Just Sold: 2BR/2BA Mission Dolores Condo

Like the other 11 buyers who wrote offers on 130 Landers #C in Mission Dolores, my client was wowed by the spacious, two-level floor plan with a private deck just off the living room. The well-appointed unit features two large bedrooms, a master suite, and formal dining room, along with parking and storage.

Part of the Church Street Gardens development, 130 Landers #C has direct access to the park-like common garden with multiple seating areas, bbq patio, and sauna. It’s a great oasis in the midst of one of San Francisco’s most popular neighborhoods. My client will love living in his new home! List price: $815,000.

10 Reasons Why You Should Buy Title Insurance

One of the most expensive items on your home purchase closing statement is title insurance. If you’re getting a loan, the lender will require a policy on the loan. But you may not be required to purchase a homeowner’s policy. Should you skip it?

In a word, no. The owner’s title policy will protect you against future claims against the property. Though the title company does a search through public records prior to the closing, unexpected things can pop up. Without title insurance, you’re flying without a net.

But it’s easier to make a case for title insurance after you consider the various possible scenarios that can occur. You won’t want to be flying without the title insurance net if one of these things happens. Here are my top 10, courtesy of Chicago Title:

1. A deed or mortgage in the chain of title may have been forged.
2. The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
3. Title transferred by an heir may be subject to a federal estate tax lien.
4. There may be a defect in the recording of a document upon which your title is dependent.
5. Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced “wives” or “husbands.”
6. Someone may claim he or she has an easement over part of your property.
7. Title transferred by an heir may be subject to a federal estate tax lien.
8. The deed is apparently valid, but was actually delivered after the death of grantor or grantee, or without consent of grantor.
9. There may be “mechanics’ lien” claims (securing payment of contractors and material suppliers for improvements) which may attach without recorded notice.
10. Errors in tax records (mailing tax bill to wrong party resulting in tax sale, or crediting payment to wrong property).

You can expect title insurance and escrow fees to be approximately 2% of your purchase price.

Park Lane Raises Bar for Luxury TIC Market

The luxury TIC trend hits a new high with Park Lane at 1100 Sacramento in Nob Hill. About to become the largest and most high-end TIC project in San Francisco, 1100 Sacramento is positioned to be the mother of luxury TICs.

Tenancies-in-common (TICs) have traditionally been purchased by buyers who couldn’t afford condos, and who would assume the risk of sharing a mortgage and title so they could become home owners, preferably in desirable and popular San Francisco neighborhoods.

But TICs have hit luxury proportions in recent years, thanks to the fractional financing that precludes everyone being on the same mortgage. A total of ten TICs have sold for $2M-$3M since 2011 (four for all cash), and that doesn’t include off-market sales. Having this individual unit financing gave TIC owners their own mortgages, which significantly cut down the risk. Buildings with more than six units couldn’t qualify for condo conversion, anyway, so the idea was to pay cash or take on the fractional loan and accept the fact that you’d always own a TIC.

Park Lane flies in the face of tradition. The building is a 12-story apartment building with 33 units, 17 of which are now vacant. Owner Russell Flynn expects the remaining tenants to either purchase their units, or vacate (with the possibility of an Ellis Act looming). He’s renovating all the units now, and the first release of six units will range in price from $2.6M to just under $7M. Flynn projects a sellout of $100M.

Why would a building selling TICs in this price range—including a 4400-sq foot penthouse for $8M-$10M, depending on whether it’s sold finished—appeal to buyers who could obviously afford a less-risky condo?

Park Lane’s big draws are prestige and location. There’s very little inventory in a classic Nob Hill location such as 1100 Sacramento, which is adjacent to the Fairmont and across from the Pacific Union Club. It’s prime real estate, and there’s really no equivalent. Buyers who want that location won’t be satisfied with SoMa’s Millennium or the St. Regis, even if they are condos. If sharing title with their neighbors is what it takes to get in, they’ll do it.

