// --> // --> San Francisco Real Estate - Residential: July 2006

Monday, July 31, 2006

Resource "green banks" opening in San Francisco

A reader asks:

I've recently heard the term "green banks". What are they, and are there any in our area?

Our reply:

Yes, the New Resource Bank, opening in San Francisco in September, specializes in helping "green" companies and green-interested individuals. See our previous article on Green Housing.

- Kathleen Macdonald

(Editor's note: we thought all banks were "green" just because of the money. Apparently we were wrong!)

posted by SFResidence.com @ 10:20 AM 0 comments

Sunday, July 30, 2006

Fed Eyes Housing: Potential Economic Catastrophe?

This article was posted yesterday from NewMax.com. Once again, more gloom and doom. What nobody is talking about is the fact that the Fed keeps raising interest rates thus killing the housing boom that the low interest rates fueled for the previous several years. From my point of view, if the Fed really wants to avert the scenario described below, they could just start lowering interest rates again. What am I missing?

- Mick Orton
===================================
It has been well documented that the U.S. housing market is currently in the midst of a downturn.

June brought yet another monthly drop in sales of previously owned homes, and according to The Christian Science Monitor, that number has “fallen in all four major regions of the United States from a year ago, with nationwide sales volume down 9 percent, according to a report released Tuesday by the National Association of Realtors.”

Homebuilders are cutting back on housing starts, rising interest rates and stagnant or lower home prices are stopping people from spending their home equity, and ARM-holders are getting crushed by a sudden spike in mortgage payments.

Meanwhile, the Fed is monitoring the situation carefully to determine whether current housing retrenchment will stay moderate or devolve into a severe situation that could badly damage the economy.

While the Fed has raised rates 17 times to combat inflation, they realized the hikes would eventually affect housing, but Bloomberg’s John M. Berry points out that another development has only just become apparent.

“What has only become evident in recent months is that, perversely, the big decline in housing affordability – due to the combination of double-digit housing price increases year after year and higher mortgage-interest rates – would cause a surge in core inflation,” says Barry.

“Would-be homeowners – either priced out of the market or simply fearful that the value of a home purchased now could fall in coming months – are renting instead. As a result, rents of residences and the so-called owners' equivalent rent components of the consumer price index have shot up this year.”

Barry goes on to say that these components of the CPI are so critical that when they rose, they accounted for almost two-thirds of the percentage point rise in core CPI for the first six months of 2006.

Federal Reserve Chairman has insisted that the impact of housing on the economy has been “orderly,” and most economists seem to agree. While few see the housing slowdown spurring recession, some do expect that it will slow economic growth considerably.

“Economists at Merrill Lynch, for example, reckon that the dive in homebuilding alone could subtract a percentage point from overall gross domestic product in the third quarter, tugging GDP growth down to perhaps 2.5 percent, annualized, for that quarter,” says the Monitor.

But some are predicting far worse.

“… recession is a real possibility, in the view of Merrill Lynch's David Rosenberg. After the past 10 peaks in new-home starts by builders, an economy-wide slump has followed seven times. Housing starts, like home sales, peaked last summer.”

Editor's Note:

Contrary to what Bernanke says, he, the federal government, and politicians love insidious inflation. It is the easiest political way out of the massive private and public debt that hangs over the U.S. economy like an open noose. Go here now.

- Newsmax.com

posted by SFResidence.com @ 10:56 AM 0 comments

How important are views in San Francisco Real Estate?

A reader asks:

Why is view property in San Francisco such a big deal? Some of the prices I've seen seem pretty outrageous, especially on properties that are small or have no parking. What are your thoughts?

Our reply:

You've heard a picture is worth a thousand words, then a view can be worth a million dollars... sometimes two million. Many people looking to live or invest in San Francisco Real Estate feel that views are really important. Why not? We have a beautiful city so who wouldn't want to look at it when they wake up in the morning or before they go to bed at night?

Let's take an example. A condo, 3 bedrooms and 2 baths, selling in the middle of Cow Hollow with no view and no parking would probably sell for about $1,200,000 to $1,400,000 at the time of this writing. At the same time a similar one on Russian Hill with a panoramic view might fetch as much as $2,000,000. What changed? The view!

View properties are more desirable for vacationers too. Check various vacation rental websites like CyberRentals for San Francisco and you will see that the view properties command the higher rates.

Parking, especially in hard to park areas like Russian Hill, Telegraph Hill and Pacific Heights, can effect the value of a condominium by as much as 20%. We sold a beautifully remodeled condo on Russian Hill for $740,000 without parking. If it had included parking, the selling price would have probably been in the high $800's or even $900,000+.

- Janis Stone

posted by SFResidence.com @ 1:19 AM 0 comments

Saturday, July 29, 2006

Home Prices May Fall

This article was posted today from NewMax.com. While we do not subscribe to the gloom and doom scenario for San Francisco Real Estate, it is true there has been a correction from the frenzied market of a year ago.

Note the liberal use of the words "could" and "would" in this story indicating that this is a forecast, not actually what has happened or is happening. Here's what they are saying.

- Mick Orton
===================================
The National Association of Realtors yesterday announced that home prices could start to fall nationwide in the coming months for the first time in a decade, reports USA Today.

They made the announcement on the heels of reporting that existing home sales tumbled in June, for the eighth time in 10 months. The NAR also said that the number of homes for sale reached its highest point since 1997.

David Lereah, NAR chief economist, tells USA Today that he expects “price numbers to start deteriorating.”

In some markets, prices are already falling. Prices of condos nationwide have fallen 2.1 percent in a year. Single-family home prices increased just 1.1 percent from last year. “Prices got too high in some local markets,” Lereah said. “So you're seeing two things occur: Investors are leaving quickly, and regular home buyers are staying on the sidelines.”

As a result, there’s a 6.8-month supply of single-family homes and an eight-month supply of condos, according to the NAR. Compared to a year ago, existing home sales are down 8.9 percent.

“Markets which have been the hottest are quite likely to see home price declines,” John Ryding, an economist at Bear Stearns, tells USA Today. “In those markets, you could see declines for the year.”

In the West, which includes hot housing markets California, Nevada, and Arizona, sales of existing homes fell 17.1 percent in a year. The California Association of Realtors announced that home sales plunged 26 percent in a year and are off 20 percent for 2006.

“Affordability has probably hit a record low,” Robert Kleinhenz, deputy chief economist for CAR, tells USA Today.

In the Northeast, another hot housing region, sales fell 9.8 percent. The Midwest experienced a 6.2 percent decline in sales, and sales in the South fell 5.5 percent.

The Washington Post reports that home prices in the Washington, D.C. area are falling in certain areas for the first time in five years.

Peter Morici, an economist at the University of Maryland, tells the Post “prices could drop 10 percent by the end of the year, and perhaps by 20 percent ‘by the time it's all over.’”

