on the state credit.
The $8,000 federal tax credit is indeed kaput (though service members who were on official extended duty outside of the United States for at least 90 days between Jan.1, 2009 and May 1, 2010, may qualify for a one-year extension.) No word yet on whether the government will introduce a new credit.
Posted in Home Buyer Tips | Tagged: first-time home buyer, federal tax credit, franchise tax board, state tax credit | Leave a Comment »
Posted by insidesfre on May 25, 2010
I’ll cut to the chase: Sellers are catching price reduction fever these days in San Francisco. The chart below shows the price decrease activity for single-family homes and condos across all city zip codes over the past month.
So clearly we have some price corrections to deal with in all our neighborhoods. Of the 627 houses on the market, a whopping 498 of them have had some sort of status change in the MLS over the past month—mostly price reductions. And in some cases, I’m seeing substantial reductions. Over in the Richmond, for example, one 4BR home on 17th Avenue started out at $1,825,000 and is now down to a $1,595,000 list price. And its 3BR neighbor on 6th Avenue hit the market at $1,295,000 and is now listed at $900,000.
The condo market is more vulnerable; of the 779 units listed in the MLS, 653 of them have had status changes over the past month. There are also some dramatic reductions, and the condos have been on the market generally longer than the houses.
Price reductions are an important factor for buyers and sellers, and they can’t be ignored when it comes time to list your house or make an offer on one.
Posted in Home Buyer Tips, Homeowner Tips, Market Snapshots | Tagged: price reduction | Leave a Comment »
Posted by insidesfre on May 24, 2010
I’m often asked how different segments of the San Francisco market are doing, and inquiries about the TIC market are at the top of the list. We’re almost halfway through 2010 (I know), so I thought a market update on our tenancy-in-common activity was in order.
The bottom line: The TIC market is definitely hurting a bit, but it’s not in dire straits by any means. There are, however, two key factors that have contributed to the weakness in the TIC segment. The first is that the condo market has declined, so buyers who may have once only been able to afford a TIC are now looking at the possibility of a condo purchase. And second, if there are less qualified buyers in general these days, there are even less qualified buyers for TICs. The most common TIC loan type—the fractional, or individual loan—carries a high interest rate, has a 25%+ down payment requirement, significant cash reserve requirements, and is only available in adjustable-rate form.
There are 203 TIC interests on the market to date, and they’ve been sitting on the market for an average of 72 days, at an average list price of $646,467. And there are 82 TICs in contract (two are above $1M). A total of 117 TICs have sold since the beginning of the year at an average of $594,637. (So clearly there’s room to come down in price for the current average list price.)
A bulk of the TICs purchased since January sold for under their asking prices—something to consider when you’re making an offer on one. The most prominent example of this pattern was over at 2461 Post (at Baker), a 5BR/3BA TIC unit with two levels listed in May 2009 at $950,000. It sold this past March for for $777,000.
If you’re considering a TIC purchase because you think you’ll get more space or a better neighborhood for your money, you could be right. But consider all the angles, and know that if you’re buying a TIC interest with a fractional loan, it’s likely you’ll be selling a TIC interest with a fractional loan. That means your resale buyer pool will be limited to those who can meet those strict requirements. And the jury is out regarding which lenders will continue granting fractional loans by the time you’re ready to sell. Make sure you work with a very experienced, knowledgeable real estate agent, mortgage broker/lender, and title company. And have an attorney review key documents. It might cost you a few hundred dollars for a legal review, but you can’t imagine the headaches those few hundred dollars may save you in the long run.
Posted in Home Buyer Tips, Market Snapshots, TICs | Tagged: TICs, fractional loans | Leave a Comment »
Posted by insidesfre on May 5, 2010
Sales are a little off this year in what’s known as “District 4.” This is the area that encompasses neighborhoods such as Balboa Terrace, St. Francis Wood, Miraloma Park, Forest Hill Extension, Mount Davidson Manor and West Portal (as well as a few others). The areas predominantly fall into the 94127 zip code, so I put together a stat chart showing pricing trends for most of District 4:
The area has been on a bit of a downswing since the beginning of the year. Indeed, of the 52 single-family homes sold in District 4′s neighborhoods with 94127 zip codes, 27 sold for less than asking. There are currently 28 available listings with an average price of $1,381,217 and a days on market average of 66. But the 25 properties in contract have an average list price of $1,063,508. Looks like these current properties might have to move in price to attract buyers.
Buyers, District 4 may be the place to go if you’re looking for more house for your money—and some favorable negotiating.
Posted in Home Buyer Tips, Market Snapshots, Miraloma/West Portal | Tagged: 94127, district 4 | Leave a Comment »
Posted by insidesfre on May 4, 2010
When you sell a home in San Francisco—whether it’s a house, condo, TIC or multi-unit property—you’re required to ensure that the property meets energy and water conservation requirements. This usually entails an energy/water inspector evaluating the property and then addressing the items that need to be done in order to bring the place up to code. Energy requirements include things like weatherstripping, water heaters being strapped and braced properly, and insulation being installed in the proper places. And the water requirements encompass low-flow toilets/faucets and repairing leaks (among other things).