And let’s face it, if your neighbor has the wherewithal to purchase the $3M TIC down the hall from you, the level of risk is probably lower for you as an owner. My guess is that many of the units will be cash sales from buyers who are downsizing from larger homes in the north end of town. In some ways, these buyers will likely view 1100 Sacramento as more of an east-coast style co-op. Though you don’t share title in a co-op, you basically buy shares of the corporation that owns the building. Co-ops are popular in New York, but there are only a few such buildings in San Francisco, and they’re ironically located in the immediate vicinity of Park Lane.

There are reportedly a handful of lenders willing to finance purchases; Sterling Bank is requiring 40-45% down, and interest rates are below 5%.

If Park Lane is successful in selling all 33 units, it will raise the bar for luxury TIC ownership in San Francisco—and undoubtedly encourage building owners in desirable neighborhoods to follow suit.

Where the Cash Buyer Competition Is

If you’re aiming to close on a property in 2013, it’s a good idea to size up the competition and hone your strategy at this point in the year. After all, we only have a couple months left before Thanksgiving (I know!), and inventory slows down right after the turkey leaves the table.

In very thick multiple-offer competition, the biggest wild card will be whether a cash buyer steps into the mix who’s willing to pay top dollar to buy a home. As most real estate fans know, cash sales don’t equal discounts, and cash buyers know that they have to offer a competitive price to win.

So if you’re looking at a hot property in a neighborhood that’s prone to attracting cash buyers, you may be out of luck. For buyers with loans, it’s unfortunately the way it goes: Sellers are looking for a sure thing, and a quick path to their proceeds so they can get on with their lives.

Cash buyers picked up 184 condos/TICs and 98 single-family homes from July 1-September 18, 2013. Where did they appear, and which neighborhoods were hit the hardest?

Eureka Valley, Lower Pacific Heights, Bernal Heights, Portola and Ingleside attracted many single-family home cash buyers in that timeframe, with a majority of the sales prices landing in the $600,000-$1M price range. A total of 18 homes sold above $2M.

On the condo front, neighborhoods such as the Haight, Noe/Eureka Valley; Lower Pacific Heights; Western Addition; Pacific Heights; Nob/Russian Hills; Mission, SoMa/South Beach were the most popular ‘hoods for cash buyers. Sales in the $600,000-$1.2M range were the most common, though there were quite a few sales in the $1.3M-$2M range, and six sales were above $2M.

Word of advice? If you’re looking for a home in the aforementioned neighborhoods and price ranges, and the property you like already has 15 disclosure packages out, it might be a good idea to move on to something else if you aren’t willing to pay top, top dollar and waive contingencies. Buyer burnout becomes quite common at this stage of the year, and a change in strategy is one you might want to discuss with your Realtor if you want to be successful in your house hunt by year’s end.

Marlow 70% Sold Out, Sight Unseen

One of the fastest-selling condo developments has been the 98-unit Marlow at 1788 Clay in Nob Hill, which kicked off sales in the Spring . The building is 70% sold out, according to the sales office, and buyers continue to make purchasing decisions without actually seeing the condos in person. Instead, they’re referencing floor plans and the model in the sales office.

Marlow is one of the rare new developments in the north end of town, so that makes it a popular choice among buyers who are looking for an easy commute downtown or to the North Bay, as well as to 101 via Van Ness. The building is also situated in the heart of the Polk retail corridor, which makes things extremely convenient for residents who want to be able to walk to shops, restaurants and cafes.

So it’s not surprising that buyers are committing to purchases without physically seeing units first. The best condos sell quickly; in this case, higher floors facing north, south & east have been popular.

Interior framing is complete up to the seventh floor, and window installation is almost complete on all floors. Progress is also being made on the courtyard, interior painting, and elevator system.

Nine 1BR condos remain, ranging in price from $725,000-$837,000, and 11 2BRs are available, from $984,000-$1,510,000. In general, you’re looking at just over $1,000/sq foot for the 1BRs, and between $1100-$1200/sq foot for the 2BRs. Parking is included in these prices, though you can knock $40,000 off the price if you don’t want the space.