Editor's Note:

Real-estate expert and Yale professor Dr. Robert Shiller says that housing prices nationwide could fall by as much as 40% over the next few years. In this exclusive interview, find out how the five ways to protect yourself and profit from the coming real estate crisis. Go here now.

- NewsMax.com

posted by SFResidence.com @ 9:52 AM 0 comments

Commission from liquidated damages in San Francisco Real Estate

A reader asks:

Recently one of my friends had his house on the market. They had a buyer in contract who pulled the plug and decided not to buy at the last minute. It went to arbitration and a considerable amount of money was given to the seller. I was surprised to hear that the broker took some of this money as commission. Is this legal and ethical?

Our reply:

Yes it is legal and ethical if it is specified in the listing and/or purchase contract. The listing agreement and the purchase agreement are legal documents that should specify who receives liquidated damages in the case of a default of the buyer. Just as the seller was damaged by the breach of contract of the buyer so was the listing agent who spent time and money marketing the property and brought a buyer that put up money as a deposit. So both the seller and the listing agent are entitled to damages from the breach of the contract of the buyer. However the agent that represented the buyer is not entitled to receive damages from the deposit.

- Janis Stone

posted by SFResidence.com @ 9:47 AM 0 comments

Friday, July 28, 2006

Explaining "common areas" in condominiums - San Francisco Real Estate

A reader asks:

What does “common garden” mean for a condominium I am thinking about purchasing?

Our reply:

A with any "common area", it means that everyone in the condo association can use it, and no one has exclusive rights to it. It also means that the cost of maintaining the garden is a common area expense and is included in your HOA dues.

- Janis Stone

posted by SFResidence.com @ 9:29 AM 0 comments

Thursday, July 27, 2006

It's official! Home sales now a 'buyer's market'!

Sales fell for third straight month in June; nearly flat prices make double-digit gains seem like a distant memory.

NEW YORK (CNNMoney.com) -- It's official - even the nation's leading group of real estate agents now says it's a buyer's market in housing, as a soaring supply of homes for sale means nearly flat prices and longer waits for sellers.

The news came in the National Association of Realtors' report for June, which showed that home sales fell to the slowest pace since January while price gains were the smallest in over a decade.

The industry group said sales of existing homes fell to an annual rate of 6.62 million in June, compared with a 6.71 million pace in May. Economists surveyed by Briefing.com had forecast sales would slow to a 6.60 million rate.

June was the third straight month of declines, leaving sales 9 percent below year-ago levels, the group said. Moreover, the weakness was widespread, with sales falling in each of the four regions of the country.

The median home price did edge up to $231,000 from $229,000 in May.

But that marked only a 0.9 percent increase from a year earlier - the smallest year-over-year gain in home prices since May 1995.

As recently as October, prices had jumped a record 16.8 percent from a year earlier due to tight supplies and bidding wars among buyers.

"The change in price performance is directly tied to housing inventories - a year ago we had a lean supply of homes and a seller's market, with monthly home sales at an all-time record high," David Lereah, chief economist for the group, said in a statement.

"Sellers have recognized that they need to be more competitive in their pricing given the rise in housing inventories," he added.
The inventory of homes on the market is now at 3.7 million, up a whopping 39 percent from a year ago, or a 6.8-month supply at the current sales pace, up from a 4.4-month supply in June 2005.

The Realtors statement said the market has shifted to a "buyer's market," which it said is good news for those shopping for a home even if it posed a problem for those looking to sell.
"People who were discouraged by the bidding wars that were so common over the last few years are finding more choices now," said Thomas Stevens, a Realtor from Vienna, Va., who is president of the group.

Regionally, existing home sales in the Northeast saw the biggest decline, followed by the South.
Sales in the South fell 2.3 percent from May to a annual pace of 2.57 million, which was 5.5 percent below the rate a year earlier. The median price slipped to $191,000, down 0.5 percent from a year earlier.

Northeast sales slid 3.5 percent from the prior month and were 9.8 percent below a year ago. The median price in the Northeast was $298,000, up 7.2 percent from June 2005.

Sales in the Midwest were unchanged from a month earlier and down 6.2 percent from a year ago. The median price in the Midwest was $175,000, 1.7 percent below June 2005.

Existing-home sales in the West were also unchanged from May but sank 17.1 from June 2005. The median price in the West was $342,000, the same as a year ago.

- Chris Isidore, CNNMoney.com senior writer

posted by SFResidence.com @ 12:30 AM 0 comments

Wednesday, July 26, 2006

Buying San Francisco Bay Area home trumps Barry Bond's Ball!

Even Barry Bonds can't beat the housing market in the San Francisco Bay Area. Andrew Morbitzer decided to auction the #715 home run ball of Barry Bonds to pay off some debt and purchase a new home!

"Bills from his recent wedding to wife Megan and their desire to enter the pricey Bay Area housing market -- median home price in June: $644,000 -- trumped thoughts of keeping the ball," says AP sports writer Gregg Bell in an online article.

Apparently the ball will be auctioned on eBay and bids may be made through August 3 at 3 PM, Eastern Daylight Time.

- Mick Orton

posted by SFResidence.com @ 11:47 AM 0 comments

Replacing windows in a San Francisco condominium

A reader asks:

How easy is it to replace the windows in my condominium?

Our reply:

In most condos you have to refer to the CC&R's to find out the answer since there are stipulations as to what will need HOA approval. Usually you can replace them if they are the same and they don't change the exterior look of the condo. So if you want to replace the single pane with double-paned (to make your unit quieter) and they look the same it is probably ok.

You might check with the other condo owners and see if they would also like to get new windows. If you can get a group together you might even get a better deal on the cost. Even better, it might be a common area expense for the HOA, and the cost can be shared among all of the owners.

- Janis Stone

posted by SFResidence.com @ 1:12 AM 0 comments

Tuesday, July 25, 2006

Coldwell Banker supports Habitat for Humanity in San Francisco

Coldwell Banker is proudly joining forces with Habitat for Humanity in our annual fundraising raffle. Now through September 1, 2006 our Sales Associates are joining forces in an effort to raise more than $500,000 for Habitat for Humanity, bringing our total funds raised in the last eight years to a remarkable $1.7 million.

Tickets for the raffle are just $2 and all monies raised benefit local Habitat for Humanity chapters. Stop by your local Coldwell Banker office today to help make the dream of home ownership a reality for one local family in need. Or you may contact us at (415) 229-1259 and speak to Christine Serventi.

You may also contact Kacie Ricker at (925) 275-3085 for questions relating to Coldwell Banker Northern California's support of Habitat for Humanity. For more information from the website, click this link.

- TRI Coldwell Banker, Van Ness Office, San Francisco

posted by SFResidence.com @ 7:38 AM 0 comments

Tank inspections in San Francisco

A reader asks:

People I know bought a house in San Francisco recently. and were told they had to have a "tank inspection". This sounds a little strange to me. Is this a scam or something normal when buying real estate anywhere?

