Archive for the 'Home Buying' Category

Tom Sinkovitz, Former KRON-TV Anchor, Talks San Francisco Real Estate

 

Check out these informative videos about San Francisco consumer real estate issues! Topics include:

Why It Makes Sense to Use a REALTOR®

Where Is the Market Headed?

Renting? It Might Make More Sense to Own

Shared Equity Mortgages, An Alternative for Some

What to Do If You Have a Problem Mortgage

Watch the Videos HERE.

 

 

September 2007 San Francisco Real Estate Trends

 

San Francisco’s real estate market is…? What is going on anyway? In casual polling of fellow agents, I hear words like, “random,” “spotty,” “hard to predict,” “complex,” and so on.

At our Zephyr Real Estate  office meeting, agents will announce their sales (address, list price, #offers, and a ball park estimate of sales price). These meetings are a phenomenal way to stay in touch with the broader market trends. Lately, the results seem to confirm these confusing adjectives!

Some houses received many offers in 2 weeks and sell for $50–$150k over the asking price while others get one offer weeks or months into the listing. Typically, these sales are at or slightly under the listing price.

What I find fascinating is that sales are down BUT prices are UP from last year!

Note to home sellers: if you’ve lived in your property at least 3 years, not to worry! If not, it depends on your particular place. Some of you are best off staying put for another few months at least while others could get a tidy profit even now.

Note to home buyers: Buy, buy, buy. Much of SF is on sale for the short-term. Get in and take advantage before the market picks up early next year.

Check our Cleanoffer.com’s Real Estate Market Trends Report. An excerpt is below and click HERE for the down loadable PDF.

Happy analyzing and Trick or Treat!

Credit Crunch Crunches Sales

Trends at a Glance
(Single-family Homes)
	Sep 07	Aug 07	Sep 06
Home Sales:	152	199	218
Median Price:	$882,500	$925,000	$828,000
Average Price:	$1,041,775	$1,151,952	$1,034,913
Sale/List Price Ratio:	103.0%	106.1%	101.3%
Days on Market:	37	36	41

As expected, the credit crunch had a big impact on sales in September. Sales of single-family, re-sale homes fell 23.6% from the month before, and were off 30.3% year-over-year. Year-to-date, home sales are off 9.3%. We expect sales to be slow this month, then start to recover at the end of the quarter as the credit crunch is alleviated.

The median price for single-family, re-sale homes dropped 4.6%, a year-over-year gain of 6.6%. The average price fell 9.6%, up 0.7% compared to last September.

The median price for condos in San Francisco fell 4.3% to $785,000 from August, up 1.3% compared to last September. The average price for condos lost 3.6% to $816,513, month-over-month. The average price was up 8.6% year-over-year.

San Francisco condo sales fell 26.8% in September, down 10.6% year-over-year. Year-to-date, condo sales are down 0.8%.

Zephyr Hosts a Free Seminar for Clients with Real Estate Attorney! Get your questions answered.

6 Ways to Beat the Stress of San Francisco Home Buying Part 2: Be Flexible and Realistic

Be Flexible and Realistic.

Use conservative monetary calculations. Make sure you have a little extra money to work with, just in case. In the San Francisco home buying market, anything can happen between contract acceptance and closing. It could be the inspections reveal areas of concern that the seller in unwilling to fix (and that you are okay taking on) or repair costs are higher than the amount negotiated in the contract.

OR, the interest rate changes before you have locked in your rate, affecting the necessary down payment and closing costs. Your real estate consultation (myself or someone else), will strive to tie up loose ends as quickly as possible, but remember that nothing is perfect.

Most buyers feel a bit overwhelmed when taking on a mortgage and the responsibilities of a new home. I’ve seen many buyers get angry when it seems like the cost just keeps going up.

(Of course, if you are too financially conservative, you won’t be able to become a San Francisco homeowner. Be smart but be realistic. If you are waiting for 20% down, a year’s worth of income reserves, and the ability to afford a 30–year, fully-amortized loan, you may be waiting forever! Not to mention, that this is not the best long-term wealth-building approach but that’s another story! For now, just think about having great credit, 5–10% down payment, and at least 3 months of savings in reserve.)

Anger is caused when reality doesn’t match expectation. If you anticipate potential pitfalls and extra costs in advance and keep your expectations in check, you won’t need to get angry. You will hope for the best, prepare for the worst. In fact, the process will likely go more smoothly than you expected.

You’ll notice how I over-estimate the potential problems for just this reason. Your transaction may be seamless, but just in case, you’ll be ready to tackle any issues that arise!

(The same holds true for escrow time lines. Please, for your own sake, do not schedule the movers for the day of close or even the next day! Put wiggle room in your calendar for unforeseen events. There are many, many people involved in your home purchase who can potentially cause a delay. It’s not the end of the world when you’ve planned for a delay. It can feel like it when you’ve lost an unrefundable moving deposit!)

How Foreclosure Can Happen in San Francisco

Want to hear a NIGHTMARE from the field? Here’s an example of what can happen to you without the right representation…

Joe* was renting a fancy South of Market Loft back in 2004. One day, he came home to find a letter from his landlord saying that he was going to sell the loft and Joe had to move. Since most lofts are not under San Francisco rent control, it was true that he would have to move. Joe not only lived in his loft but also conducted his business out of it. The letter also said they landlord would be willing to sell the loft to Joe….