Give me a shout if you’re interested in exploring your options at Marlow. I’d be happy to negotiate the best deal possible for you.

21 Days & Counting: Hot SF ‘Hoods

San Francisco inventory is typically snapped up within a week in popular neighborhoods. But it may come as a surprise to find that there are many properties that have been on the market for three or more weeks—and are still available.

For buyers who are tired of competing in multiple-offer situations, it’s time to revisit the listings that are taking offers as they come. Today we take a look at three homes in the hot neighborhoods of Bernal, West Portal and Cow Hollow that have been on the market for 21 days or longer:

86 Wool
Bernal Heights

Days on market (DOM): 71
4BR/3.5BA, 1890 sq ft
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List Price: $1,399,000

Purchased as a 2BR/1BA, 1125 square foot home in April 2012 for $801,000, 86 Wool has since undergone a transformation into a 4BR/3.5BA house. The property was on the market in the Spring for $1.5M; that price didn’t work. (Though the house was briefly in contract in July.) Now asking $1.4M, the sellers are hoping there are buyers out there who will appreciate 86 Wool’s renovation and prime Bernal location. As larger and not necessarily renovated homes in the neighborhood have been selling for well above $1.3M, I think 86 Wool could be an opportunity for someone to buy a “done” house without enduring a bloodbath offer situation. Honestly, had the sellers listed the house for $1.2M, it probably would’ve been sold for $1.4M by now.

2428 14th Avenue
West Portal

Days on market (DOM): 55
2 pkg
List Price: $1,249,000

For buyers looking for a large single-family home in proximity to the West Portal retail area, 2428 14th Avenue definitely fits the bill. There are three bedrooms on the main level, a large, remodeled kitchen and two more bedrooms and family room on the garden level. You’d be hard pressed to find a house of this caliber for less than the list price, so serious buyers may want to take a first (or second) look at 14th Avenue.

1853 Filbert
Cow Hollow

Days on market (DOM): 69
2BR/2BA, 1034 sq ft
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List Price: $1,125,000

The main issue with this unit is that the large bedroom is half of the double parlor, and the second bedroom is small. But if you can get past that and utilize the space properly, 1853 Filbert may be a great fit for you. It has a nicely remodeled, eat-in kitchen and a lovely shared patio and landscaped garden. There are six units in the building, and the HOA dues are a reasonable $375/month. First listed for $1,185,000 in June, the price has come down since then. May be time to make a deal, particularly if you’re looking for an excellent Cow Hollow location a block from Union Street.

SF Overbidders Club Welcomes New Members

Our ongoing feature highlighting properties that have sold for 25% or more above list price continues today with three new SF Overbidders Club members. Here’s the latest lineup:

53 States
Corona Heights

List Price: $748,000
Sale Price: $1,135,000
Overbid Amount: 52%
Closed Escrow: 8/28/13

This contractor’s special with odd curb appeal and no garage apparently impressed many buyers, but one stood out with a non-contingent cash offer. Yes, folks, that’s what it takes to earn the right to develop a property in a popular location up the hill from the Castro.

37 Elk
Glen Park

List Price: $949,000
Sale Price: $1,282,000
Overbid Amount: 35%
Closed Escrow: 8/16/13

This detached single-family home overlooking Glen Canyon Park had a remodeled kitchen and bath, two large bedrooms with direct deck access, and a newly remodeled master suite downstairs with an office, laundry area and ample storage. In short, the house has everything three-bedroom buyers are looking for, along with easy access to 280 and BART. 37 Elk last sold for $785,000 in August 2008.

140 Edgehill
Forest Hill Extension

List Price: $895,000
Sale Price: $1,177,000
Overbid Amount: 31.5%
Closed Escrow: 9/6/13

Situated on curvy Edgehill Way, this property has a 5,000 square foot terraced lot and was custom built in 1947. Yes, it was a quirky and dated house, but one buyer was willing to pay 31.5% over the list price. 140 Edgehill last sold in 2004 for $990,000.