Our reply:

Well, I don't know about anywhere else, but in San Francisco there was a city ordinance passed about 15-20 years ago that made it the responsibility of homeowners to remove an underground storage tank (used for storing heating oil and gasoline for emergency generators) if they discovered they had one. Not every property in San Francisco had one but many large houses and apartment buildings did.

The reason this is such a big deal is because about 15-20 years ago (you think this is why the city ordinance was passed?) a developer in San Francisco lost his house to the bank. After the bank foreclosed on it, it was discovered that this large, remodeled, view home in Pacific Heights had an underground storage tank which had leaked all the way down the steep hill... costing the bank hundreds of thousands of dollars to clean up!!!

Now lenders usually require that the buyers make the sellers have an inspection before they will lend on properties in San Francisco , and if a tank is found they must have it removed before close of escrow. Quite often if a property has been sold previously a tank inspection will already have been done. So the inspection is an important document to keep in the file for resale. If this document is lost, Golden Gate Tank Removal does the majority of tank inspections and removals and may have a report on file for any given property.

- Janis Stone

posted by SFResidence.com @ 6:58 AM 0 comments

Monday, July 24, 2006

How to choose the best San Francisco Real Estate Agent

A reader asks:

I am trying to choose an agent to represent me for locating a property to buy in San Francisco. After looking through the Sunday paper, I am finding all sorts of Realtors who claim to be the top agent for their company. How do I choose the right one for me?

Our reply:

Choosing a Realtor is not as hard as you think. The old adage tends to be true; "People do business with people they like." When buying property in San Francisco, you are lucky. We have some of the top agents in the country doing business right here in the City. Our suggestion is to pick several and interview them before deciding to work with one as different agents have different styles. One may like to use e-mail while others prefer to use the telephone. Another may contact you all times of the day while others may not call you unless they have something to show. You get the idea.

The online magazine, Fifty Plus has a feature that lists some things you might consider. Here are a few key points they make:
  • Do start by asking family and friends if they can recommend an agent that they have successfully worked with in the past.
  • Compile a list of several agents and take time to talk to each before choosing one. You want an agent who listens well and understands your needs.
  • Your ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need.
  • Another way to become familiar with realtors in your area is to check local newspaper and other advertisements. You can, of course, meet a realtor at any open house you visit, especially in areas where you think you might want to live.
  • Once you’ve narrowed down your choices to a couple of real estate agents, interview them to find out which one has the best combination of experience and knowledge in the type of home and area that you are interested in. Ask them for references from previous buyers and sellers who have worked with them.
  • Keep in mind that the real estate agent will be spending a great deal of time and effort to help you find the right home and will not be paid until the transaction is completed.

The American Homeowners Association has another good article with their top 10 tips.

In the end, choose someone who works the way that you do and communicates as much or as little as you prefer. Take a look at our previous article to the For Sale By Owner for a list of some things to expect from your Realtor. Good luck!

- Mick Orton

posted by SFResidence.com @ 8:19 AM 0 comments

Sunday, July 23, 2006

San Francisco Real Estate Market Update for 7/10 - 7/16/06

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

The market always seeks equilibrium after a period of rapid appreciation. Between 2003 and 2005 sellers experienced accelerated appreciation. Many properties increased in value from 30-80%. This kind of appreciation cannot be sustained. There is an old expression sellers are 6 months behind the market and buyers are 6 months ahead of the market. This has been particularly true of the first half of this year. We are seeing that sellers are becoming more in tune with the new reality. It is not 2005 prices. The number of multiple offers has slowed in many areas to a trickle. There are some areas that are exceptions, but those are due to lack of inventory and built up buyer demand. For example the 20 offers on a $699.000 fixer in Palo Alto or the 27 offers on a Parkside fixer in San Francisco. These are not the norm. However what it does show is the market is still active when buyers see true value.

Most buyers today are much more pragmatic than a year ago. In areas were we have seen large run up of inventories there is no sense of urgency. Sellers are beginning to understand this new environment. We have been seeing increased numbers of price reductions. Sellers are becoming more willing to do the work necessary to merchandise their properties. For those sellers that do, they will reap the rewards. For those that don’t, their properties will remain on the market or eventually decide not to sell. Buyers will move once they see the value.

In many market places we are still seeing good open house activity. This is especially true of homes held open for the first time. After the first time, activity lessens. Buyers are on the hunt---looking for that house that has real value in their eyes. When they find it they are moving on it. This is certainly an opportune time for buyers---given the selection of properties and their increase negotiating power.

Here are the numbers for the week of July 10-16: 10 offices showed increased listing inventories, 17steady and 1 decreasing---8 offices reported increased sales activity, 14 steady and 6 decreasing.

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 10:54 PM 0 comments

Trees as Landmarks in San Francisco! We're not kidding!

A reader asks:

I just heard something crazy from a friend of mine. Is there really a push in San Francisco to allow the City to designate certain trees as landmarks, even on private property?

Our reply:

You're surprised to hear this? Given the nature of San Francisco politics, this is an easy one to believe. It all started when a homeowner wanted to remove a cypress tree on his property. It just so happened that there is a flock of wild parrots in this area of Telegraph Hill that uses the cypress trees to roost. Although the tree is one of many, it became and issue and is now under review to become law. Although it is not clear if the City will participate in the maintenance of these "landmarks"; in the end, the property owner will probably be responsible.

- Mick Orton

posted by SFResidence.com @ 10:44 AM 0 comments

Glossary of real estate terms - San Francisco and beyond - Part 1

Below is part 1 - glossary of real estate terms

Acceleration Clause:

This gives a lender the right to demand immediate full repayment of a loan if the terms of the loan are not met.

Ad Valorem Tax:

Tax that is based on a property's assessed value.

Agency Disclosure:

Requires real estate agents who act on behalf of the buyers or sellers to disclose who represents whom in a real estate transaction.

Amortization:

When a loan is repaid in equal payments at consistent intervals over the full term of the loan. This results in the complete payoff of the loan by the end of its term.

APR (Annual Percentage Rate):

This is simply your effective interest rate, calculated by taking your actual interest rate and accounting for allt he loan related closing costs, as expressed over the full term of your loan (i.e. 30 years). It was created to help borrowers better compare interest rates offered by lenders.

Arbitration:

A process in which an impartial third party listens to both sides of a dispute and typically issues a binding decision.

As-Is Condition:

The purchase or sale of a property in its exisitng condition.

Balloon Mortgage:

A home loan, although typically set up on a 30-year repayment schedule, requires the remaining balance-called the baloon payment-be paid in the future at a specific time, typically after the first five or seven years.

Closing Costs:

The various expenses above the cost of the property that buyers and sellers incur in a real estate transaction.

*reprinted courtesy of California Real Estate magazine, September 2005 issue

posted by SFResidence.com @ 8:21 AM 0 comments

Saturday, July 22, 2006

FREE newsletter about San Francisco Real Estate

We send out a FREE monthly e-newsletter that gives information about the ever-changing real estate market in San Francisco, changes in interest rates as well as chances to get FREE Giants tickets.