Why not? He knew the San Francisco real estate market was in the midst of a boom and all of his neighbors were selling their lofts for a great profit. Being self-employed, Joe did not have verifiable income or many assets. His credit was great so he was able to secure 100% financing NINA loan (No Income, No Asset). So what, if the loan had much higher interest rates that were only fixed for 3 years…the market was booming and his loft will appreciate.

And so, Joe bought his place. What’s the problem, you ask? It’s now 2007, and Joe’s interest rates are about to adjust. He can no longer qualify for a refinance because lending guidelines are stricter. Still without verifiable income or assets, Joe is stuck with his current loan. His current loan was already about 2% HIGHER than the typical loans and is about to jump up, A LOT. He can no longer afford to make the payments.

Okay, so he can sell the loft, right? Well, not so fast. Joe and his landlord conducted the sale privately, without benefit of Realtor representation or a sale on the public market. You guessed it! He paid WAY too much for his loft back in 2004. Instead of allowing a real estate professional to analyze the price for the listing and then letting the public make the final decision, Joe’s landlord set the price. Naturally, he inflated the price to his benefit.

2004 was the peak of this current market cycle. 2007 is at or near the bottom. Joe’s loft has not appreciated past the inflated price he paid. It was not worth what he paid then and it is not now. Joe cannot sell for a profit. In fact, he cannot sell for a break-even. This will be a loss and potentially, a big one.

The moral of the story: Capitalism works publicly for a reason. Buyers decide the value of a commodity, whether a stock or a house. By enlisting a trusted advisor and purchasing a publicly marketed home, you protect yourself. Allow the market to determine the value of your home, not the owner.

Of course, markets go up and down so it’s certainly possible to have your home’s value go down even if you paid the right price when you purchased. But just imagine how much worse it can be if you had paid even more than your home’s worth at the peak of the market…

*Names & details have been changed to protect the innocent.

6 Ways to Beat the Stress of San Francisco Home Buying Part 1: Begin with the End in Mind

Begin with the end in mind. Have an Ultimate Scenario of where you are headed. What will life be like when you get there? How will it be better than where you are now? What is your ideal new living situation? What do you really, really, truly want?

Focus on that picture and write it out, filling at least a page about how it feels to be living in your home. This is imperative.

Having your goal in front of you at all times energizes you to achieve it, in spite of setbacks and frustrations. Emotions will run high and you need an anchor. This written statement will act as your anchor when anxiety threatens to get the better of you.

Buying a home in San Francisco is no easy feat. Be informed, be prepared, and know what you want. Don’t get sidetracked or let our human nature to procrastinate block you. We tend to get in our own ways. We state a goal and then do everything we can to NOT reach it.

 

 

 

Keep your dream in front of you and you will be home soon. We promise!

6 Ways to Beat the Stress of San Francisco Home Buying: An Introduction

We want to work as a team to achieve the most successful results AND provide the most rewarding experience for you.

Two very different types of needs arise when people are moving. First, there are the transactional needs, like finding the home that is just right, finding a seller who is realistic, being able to negotiate the lowest price, filling out all of the paperwork, handling the escrow, and arranging for the move.

The second set of needs are the emotional ones. Often, these emotional needs are more stressful than the transactional details! Any competent real estate agent will handle the transactional details, but if your emotional needs are unmet, you’ll be frustrated and may not act in your own best interest.

The ideal real estate agent is one who is competent with paperwork & numbers but can also guide, direct, and counsel you through the emotional ups and downs of moving.

In upcoming posts, I’ll share the 6 best ways to beat the stress.

5 Powerful Homebuying Strategies for San Francisco Homes, Lofts, Condos, & TICs: Part 5

Find a Real Estate Consultant (a.k.a. Realtor)

It is most essential for your safety and success to hire your own Realtor representation. Whether you are interested in my services or not, I encourage you to interview and choose a consultant you feel comfortable with and enlist that agent as your “Buyer’s Agent”. When you work exclusively with a Buyer’s Agent, you become a client with all of the rights, benefits, and privileges created by this agency relationship.

You are no longer just a shopper. You are an appreciated client. When an agent hears of a great buy, who are they going to call? Her client with whom she has an established, trusting relationship or a stranger who just called on the phone and said, “keep your eyes open for me, would ya?”

“Great deals” go to those people who are committed to working with one agent because they find out about them and have someone ready to negotiate them into contract.

Aside from getting a value on your home purchase, you also get immeasurable support and guidance from your Real Estate Consultant. Buying or selling a property is an important and significant decision in your life with many financial and legal consequences/obligations.

You deserve to have the best counsel at your side.

Want to hear a NIGHTMARE from the field? Here’s an example of what can happen to you without the right representation…

Joe* was renting a fancy South of Market Loft back in 2004. One day, he came home to find a letter from his landlord saying that he was going to sell the loft and Joe had to move. Since most lofts are not under San Francisco rent control, it was true that he would have to move. Joe not only lived in his loft but also conducted his business out of it. The letter also said they landlord would be willing to sell the loft to Joe….

