San Francisco Real Estate - Residential

San Francisco Real Estate Market Update for 11/27 - 12/3/06

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

"Contrary to newspaper opinion homes are selling. I want to let all of you know my home in Rockridge closed last week. I have a great appreciation and empathy for sellers. I have two realities---one as a realtor and one as a seller. The realtor, like a doctor or other professional works with many patients or clients and selling a home is an everyday on-going experience. For a seller it is an experience that on average occurs every 7 years. In my case, it was 20 years. It was the home we raised our family in. And of course as a seller your home is special---and it is.

"Thought I would share a few observations about my experience. First I would not sell a home without a realtor. Sounds like I am biased. Even as a realtor I wouldn’t list my own home. The experience is filled with too much emotion.

"I was fortunate my home had an offer even before the brokers’ tour or the first open house. I owe this to my realtors letting me know what I needed to do to prepare my home. We had all the inspections up front. Even the termite work was completed before going on the market. They arranged for all the work to be done with gardeners, painters, floor refinishers,stagers etc. We spent close to $40,000. It was worth every penny. The house shone like a jewel. Our home was listed for $1,749,000. At that price level, buyers expect a home to be a jewel.

"Of course as a seller I thought my home should be listed higher. The good news is I listened to my realtors. I took my own advice. Pricing is tricky in today’s market. You need to be competitive. You need to create excitement in the minds of buyers. They know the market and they know value. If they don’t see the value—they just move on.

"This is only the beginning of the story. Next is the offer and negotiation to open escrow. Not necessarily an easy task. In our case, like in most offers, buyers want to see how low you will go. We were no exception. The offer was well under asking. From what I was told the buyer had consulted with a friend who said you should use this tactic. Well it almost lost them the home. Fortunately, my realtor let more reasoned minds prevail. She suggested I counter back a little (a very little) under full asking price. Let’s see if the buyer is truly serious about buying your home. We did as she asked. It worked the buyer accepted our counter. They were serious about buying. If I went with my initial response---why counter at all. We wouldn’t have known if they truly wanted to buy our home. The lesson---always counter---it never hurts you.

"Of course, after we opened escrow another offer came in $70,000 over the first. Where were they two days before? It happened to us when we sold our home 20 years ago. My feeling is still a bird in the hand is worth two in the bush. Obviously they were trying to give us motivation to bump the first offer. After a few days, they weren’t willing to wait. So they weren’t as committed as our first buyer.

"After numerous inspections---and I mean numerous----I was getting the feeling the buyer would be offering us a proposal. Our home was built in 1926, with a 1926 foundation. The buyer, and rightly so was concerned, as he was paying all cash. We were informed of all the expense it would be to bring up to current standards. Are you getting the story? If he thinks I am going to replace the foundation----you know how this thought ends.

"Twenty five days later and on the day the final contingency was to be removed the buyer comes back with an addendum and yes they are asking for a credit back. To be honest it was in the ball park. To counter or to accept that is the question. If we accepted our home is sold. If we counter who knows. I wanted to counter---my wife didn’t. Have you heard this one? Now comes the real negotiations. After a warm discussion with my wife, the decision was made. Yes, you know who won. Our home was sold. After we let our realtors know what we decided. They told us with the extra few dollars we may have received we bought the buyers goodwill, particularly as they were reasonable in their request.

"Our home is now closed. The buyers are delighted and so are we. If it wasn’t for our realtors and my wife we may still have been on the market. I am thankful for both of them. It is a different market than a year ago. I feel we received a fair price for our home. What it showed me is the old expression if an attorney represents themselves they have a fool for a client. In this market a seller more than ever needs an experienced knowledgeable realtor to insure they maximize their equity, but most importantly they close their escrow.

"Now for the market. Inventories continue to decline in most areas. In San Francisco and on the Peninsula November ended a little better than last November. This is primarily due to a dearth of single family homes in a number of neighborhoods. A few other marketplaces that were active last month were San Rafael, Berkeley, Petaluma and Half Moon Bay. The East Bay overall continues to lag the rest of the Bay Area.

"Open house activity is mixed even within in marketplaces. Negotiations continue throughout the escrow period. In some cases homes need several offers before one finally closes escrow. It takes great patience and finesse to insure a successful escrow.

"Most multiple offers are occurring in SF and in San Mateo counties. A home in Eureka Valley in San Francisco listed at $625,000 received 6 offers and went well over full asking price. In San Rafael a home listed at $859,000 garnered 15 offers.

"The overall tempo of the market is holiday steady. Only 6 offices reported decreasing sales activity, although 15 offices reported decreasing inventories. Surprisingly 6 offices showed increasing sales activity.

"It appears the market is close to reaching a state of equilibrium----a market in balance."

- 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 @ 8:16 AM