We also publish market statistics on our website as well as a weekly update written by Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area.

If you would like to subscribe to the e-newsletter, please e-mail info@sfresidence.com and put subscribe in the subject line.

- Mick Orton

posted by SFResidence.com @ 8:18 AM 0 comments

Friday, July 21, 2006

Buyers of San Francisco Real Estate can receive FREE e-mail listings!

Did you know that the San Francisco MLS provides for potential buyers to receive new listings by e-mail the minute they become available? This is an incredible opportunity to hear about a property FIRST! And it's FREE! Just send us an e-mail to Sales@SFResidence.com along with the type of property you are interested in buying and we'll set you up!

You may also visit our website at www.SFResidence.com to do your own MLS property search, read about the various neighborhoods in San Francisco, see our latest features and listings as well as view a history of our sold properties!

- Mick Orton

posted by SFResidence.com @ 11:32 AM 0 comments

San Francisco announces Section 8 Homeownership Program

As announced in one of our earlier articles, the San Francisco Housing Authority is preparing to launch the "Housing Choice Voucher (Section 8) Homeownership Program".

A list of properties will be made available to purchase outright, or lease with the option to purchase through this program.

They will also introduce a new financial service model called "Pay Rent, Build Credit". For more information visit their websites at PayRentBuildCredit and PRBCReports.

- Mick Orton

posted by SFResidence.com @ 8:44 AM 0 comments

Tips for Selling your San Francisco Real Estate

Ellen Florian Kratz, Fortune writer says in a May 8, 2006 article published by CNNMoney:
==============================
Price it right
The worst mistake a seller can make in a softening market is to overprice a home. Even putting a high price on your home to "test the market" for a few weeks (with the notion that you can always lower it later) is a bad idea.
Your goal should be to seal a deal during "the first two or three weeks your house is new to the market,"...
Set the stage
In a faltering market you need to stand out. That's where something called staging comes in - that is, sprucing up your home in a way that encourages prospective buyers to envision themselves living there.
The first step is to rent a storage locker and fill it with all that clutter from the attic, basement, and garage...
Hire an agent
You may hate the idea of parting with 6 percent of your home's value, especially when you're facing the prospect of getting less than you dreamed of. And with the Internet making do-it-yourself sales easier than ever, you may be tempted to dispense with an agent.
But in a tougher environment, marketing is everything, and an experienced agent--that is, one who didn't recently jump into the real estate gold rush - can be invaluable in helping you price your home correctly and in getting it noticed by prospective buyers. An agent can also steer you through the tortuous sales process and keep a deal on track when the inevitable glitches crop up...
Reprinted in part from CNNMoney.com. To read this excellent article click here.
- Ellen Florian Kratz

posted by SFResidence.com @ 8:35 AM 0 comments

Transferring San Francisco real estate for asset protection or estate planning purposes may cause problems

A Reader Asks:

Recently I contacted our friend at the title company to see about transferring our properties into entities such as an LLC or a LP to protect our assets. The information I got back from her is shocking. Who is the best person to contact when trying to do these types of transactions?

Our reply:

We know!!! After a wealth planning seminar with a nationally-known CPA, one of our clients came away with a plan to move properties out of their name and into entites; a Limited Liability Company (LLC) for some properties and a Limited Partnership (LP) for others. The managing partner in all cases was a California C Corporation owned by one the business partners.

At the start (and in theory) it sounded slightly complicated, but simple enough to execute. However, when they went to do the transfers, there were a few things that hadn't been considered:
  • To transfer out of state properties, the deed needed to be prepared by an attorney specializing in this area (costing about $250 for the title company to handle it).
  • Another issue was that a transfer tax would be due based on the percentage the original owner of the property not owned in the new entity. (Let's take an example of a $1M property owned by Joe Smith. In the entity, XYZ, LLC, his percentage of ownership in the company is 49%, another individual owns 49% and the C corporation owns 2%. This means transfer tax was due on 51% of the property.)
  • The transfer would probably void the title insurance.
  • The event could give the lender grounds to call the loan.

Needless to say, they were disappointed since these entities are expensive to set up and maintain. Each one requires:

  • registering with the state and preparing legal documents
  • separate bookkeeping
  • separate bank accounts
  • the added burden of IRS reporting and taxation

In short, this is a very complicated and expensive undertaking. Be sure to consult an attorney who specializes in this type of asset protection and see if it is worth the amount of protection you will receive versus the potential cost of not doing it. There are companies that will set up the entities online, but may not be worth the expense if you are not sure what you are doing and set them up wrong!

- Mick Orton and Janis Stone

posted by SFResidence.com @ 7:50 AM 0 comments

Thursday, July 20, 2006

"Parking" your stuff in the garage of San Francisco condominium

A reader asks:

I do no have a car. Can I use my parking space for storage in my condominium building?

Our reply:

Just because you choose not to park your car in a parking space of the condominium, doesn't mean you can use it for anything you want. Some associations do not allow boats, lawn mowers and other things "on wheels". In the case of miscellaneous storage items, you have to check the CC&R's (Covenents, Conditions and Restrictions) for the condominium or the house rules. If it is not allowed it should be stated in those documents.

- Janis Stone

posted by SFResidence.com @ 8:34 AM 0 comments

Mayor's first time home buyer's program in San Francisco

A reader asks:

I've heard there is a first time home buyers' program in San Francisco. What is this and how does it work?

Our reply:

The Mayor's Office of Housing states, "affordable housing programs are directly associated with specifically designated properties. All properties eligible under the affordable programs, monitored by the Mayor"s Office of Housing, are private sales transactions with unique requirements and restrictions. All information regarding the program requirements for a specific home can be obtained from the current owners (sellers) or their representative agents or brokers."

In short, only certain properties qualify for program, and these have certain restrictions placed on buying and selling them. The good news for buyers is that people who might not normally qualify for buying their first home can get assistance to do so rather than continue to throw away money on rent. One of the downsides is that if you sell, you may only take a certain amount of profit rather than let the market dictate the price. This ensures the properties will stay in the pool available to other first time buyers who are in the Mayor's Program.

As with any government program, there are forms to fill out and conditions the buyer must meet to qualify, but the extra work could be worth the effort to get started in owning your own home.

- Mick Orton and Janis Stone

posted by SFResidence.com @ 7:54 AM 0 comments

Wednesday, July 19, 2006

Fee for a buyer's agent in San Francisco

A reader asks:

Do I have to pay a fee to have a buyer’s agent in San Francisco?

Our reply:

Not usually. If the property is listed with a Realtor then the seller's agent "cooperates" with the buyer's agent and shares the commission with them. For example, if the listing agreement is signed for a 6% commission, then the buyer's and seller's agent normally splits this 50-50.