Why not? He knew the San Francisco real estate market was in the midst of a boom and all of his neighbors were selling their lofts for a great profit. Being self-employed, Joe did not have verifiable income or many assets. His credit was great so he was able to secure 100% financing NINA loan (No Income, No Asset). So what, if the loan had much higher interest rates that were only fixed for 3 years…the market was booming and his loft will appreciate.

And so, Joe bought his place. What’s the problem, you ask? It’s now 2007, and Joe’s interest rates are about to adjust. He can no longer qualify for a refinance because lending guidelines are stricter. Still without verifiable income or assets, Joe is stuck with his current loan. His current loan was already about 2% HIGHER than the typical loans and is about to jump up, A LOT. He can no longer afford to make the payments.

Okay, so he can sell the loft, right? Well, not so fast. Joe and his landlord conducted the sale privately, without benefit of Realtor representation or a sale on the public market. You guessed it! He paid WAY too much for his loft back in 2004. Instead of allowing a real estate professional to analyze the price for the listing and then letting the public make the final decision, Joe’s landlord set the price. Naturally, he inflated the price to his benefit.

2004 was the peak of this current market cycle. 2007 is at or near the bottom. Joe’s loft has not appreciated past the inflated price he paid. It was not worth what he paid then and it is not now. Joe cannot sell for a profit. In fact, he cannot sell for a break-even. This will be a loss and potentially, a big one.

The moral of the story: Capitalism works publicly for a reason. Buyers decide the value of a commodity, whether a stock or a house. By enlisting a trusted advisor and purchasing a publicly marketed home, you protect yourself. Allow the market to determine the value of your home, not the owner.

Of course, markets go up and down so it’s certainly possible to have your home’s value go down even if you paid the right price when you purchased. But just imagine how much worse it can be if you had paid even more than your home’s worth at the peak of the market…

*Names & details have been changed to protect the innocent.

 

 

5 Powerful Homebuying Strategies for San Francisco Homes, Lofts, Condos, & TICs: Part 4

Don’t Be Pushed Into Just Any House…

Your agent should show or highlight every property available that meets your requirements. Don’t make a decision on a house until you feel that you have seen enough to pick the best one.

For some people, this means seeing 5 properties while for others, it means 20.

Just be aware that San Francisco is a competitive and active market. If you wait too long or are too picky, you may very well lose the right home for you. Often, it takes more than one offer on a house to be accepted. As one client of mine, who learned the hard way how to make decisions quickly, “It’s San Francisco. The market just won’t wait for you!”

I believe strongly in clear intention. If your financial, emotional and psychological needs are in alignment, you will achieve success quickly. My clients are often amazed by how quickly & easily it all happened for them. I’m not.

The reason they achieve their goals is because they are in alignment with them.

When someone has been looking to buy a home for months or even years, I will bet you that something else is going on. It’s not that they haven’t seen anything that would work. Maybe it’s that they think the market is always about to tank & are waiting for that unicorn (aka, secret San Francisco real estate steal)? Maybe they have champagne tastes on a beer budget. Maybe they have the money but just aren’t ready in their heads and hearts to be home owners. Procrastination is a strong beast and we do it so easily.

If you say what you mean and mean what you say, you can make it happen. Get educated about the process up-front. Know what you want and what you can afford. Look only at appropriate properties to get a true sense of what your $ buys you in San Francisco. Be ready to pull the trigger. And voila, you, too, can achieve your real estate goal.

5 Powerful Homebuying Strategies for San Francisco Homes, Lofts, Condos, & TICs: Part 3

Play the Game of Nines!

Before house hunting, make a list of 9 things you want in your new home and 9 things you do not want. I call this “Nine of This and None of That.” You can use this list as a scorecard to rate each property you tour.

 

The house, loft, condo or TIC with the most things you want, wins!

Why bother making this list?

Having a concrete list you can refer back to helps avoid confusion and keeps things in perspective as you compare homes. You may see anywhere from 5 to 50 properties so it can get a little overwhelming.

By using your list, you will help target your search to only the most likely candidates and thus make your house hunting experience more enjoyable.

On that note, when you are out viewing homes, keep in mind the essential difference between SKIN AND BONES. The BONES are things that cannot be changed, such as the location, view, size of lot, noise in the area, and basic orientation/layout. The SKIN represents the most easily changed surface finishes, like flooring, counter tops, appliances, wallpaper, paint color, and window coverings.

Buy the house with the good BONES, because the SKIN can always be changed to match your tastes. I always recommend you view each property as if it were vacant. Consider each home on its underlying merits, not the sellers decorating skills. (Or lack thereof!)

In San Francisco, this is especially true. Sometimes, the best house for you is the beautiful staged one with the best marketing but sometimes….the best house for you is the cluttered, dusty one full of Granny’s plastic-covered sofas and tchotchkes It’s so important to view all of them rationally. The shag carpeting can be replaced!

And of course, take off your “renter’s cap” put on your “owner’s cap.” In other words, view property through the eyes of an empowered owner, not the restricted tenant!