But now, some properties may be exempt from energy/water work. This just in from the San Francisco Association of Realtors:
“Residential live work occupancies (defined as an R-2/B-2 occupancy classification under the San Francisco Building Code) are exempt from Residential Energy and Water Conservation Requirements set forth in Chapters 12 and 12A of the San Francisco Housing Code, according to the Department of Building Inspection. Patrick Mckenzie, senior housing inspector, explains:
‘Section 1204 (i) and 12A04 (c), for purposes of the San Francisco Housing Code (SFHC), does not define a Live Work occupancy as a Residential Building that must comply with Energy and Water Conservation requirements. ‘It is the responsibility of the seller of a residential building to determine if the building is a live work occupancy that is exempt from energy and water conservation requirements. The authorized agent of the seller may help in this determination.
Since live work occupancies are not subject to the provisions of the San Francisco Housing Code, there is no requirement that an energy and/or water conservation inspection report be filed with the Department of Building Inspection, Housing Inspection Services.
To determine if a building is a live work occupancy, please review the existing authorized occupancy or use as stated on the 3R Report (Report of Residential Building Record). Section 351 (a) of the SFHC requires that prior to the consummation of sale or exchange of a residential building this 3R Report be delivered by the owner or their authorized agent to the buyer.’”
So there you have it. Sellers, if you own a live/work space, make sure you verify the property zoning on the building permit history. And buyers, do the same. Everyone should be on the same page about water/energy conservation requirements.
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Posted by insidesfre on April 28, 2010
There’s an addendum that frequently makes it into the purchase agreement in many transactions—the “As Is” addendum. I’m often asked by buyers what this actually represents.
The truth is, an “As Is” addendum means virtually nothing. It’s basically a warning from sellers that they aren’t going to be receptive to repairs or credits during escrow. Or, as an attorney during my company’s recent risk management seminar put it: An As Is addendum is when “sellers are putting the flag up and keeping their fingers crossed” that the buyer won’t try to negotiate anything.
Most buyers include an inspection contingency in their contracts, meaning they have a certain period of time to have professional inspectors evaluate the property. Even though a buyer may have been presented with and signed an As Is addendum, that doesn’t mean the buyer waives his or her right to either back out of the sale, or request repairs/credits. Whether the latter happens will be more a product of the inspection results, and how reasonable the sellers really are.
Posted in Home Buyer Tips, Homeowner Tips | Tagged: as is sale | 5 Comments »
Posted by insidesfre on April 21, 2010
I spoke with the San Francisco Chronicle’s Robert Selna yesterday about the foreclosure activity I’ve been seeing in the San Francisco market. The upshot of the story: Fewer homeowners in the Bay Area and California are headed down the path toward official foreclosure in the first three months of 2010 compared with the prior quarter and with a year ago.
As I maintained in the article, I’m not seeing a wave of foreclosures on tap in the city that will dramatically affect home prices. Of course, there will be foreclosure and short sales popping up, but compared with the overall number of homes that sell in a given year, the foreclosure numbers are fairly small.
Read the full Chronicle article here.
Posted in Home Buyer Tips, Homeowner Tips, Market Snapshots | Tagged: foreclosures, short sales | Leave a Comment »
Posted by insidesfre on April 21, 2010
One of the trends in condo living that I’m seeing is the rise in delinquent homeowners association (HOA) dues. This has become more of an issue over the past three years, as foreclosures and short sales result in HOA members stop paying dues.
The result of HOA delinquencies, unfortunately, is that the HOA financial reserves can become deficient and unable to keep up with operating costs or building repairs. This is particularly important in older buildings that, say, will need a new roof in the next year, or will require extensive elevator repairs. If the HOA reserves will barely cover the basic operating expenses outlined in the budget, it’s likely that residents will have to vote on and execute a special assessment for a large expense, thus increasing costs unexpectedly.
Additionally, HOA members sometimes end up deciding to cover another unit’s dues. Something like $450/mo split among 25 units doesn’t seem like much. But if it has to be done for several months—or for more than one unit—the bills can start adding up. Either way, delinquent HOA dues can potentially create out-of-pocket costs.
If you’re considering a condo purchase in a particular building, review the financials—budget and reserve amounts—as well as HOA meeting minutes. Those documents will give you a sense for whether the association is operating in the red, black or somewhere in between. The meeting minutes typically will give you insight into impending problems. And have your agent check out the property for foreclosure activity (preforeclosure and otherwise), which is information that’s been available for a while.
Posted in Home Buyer Tips | Tagged: delinquent dues, hoa dues | Leave a Comment »
Posted by insidesfre on April 13, 2010
It used to be that condo associations limited their pet restrictions to two pets per household. Then some buildings started throwing in weight restrictions. These days, it’s become commonplace for CC&Rs to ban certain dog breeds.
This is particularly true in new-construction buildings. Two of my clients are in contract at new developments 555 Bartlett and 233 Franklin (LindenHayes), and the CC&Rs for both buildings specifically state that Pit Bills, Presa Canarias, Rottweilers, Doberman Pinschers, Mastiffs or any other fighting breed cannot live in the building. 233 Franklin also restricts the weight limit for dogs to 100 pounds combined per unit.
With older condo developments, you’re probably good to go if you own one of the aforementioned breeds, unless there is a weight restriction or the particular HOA has amended its CC&Rs to ban the breeds. So before you write your offer on that nice 2BR condo in Pacific Heights, check to see if you’ll be able to bring your dog along.
Posted in Home Buyer Tips | Tagged: banned breeds, cc&rs | Leave a Comment »