However, because this amount is on the listing agreement, the seller's agent may choose to do a different split. The amount given to the buyer's agent is published in the MLS. However, if you have signed a Buyer's Broker agreement contract with a Realtor and they are representing you as a buyer's agent, and if they buy a property that is not listed with a Broker (in the case of a For Sale By Owner), then you may owe the broker a commission if the seller refuses to pay a commission. But this is not the typical situation.

- Janis Stone

posted by SFResidence.com @ 9:06 AM 0 comments

Tuesday, July 18, 2006

Adding appliances to a condominium in San Francisco

A reader asks:

Can I add a dishwasher to my kitchen or a washer & dryer to my unit? And do I need a permit to change the appliances in my kitchen?

Our reply:

The biggest thing to consider when adding a dishwasher is whether or not you have room.

In and older building it is not always possible to add a washer and dryer because of the plumbing. One case we know of required a $10,000 sewer upgrade but was approved by the association. In another situation a stackable washer and dryer were added without permission. Eventually this caused the sewer to backup and had to be removed. We recommend you check with the homeowner's assocaition first to see if it is allowed.

As to your second question, if you are just replacing existing appliances you do not need a permit. However, if you are moving or adding plumbing or wiring then you do whether you do the work yourself or have a plumber or electrician make the changes.

- Janis Stone

posted by SFResidence.com @ 7:15 AM 0 comments

Monday, July 17, 2006

Taking ISSUE with the Chronicle's view on San Francisco Realtors

A reader asks:

Recently I read in the Chronicle that, "Agents are salespeople who can't get a job." If Realtors are held in such low esteem, why do I need one to buy or sell a home?

Our reply:

Ouch! We saw that article too and were surprised that the section of the paper which sells tons of ads to real estate agents would be so insulting to them. Kind of like biting the hand that feeds them, isn't it?

If being a Realtor is so easy and requires no brains or skills to do the job, then why does the National Association of Realtors (NAR) report that 86% of new agents fail during the first year? The drop out rate is even higher over 3 years.

From a seller's point of view, according to the National Association of Realtors, those who do not use a real estate agent receive 16% less for their property than those who are represented by a real estate professional.

There are so many things that you have to know in order to help your clients make a good decision. Having practiced real estate for over 30 years, we have had to be counselors, financial advisors; know architecture, building codes, disclosure issues, city politics, traffic patterns, zoning laws, construction codes, school districts, neighborhood characteristics, and then have resources available for all of these fields.

Buying a home is probably the largest purchase a person will ever make in his or her life so to not use a professional person who does this for a living seems like a very foolish decision. In San Francisco the value of property not only changes within a couple of blocks but it can be very different within the same building.

Another major factor in using an experienced agent is the value of negiotiation. We have been able to negiotiate terms for clients that can mean a savings of thousands of dollars realized either immediately or over the term of the ownership.

A good agent also advises a seller on strategies to make the property look the best which can produce a better sales price than other comparable properties.

Helping buyers and sellers reach their goals can be one of the most challenging and rewarding professions and is not easy---- just ask anyone who has tried to do this on their own!

- Mick Orton and Janis Stone

posted by SFResidence.com @ 9:56 AM 0 comments

Protecting views in San Francisco Real Estate

A reader asks:

Is my view protected from other people’s construction in the future?

Our reply:

No, views are not protected in San Francisco as a general rule. However, many times neighbors will claim that their air and light is in jeopardy if someone builds or plans to build something which would block their view.

However, there are height restrictions in most areas of San Francisco. These are the best determining factor for the risk of losing your view.

- Janis Stone

posted by SFResidence.com @ 8:17 AM 0 comments

Sunday, July 16, 2006

San Francisco Real Estate Market Update for 7/3 - 7/9/06

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

"Typical Fourth of July week----for the most part open homes were less well attended and sales a bit sluggish. Why not, it was a beautiful weekend. Listing inventories continue to increase and the same sales patterns continue by region.

"The SF/Peninsula continues to lead in highest percentages of multiple offers. While virtually all of the rest of the Bay, with a few exceptions, multiple offers have all, but disappeared. Price reductions continue in the North and East Bay. One change we have noticed is the Monterey Peninsula seems to be coming to life again. After a strong first quarter, the Monterey Peninsula tailed off, looks like they are picking up a little momentum in the third quarter.

"Given current months supply of inventory the strongest market is the SF/Peninsula, which still finds itself in a seller to balanced market depending on area. The upper end which has been strong all year is beginning to ease back, that is the market over $ 3 million. The North and East Bay is somewhere between a balanced to buyer’s market depending on location. East and West Contra Costa county has the highest build up of inventory. Those areas where sellers are competing with new home sales are faced with stiff competition due to developer incentives and price reductions.

"Condos as a property class are seeing the largest build up of inventory. Pricing has become the defining element as to whether those listings in condo developments will sell. As condo inventories in particular developments increase, buyers tend to view them more as a commodity, since all the units are similar.

"Although the market has slowed from the last several years we all need to keep in mind that 2004 and 2005 were exceptional years and that this year is more in line with what is considered a normal market with longer marketing times and where price and merchandising become key components in the sale of homes. Buyers do not have the same sense of urgency as last year. Also there is great diversity between markets you cannot paint the entire Bay Area with one broad brush. Even within cities you can have one area being a seller’s market and another being a buyer’s market. The key is desirability of an area and supply of inventory.

"Here are this week’s numbers:12 offices reported increased listing inventories, 15 steady and 4 decreasing---6 offices showed increasing sales activity, 19 steady and 6 decreasing."

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 9:52 PM 0 comments

FREE estimates of your San Francisco Real Estate

A reader asks:

Short of paying for an appraisal, is there a cheaper way to get an estimate of our home's value?

Our reply:

If you are just curious about what your home value is, or what the homes in your neighborhood are, you can use FREE sites such as Zillow.com or RealEstateABC.com. They will give you a general idea of your home's value, but are only estimates.

If you are seriously considering selling a better choice might be to have a Realtor do what is called a "Comparative Market Analysis" or CMA on your home. In this case the agent will run comparables of what houses have sold in the past several months which closely match your property (i.e. square footage, number of bedrooms, baths, parking or not, etc.) This type of estimate tends to be more accurate than the websites.

Ultimately the market will tell you what your home is worth once you decide to list it and find a willing buyer.

- Mick Orton

posted by SFResidence.com @ 8:42 AM 0 comments

Saturday, July 15, 2006

Repairs to make your San Francisco real estate more presentable

A reader asks:

What are some common suggestions of items to repair (such as floor, painting, etc) that will make a property more presentable when selling?

Our reply:

If your budget will allow it, it is often a good idea to paint the interior walls and woodwork a warm, neutral color. Another suggestion would be to either power wash or paint the exterior and/or trim, especially the front door. Remember, you never get a second chance to make a good first impression!

If the hardwood floors are in bad condition or if there is carpet that can be pulled up with hardwood floors underneath, it is a good idea to have the floor refinished. Of course, this can be disruptive and is easier to do if you are not living in the property at the time.