NoPa Condo Worth the Compromise

With the average 2BR condo in NoPa at just under $900,000, buyers in price ranges lower than that are considering making compromises in order to attain this location—which leads them to the possibility of a 1BR.

Some really cool 1BR condos hit the market this week listed in the high $600,000s, but my favorite is 1960 Hayes #11. Where have you seen an exclusive-use deck this big (above) for a condo recently?

#11 is not big (approx 700 sq feet). But the deck definitely makes up for the lack of interior space. Plus, you’re on the top floor of a 13-unit building in a great NoPa location, and have two-car parking. The last sale in the building took place earlier this year in March; that was #9, a 1BR/2BA with two-car parking, a much smaller patio, and slightly more square feet. That sold for $700,000.

I think #11 will sell for a lot more than its $679,000 list price, but its amenities may find some buyers trading off that second bedroom for a second parking space and a killer patio.

What You Can Buy: 3BR Houses for $1M

Ah, a three-bedroom single-family home in San Francisco—the holy grail of local real estate.

There are currently 102 such houses on the market as of this writing, at an average list price of $1,206,627. But the good news is that there are plenty of homes available. It’s just a matter of being flexible about what you may need—and which neighborhood you’d like.

I found a trio of cool 3BR houses to consider which are below the citywide list price average, in three very different neighborhoods:
1723 22nd Avenue
Central Sunset

3BR/2BA, 1530 sq feet
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List price: $927,000

This very charming, Marina-style home has good curb appeal, interior 1930s period detail, and upgraded kitchen and baths. There are two bedrooms on the main level, and a third on the garden level. There’s also a large garage and a really sweet yard. 1723 22nd Avenue came on the market on August 21st, and is not selling at its current $927,000 list price. I’m honestly not sure why, other than that buyers are recognizing that the house may be worth around that price and are wary of having to bid higher. If I were interested in the house and neighborhood, I’d schedule a showing and try to take advantage of a market opportunity. Plenty of public transportation nearby, and 19th Avenue puts you on the right track to the Golden Gate Bridge for North Bay commutes.

70 Sheridan

3BR/2BA, 1359 sq ft
2 pkg
List price: $995,000

A house in SoMa? This rarity at 70 Sheridan is perfect for anyone who loves urban living and also would love the privacy that a single-family house can provide. Renovated in 2006, the property is a mashup of 1920s period detail and more contemporary finishes, and has a huge garage. There’s a freestanding shed in the yard, which you may be able to put to good use for something like guest space or a home office. One thing to note: The property is zoned RED (residential enclave district), so you should check with your lender to make sure there won’t be any complications with your loan if you’re purchasing 70 Sheridan as your primary residence.

30 Molimo
Miraloma Park

3BR/2BA, 1970 sq ft
1 pkg
List price: $989,000

30 Molimo is a very gracious, detached home with East Bay views and an updated, eat-in kitchen. Downstairs are the third bedroom, second bath and family room. Molimo is a quick drive to Mollie Stone’s, the West Portal retail area and 280. Warm weather is not Miraloma’s strong point, but what you do get are wide, open tree-lined streets and nice front yards.

Get a Grip on the Cost to Sell in San Francisco

It’s a good time to get familiar with the basic costs involved when you sell your house. Many homeowners have just put their properties on the market, and many more will follow suit between now and Thanksgiving. Having a solid grip on what it will cost you to sell is important as you plan your move.

Here are the primary costs you can expect when you sell your home:
1. Broker commissions. The seller agrees to pay broker commissions, which are typically 5-6% of the sale price. The total amount is split between the listing and buyer broker, with the agents getting paid according to whatever split they’ve arranged with their company. So the commission is divided, ultimately, four ways.

2. Transfer tax. The city and county transfer tax rate is $6.80 per thousand dollars for properties of up to $1M, and $7.50 per thousand dollars for homes that sell between $1M-$5M.

3. Reports and inspections. It is customary for the seller to provide a building permit history ($160) and natural hazard report ($90). Sellers also need to have a water/energy conservation inspection, and have any compliance work done by close of escrow. This cost can range up to $1800, depending on what you need done. (It’s usually a lot less than that for a condo.) You may also want to include a termite report, which gives buyers a heads up on big-ticket items that may end up being negotiable during escrow. Termite reports range from $400-$600 for condos and houses.

4. Prep work and staging. If you’ve been living in the property a while, you’ll probably want to consider painting, doing minor repairs, staging and professional cleaning. Depending on the size of your home and what needs to be done, costs vary. I have a team in place for these activities and personally coordinate getting estimates and having the work done.

I’m currently in the process of signing up listings and coordinating marketing schedules, and would be happy to talk with you about bringing your home on the market this Fall. We can work through all the details and pave a surprisingly quick and easy path to coming on the market. Just contact me at 415.823.4656 or ebermingham@zephyrsf.com.

5 Tips for Surviving the Fall Real Estate Market

It’s officially “after Labor Day,” and that means one thing in the real estate world: Time for new inventory, new buyers and sellers entering the market, lots of sometimes chaotic activity and mostly, a mad scramble to get everything done before the end of the year.

Spring is typically a high point in San Francisco real estate. But it’s been my experience over the past eleven years as an agent that the Fall can be even busier, and also carries with it more of a sense of urgency. This is driven by leases ending in December, or transactions closing by the end of the year for tax purposes, to name a couple motivators.

Sellers have been watching the prices their neighbors have been getting all year, and buyers are starting to lose patience after writing offers on multiple properties for the past eight months. But agents, buyers and sellers need not go off the deep end.

Here are five tips for maintaining sanity between now and New Year’s:
1. If you’re going on the market, stay on the market for at least a few days. You’ve staged your house, moved out and should want to expose that property to as many buyers as possible before taking offers. If you’ve scheduled open houses and a broker tour, commit to having those open houses and tour. This lets buyers and their agents at least take a crack at the purchase, and having an offer date can only benefit you if there’s significant buyer interest. (Incidentally, it’s really annoying to arrive at a broker tour and find a handwritten sign saying that the tour has been deleted.) It is ultimately a very sound idea to also have a backup offer in place when you accept an offer, and it’s hard to do that if you just take the first offer that comes along.

2. If it’s a long shot offer…It probably is a long shot. I define “long shot” as an offer situation wherein there’s overwhelming interest in a very hot property. That extremely appealing, 3BR house in Noe Valley that has it all? You know, the one that’s about 20-40% underpriced? Unless you’re willing to write super high and waive contingencies, you’ll probably be better off avoiding a situation that will chip away at the emotional reserves you’ll need to be successful in your house hunt.

3. If you’re a listing agent, notify buyer agents of offer outcomes promptly. Yes, you and your sellers are thrilled with the eight offers that came in on their property. As the listing agent, you’ve already called the agent representing the buyer with the accepted offer and have given them the good news. But there are seven more agents you need to call before the night is through. Those agents have buyers who probably won’t sleep very soundly until they get word of the outcome.

4. Buyers, update your loan preapproval. You may have been preapproved a couple months ago, but interest rates are up and so are prices. Before you start running to open houses, run some updated numbers to make sure you’re not looking at homes that will be out of your price range.

5. Sellers, plan ahead. When you decide to sell your house, a lot of activities and people are thrown into action. Yes, it’s a seller’s market and everyone will be excited to see your home in Mission Dolores when you list it. But if you’re planning to stage the house, that will typically require some notice, if only for logistical purposes. And there’s no better way to create buzz around a home than to give your listing agent some time to pre-market the property on the MLS and with a house sign. Remember, there will be more inventory with which to compete now, and you don’t want to get lost in the mix.