Sometimes kitchens and baths are older while still being generally functional, so you can try to make those rooms look as fresh and clean. But do not spend a large amount of money remodeling.
Of course, every situation is different. Depending on your what your market is like, you should consult with your Realtor first. They should be able to advise you on how much you need to do to get the best price.

- Janis Stone

posted by SFResidence.com @ 2:20 AM 0 comments

Friday, July 14, 2006

"Dressing" your property for success!

A reader asks:

What are the benefits to staging before placing a property on the market?

Our reply:

Staging is a decorating technique designed to present properties in their best light for selling. This includes removing personal items and clutter from rooms and arranging furniture so that a property appears spacious, bright and appealing. It is not necessarily how you would place furniture or art if you were living in the property, but it shows off the good points and minimizes the defects.

A good stager can help a property sell faster and for a lot more money. Sometimes it can even be the difference between selling and lingering on the market without any offers. Instead of a property being shown when vacant, staging can actually make a property seem larger and allow buyers to see how their furniture might fit. Vacant properties often appear smaller and colder than well staged ones.

One of the most talented decorator and staging professionals in San Francisco, Arthur McLaughlin, will give a free estimate and work with the homeowner's furniture or bring in items. We highly recommend that a seller have a consultation and see what can be done to improve how the home shows.

- Janis Stone

posted by SFResidence.com @ 7:57 AM 0 comments

Crime and safety in different areas of San Francisco

A reader asks:

Where can I find information on the crime and safety in different areas of San Francisco?

Our reply:

The best information can be obtained from the police department. There is a crime maps website posted by the San Francisco Police Department. After agreeing to the terms at the bottom of the page, you can go through their automated process to find statistics and maps for various types of crime.

- Janis Stone and Mick Orton

posted by SFResidence.com @ 7:51 AM 0 comments

Thursday, July 13, 2006

A "normal" deposit for buying San Francisco Real Estate

A reader asks:

Do buyers generally put down 3% or is that flexible when making an offer?

Our reply:

The amount of deposit that is given with the initial purchase offer can reflect the seriousness of the buyer. We encourage buyers to make the largest deposit they are able to (up to 3%) when we present their offers. This shows the seller 1) that they have cash available, 2) are qualified buyers and 3) are serious about purchasing the property.

However, if the buyer's money is tied up in investments and will take some time to liquidate, the initial deposit could be any amount but usually a minimum of $1,000 which is then increased to 3% within a short period of time or upon removal of contingencies. This same approach applies when the buyer is getting 100% financing.

The reason 3% has become generally accepted as the deposit up to close of escrow is because of the liquidated damages law in California. This clause in the sales contract reads as follows: "Item 27. LIQUIDATED DAMAGES. If Buyer fails to complete this purchase because of Buyer's default, Seller shall retain, as liquidated damages, the deposit actually paid. If the Property is a dwelling with no more than four units, one of which Buyer intends to occupy, then the amount retained shall be no more than 3% of the Purchase Price. Any excess shall be returned to Buyer. Release of funds will require mutual, signed release instructions from both Buyer and Seller, judicial decision or arbitration award. BUYER AND SELLER SHALL SIGN A SEPARATE LIQUIDATED DAMAGES PROVISION FOR ANY INCREASED DEPOSIT (e.g., CAR Form RID)."

- Janis Stone

posted by SFResidence.com @ 8:06 AM 0 comments

Wednesday, July 12, 2006

Visitors want to know about the weather in San Francisco

A reader asks:

As a first time buyer coming from the Mid-west, what areas in the City get the most fog? Is it foggy in San Francisco year-round?

Our reply:

It is called the "fickled finger of fog" for a reason..... sometimes it cannot be predicted and comes and goes without explanation. For instance, last week we had fog and cold weather every night except on July 4th! That night it was perfectly clear, and fireworks could be seen all over the Bay area! Then the following night (and almost every night thereafter) the fog was back.

San Francisco's foggiest months are June, July and August. However, that doesn't mean it is foggy every day and is not usually foggy during the day all over the City. As we said before, it is unpredictable.

There are areas that are consistently foggier more often and longer during the day. Generally speaking those areas closest to the ocean (not the Bay) are colder and have more fog; neighborhoods such as Richmond, Sea Cliff, Lake St., Sunset, Golden Gate Heights, Parkside, St. Francis Wood, Monterey Heights, West Portal, Lakeshore, Stonestown, Merced Manor, Merced Heights, Lakeside, Ingleside Terrace, Ingleside, Oceanview, Balboa Terrace, Mt. Davidson Manor, Westwood Park/Highlands, Miraloma Park, Forest Hill & Extension, Diamond Heights, Midtown Terrace, Forest Knolls and Twin Peaks. Sounds like most of the City, doesn't it??? Yet even within these districts there are "banana belts"-- small areas where it gets warmer and the fog tends to clear more often or earlier in the day.

Going eastward there tends to be less fog and it clears earlier in the day. They warmest areas of the City tend to be the Mission, Noe Valley, Potrero Hill, South of Market and Mission Bay. The other areas are somewhere in between. Of course some days, expecially in July and August, the fog persists all day long all over the City and the tempertature stays in the high 50's and low 60's.

The good news is that when we have those heat waves where the temperatures reach the 80's and 90's we have the fog to look forward to -- we like to call it "San Francisco air conditioning"!

- Janis Stone

posted by SFResidence.com @ 1:15 AM 0 comments

Tuesday, July 11, 2006

Golden Gate bridge tolls

A reader asks:

If you live in Marin county, is there a monthly pass to get across the Golden Gate Bridge, or do you pay 5 dollars a day everyday?

Our reply:

No, there are no monthly passes for the Golden Gate Bridge which connects Marin County to San Francisco. And the days of buying booklets of discounted bridge "tickets" have gone away with the new FasTrak system. It is $5 to cross the bridge at the time of this writing but costs only $4 with FasTrak.

By putting a credit card on file with the district, you receive a transponder to put in your car's window. Then your card is charged in $40 increments, and $4 is deducted every time you cross the Golden Gate Bridge. This transponder now also works for all 8 of the Bay Area bridges including the Richmond-San Rafael Bridge, the Oakland-San Francisco Bay Bridge, and the Carquinez Bridge which connects Napa County to Contra Costa County.

- Janis Stone and Mick Orton

posted by SFResidence.com @ 8:19 AM 0 comments

Monday, July 10, 2006

ARMs coming to an end... what's next?

A reader asks:

Are creative mortgage products going to create buying opportunities as interest rates rise and peoples ARMS come to the end of their fixed rate term?

Our reply:

Lenders are already coming out with products that have longer amortorization periods which make monthly payments lower and enable buyers to qualify for the loan. There are now 40 year Adjustable Rate Mortgage (ARM) loans and other new products according to Dennis Kowalski at Princeton Financial.

- Mick Orton

posted by SFResidence.com @ 9:06 PM 0 comments

Information about San Francisco's schools

A reader asks:

What are the school systems like in San Francisco? Which are better, public or private?

Our reply:

As in most large cities the quality of the public schools in the system varies greatly. Many of the parents in the wealthier areas of the City send their children to the private schools. These schools are costly but offer smaller classes and more individual attention. If you are planning to send your child to one of these schools start applying early--- like when the child is born!! They are in very high demand. Parochial schools are also highly rated by parents.

A blog has been created to discuss matters pertaining to San Francisco schools. And for more information on which schools are located in different districts you may go to the San Francisco Public Schools website.

Finally, for a rating of which schools are best, got to GreatSchools.net.

- Janis Stone

posted by SFResidence.com @ 8:50 AM 0 comments

Sunday, July 09, 2006

"Budget priced" San Francisco Real Estate?

A reader asks:

Are there any "lesser known" areas where you can live with decent views of the Bay, easy access to the water and aren't completely tourist ridden for less than a million dollars?

Our reply:

Yes there are areas that fit your requirements, but they are not really "lessor known" areas. There are a number of condominiums, lofts, TIC's (tenancies in common) in the South of Market area, South Beach, and the newly developing 3rd Street corridor. They have or will have some views of the Bay, fairly easy access to the water and sell for under a million dollars. Of course you did not mention the size of the property you wanted or how many bedrooms and baths you were looking for. These details would be large factors in the price.

Most of the areas mentioned above are not usually on the tourist path. However, they can get congested when people are going to baseball games or trying to get to freeway onramps!!

- Janis Stone

posted by SFResidence.com @ 10:11 AM 0 comments

Saturday, July 08, 2006

Explaining the "one inch" rule in San Francisco Real Estate

A reader asks:

Was there a reason for having the "one inch" rule or "no common wall" ordinance when it comes to building homes in San Francisco?

Our reply:

Over the years the building codes for San Francisco have been modified many times as have the zoning laws which also determine what can be built on a lot. So what was able to be built even 20 years ago cannot be built today. I am not aware of the "one inch" rule and a search of the Building Department's database revealed nothing.

Several years ago we demolished a property and built a new one in San Francisco's Noe Valley. In this case we were able to build to the lot line. But practically speaking we had to deal with other properties that were built to their lot lines (and they were also leaning onto our lot). As a result, we had to build a slightly smaller home which was only 24 feet 9 inches wide on a 25 foot wide lot!

Actually, there are existing homes in San Francisco that have "common walls". We sold one in lower Pacific Heights, and there was a common wall agreement recorded on the title. That home was built in the late 1800's.

Another common wall development we know of in San Francisco, is what is called a PUD (planned unit development) in the Twin Peaks area.

- Janis Stone



posted by SFResidence.com @ 8:00 AM 0 comments

Friday, July 07, 2006

Standard Realtor's commission percentage in San Francisco

A reader asks:

How much of a percentage do Realtors normally charge as commission in San Francisco?

Our reply:

Commissions are negiotiable and the is no "normal" rate. In today's open market there are any number of choices for a seller.

There are those who have a nominal flat fee and only put the property in the MLS but do not help the seller negiotiate or find a qualified buyer. However, as in most businesses, "you get what you pay for".

If you want to receive the most "net" from the sale of your property a good, experienced Realtor can be worth much more than the commission they earn. For example, in a survey by the National Association of Realtors it was discovered that For Sale by Owners receive 16% less than owners who used a Realtor. So with a 6% commission paid to the agent, the seller would still be ahead by 10%! And if that agent was a skilled negiotiator the seller could be ahead even more.

Experience is so important in any market but in a changing market it can mean the difference between selling the property or having it sit on the market losing value. Although do not believe in a gloom and doom scenario, the San Francisco Real Estate market has begun to change. (Refer to our previous article on June 16, 2006. We also publish a weekly report of market conditions from Avram Goldman, President of Coldwell Banker, San Francisco Bay Area on our website.) Choosing the right broker can not only make the process easier but also more profitable for the seller.

If a selling agent looks in the MLS they will observe that the "cooperative selling commission" is between 2.5-3%. The commission paid to the listing broker is normally the same amount but it does vary depending on the agreement between the listing broker and the seller.

- Janis Stone

posted by SFResidence.com @ 8:49 AM 1 comments

Thursday, July 06, 2006

San Francisco Real Estate Market Update for 6/19 - 6/25/06

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

"The week of June19-25th showed a bit of an upswing. Although the market is not moving anywhere near the velocity of last year, the best priced and staged homes are selling in historically short periods of time. Yes, more homes are available than we have seen since 2003, but are nowhere near the slow cycles of the early 80’s and 90’s.

"We are seeing fewer multiple offers around the Bay with the exception of the SF/Peninsula where percentages run from 20-75% of listings sold being involved in multiple offers. We are still having shortages of good listings in the SF/Peninsula market under the $1-1.5 mil. price range and the upper ends of those markets still are moving where there are shortages of available listings.

"Open house activity is slowing, particularly for the listings that are being held open for the 3rd or 4th times. Well priced and prepared homes being held open for the first time are attracting large groups of buyers. There are still plenty of buyers looking; they are just taking longer to make their decisions. The volume of price reductions has increased as motivated sellers are trying to find buyer price points. I am attaching an article from the Wall Street Journal discussing the advantages of different pricing and reduction strategies.

"What we are noticing is that the flow of new listings coming on the market is beginning to slow. I think over the next several months we will see those sellers that don’t have a compelling reason to sell taking their homes off the market. This will be a positive sign for the market as it will accurately reflect the true inventory available. Now is a great time for buyers as choice is at the highest point in years and interest rates are still under 7% which is historically low.

"Here are the numbers for the week: 14 offices reported increasing inventories, 13 steady and 5 decreasing----8 offices showed increasing activity 19 steady and 5 decreasing."

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 3:44 PM 0 comments

Haight-Ashbury has changed in San Francisco

A reader asks:

As a youngster during the 60's, my family and I visited San Francisco. We were amazed at how the area of Haight-Ashbury was glamorized in the news, yet how run down it was. Has this neighborhood changed much?

Our reply:

The Haight (as it is called today) has changed a great deal from when you visited though local shops still promote remnants of the bygone era like tie-dye tee shirts and psychedelic posters. The San Francisco Chronicle website has a nice profile of what may be found in this neighborhood today.

Previously this area had many large ornate Victorian and Edwardian homes that were allowed to deteriorate when the "hippies" invaded this area in the 60's. There was a lot of drug traffic in the area, and many transients lived in Golden Gate Park, which is adjacent to this area. Much of the detioration of the buildings was caused by communal living. Wikipedia has some more interesting history on the area plus many related links.

More recently, as property values have risen, the Haight is slowly improving. Victorian homes and apartments are being renovated which is causing the property values to rise significantly. Haight Street still has many small businesses, restaurants, coffee shops, and bars which attracts a diverse clientelle. Unfortunately, there is still an element of drug activity and homelessness in the area of the park close to Stanyan street but the City is striving to improve this area. The Haight-Ashbury Neighborhood Council holds regular meetings to discuss topics concerning the neighborhood.

- Janis Stone and Mick Orton

posted by SFResidence.com @ 7:55 AM 0 comments

Wednesday, July 05, 2006

How to pull money out of a property without selling it - Part 3

A reader previously asked:

I want to pull some equity out of my San Francisco property and pay as little as possible in taxes or none at all. Is there a way to do this?

Our answer:

In our first article, we discussed refinancing and private annuity trusts. Our second article talked about reverse exchanges. This third article discusses second loans or lines of credit.

At the time of this writing, the Fed raised interest rates to a 5 year high on June 29, 2006 and are probably going to continue on fears of rising inflation. Back in July of 2005, we published a market report (written by Jay Bransfield) explaining what these rising rates affect and why.

As you probably know, this most affects the short term interest rates for credit cards and, even more importantly, second loans or equity lines of credit on your home. It also affects adjustable rate mortgages. In the short term, seconds loans and lines of credit might be good ways to pull money out of your property, but as a long term solution it can be quite expensive. This might override any advantage you might get from not being taxed on the money.

- Mick Orton, Janis Stone, Jay Bransfield

posted by SFResidence.com @ 8:54 AM 0 comments

Tuesday, July 04, 2006

Explaining the difference between a TIC, a condo and a Co-op for San Francisco Real Estate - Part 3

A reader previously asked:

In San Francisco, I hear a lot of people throw around the terms, tenancy in common, condominium and co-op and often use them to describe the same property in the same sentence. What is the difference between them?

Our answer:

In part 1 we talked about Tenancy in Common. In part 2 we discussed condominiumns. The third and final installment covers Co-ops as a form of ownership. Co-op is short for a Cooperative apartment. Technically speaking the building is owned by a corporation and ownership of each of the individual units is defined by a certain number of shares of stock in the corporation with a proprietary lease to occupy a particular unit. There is usually a requirement that when a unit is sold the buyer must be approved by the Board of Directors of the Co-op. The buyer submits a financial statement and personal and financial references to the co-ops board of directors. The board reviews the information and approves or disapproves the purchaser. Because of this approval process, often the escrow period needs to be longer than for a condominium.

The other difference is the financing of a cooperative apartment. There are only a handful of lenders in San Francisco who will loan on co-ops and of those, some will only loan on certain co-op buildings. The loan-to-value ratio is typically lower than condos and can be as low as 50% but are typically 70-75%. There are still a couple of buildings in San Francisco that do not allow any financing at all so units must be purchased with cash.

Be sure to check on the financing of a building to be sure you can get the financing you need or the loan you want.

- Janis Stone, Mick Orton

posted by SFResidence.com @ 12:40 AM 0 comments

Monday, July 03, 2006

Green housing? What's that???

A reader asks:

I have heard the term green housing. Are these homes becoming more popular?

Our reply:

The term green housing is a relatively new term brought about by environmentalists who promote the use of "earth friendly" and recycled materials in homes as well as ensuring they are energy efficient. It is the latest craze in building technology.

In San Francisco, even the Mayor has gotten into the act. In August of 2005, the San Francisco Chronicle he announced that all new affordable housing projects would promote "high environmental standards". Some of the new features would include solar panels, recycled building materials and so on.

Green construction has gotten very popular lately, especially in California. The US Green Building Council has a website full of information as well as links to other sites providing resources on this topic.

For more information check out BuildingGreen, The EPA website for Green Building, as well as California's green building website.

- Mick Orton

posted by SFResidence.com @ 8:53 AM 0 comments

Sunday, July 02, 2006

San Francisco Real Estate and landfill

A reader asks:

I have heard there are different areas of the city are made of landfill. What are the concerns with buying in these areas?

Our reply:

Entire neighborhoods of the city such as the Marina and Hunters Point sit on man made landfill (made up of mud, sand, and rubble from past earthquakes) were created when flatland became scarce. Unfortunately, such land tends to be unstable during earthquakes. As a result, the liquefaction during earthquakes causes extensive damage to property built upon it, as was evidenced in the Marina district during the 1989 Loma Prieta Earthquake.

In an earlier article (June 19, 2006) we talked about earthquakes, and included a link to the USGS website showing the different areas of the City and the types of soil in each.

When buying a property in areas that are built on landfill it is important to consult with a structural engineer. They will be able to inspect the property and give you their opinion of the structural integrity of your home. Remember that this is usually the largest purchase you will ever make and it is important to understand protential risk in relationship to earthquakes. Your real estate agent should give you a booklet (one of the requriements when we meet with a client) which explains basic structural components of a property which may compromise it's stability in an earthquake and what can be done to retrofit a property to help reinforce it to minimize the damage in an earthquake.

You can purchase earthquake insurance for a home but the deductible can be 15-20%. In the case of a condominium you should see if the homeowner's association has a master policy that includes earthquake insurance. Even if they do, you should also purchase a homeowner's policy to cover your contents.

- Janis Stone

posted by SFResidence.com @ 8:14 AM 0 comments

Saturday, July 01, 2006

Explaining the difference between a TIC, a condo and a Co-op for San Francisco Real Estate - Part 2

A reader previously asked:

In San Francisco, I hear a lot of people throw around the terms, tenancy in common, condominium and co-op and often use them to describe the same property in the same sentence. What is the difference between them?

Our answer:

Hopefully part 1 of this atricle answered the question for you about Tenancy In Common. Now we'll discuss condominiums. Dictionary.com describes a condo as, "A building or complex in which units of property, such as apartments, are owned by individuals and common parts of the property, such as the grounds and building structure, are owned jointly by the unit owners."
With condominiums you own the "airspace" that the condominium occupies. Each unit has its own lot number and map just like a plot of land. The owner owns that "lot" which is the interior space from the exterior walls and a percentage of the common areas which can include the land on which the condos are built, outdoor space, roof, exterior walls, and any common areas defined within the CC&R's or title report. Sometimes this also included a deeded parking space.

The CC&R's are the Covenants, Conditions and Restrictions of the condominium. These documents define the ownership rights and responsibilies of the condominium project. They are specific to each association and are recorded with the deed and are a matter of public record. Every association has its own CC&R's, and it is important that when you are going to buy a condo, you read and review these documents so you make sure can live with the rules since they can be legally enforced. (For example some associations do not allow pets or restrict the type or size of the animal.) There may be also be other rules in addition to the CC&R's.

Condominiums can be financed just like a single family home. However, there are some lenders who will only do loans in condominium buildings with more than 10 units. Others will not loan if too many of the units are rented. And you might have problems getting a good loan is if there is pending litigation in the complex. So check with your lender to be sure.

- Janis Stone

posted by SFResidence.com @ 8:25 AM 0 comments