Just Sold: Noe Valley Victorian Condo

My clients just purchased this quintessential, top-floor Noe Valley 2BR condo in a prime neighborhood location. Featuring wonderful period detail throughout, a formal dining room and private deck with panoramic, south-facing views, 21 Clipper also has parking and a lovely garden. We managed to get past five other buyers who submitted offers, and my clients are thrilled with their new home. And a shout out to the fabulous Patrick Skovran at Wells Fargo for efficiently getting our loan through at the holidays, as well as Charles Richards’ team at Chicago Title. List price: $899,000.

[Please note that we’re taking a Thanksgiving break at Inside San Francisco Real Estate. Have a restful and fun Thanksgiving, and check back in on Monday for more market insights & shenanigans.]

Source Your Funds & Avoid Closing Delays

One of the easiest ways to derail or delay a home purchase is to start pulling in money from undisclosed sources during the escrow process. It is critical these days to document all the sources for your funds with your lender.

Buyers in San Francisco often make home purchases with funds that may be coming from different sources. For example, there may be money coming from a 401K, or a family member who’s helping with the deposit. This is all fine, but the most important thing to recognize is that you need to disclose all fund sources to your lender.

This is because lenders are committed to verifying every dollar the borrower will be using for a down payment, closing costs and reserves, according to my colleagues at Guarantee Mortgage. So if, for example, you are making any non-payroll deposits into accounts that will be used to show sufficient assets for closing, you’ll need to show a paper trail.

If your deposit isn’t coming from one of your own accounts and is instead being wired in by a family member, the lender will need to see a gift letter for that money. The biggest sticking point is when buyers have funds wired into closing from a non-disclosed account. Lenders will want to see two months’ bank statements on such an account.

Best idea? Put your game plan together during your preapproval stage so you and the lender are clear about where all your purchase money is originating.

Diverse Inventory Abounds in San Francisco

San Francisco has some of the most varied housing stock available in the world, from Victorians and urban lofts to Spanish-Mediterranean houses and high-rise condos. In this edition of the Zephyr MarketTracker, we look at some of the currently available offerings.

Interested in kicking off your holiday season a little early? The Treasure Island Holiday Show happens tomorrow and Sunday, and features snow-making activities, shopping, music and food.

We also look at the most recent sales citywide, as well as price averages and other data. It’s all here in the Zephyr MarketTracker!

True To Seasonal Form, Luxury Market Lags

The market for single-family homes and condos in the $2M+ range is already showing signs of annual holiday lag, and it’s not even Thanksgiving yet. A total of 53 houses and 32 condos awaits buyers in this segment of the market.

The houses have been on the market for 74 days or longer, and the condos for 92 days. There may be a few buyers out there who will swoop in between now and the end of 2013 with successful offers, but my bet is that a majority of luxury homes currently available will be greeting the new year in the MLS.

What this means for sellers is that this isn’t the best time to add your property to the luxury home glut unless you are priced very realistically. It’s not the time to test the market or expect buyers to overpay. And buyers should view this time period as an excellent opportunity in which to pick up a great home for perhaps less than they would have paid earlier in the year.

The serious sellers of the bunch will make price reductions, particularly if their home has been on the market for 30 days or longer. Approximately 30% and 31% of the sellers of currently available single-family homes and condos, respectively, have already done price reductions. That means there are quite a few properties out there that may have room to move on price.

I’m a Realtor Seeking Buyer and Seller Clients

Though I spend a lot of time sharing San Francisco market insights on this blog, I am a full-time real estate agent. That may not be obvious sometimes, but what it means is that I earn a living helping people buy and sell residential real estate.

I know many of you are considering making a move in 2014, or you may know friends, family or neighbors who are. That’s where I’d like to come in. If you’ve been reading my blog on a regular basis, you know that I’m a straightforward, knowledgeable professional who’s been a Realtor since 2002. I’ve navigated clients through slow markets, crazy markets and everything in between. I have a strong work ethic, am obsessed with providing excellent service and am always available to talk, email or text when my clients have questions or concerns.

This year is winding down, and I am looking to kick off 2014 by making myself useful to buyers and sellers. Most importantly, I typically consult with people well before they’re actually ready to take action. So don’t hesitate to get in touch. The holidays add an extra dimension to everyone’s busy lives, but this time is also a good month for real estate strategizing.

You can view my most recent sales here, and my Yelp reviews here. My Yelp page also features a video about my business, so check that out if you’d like to put a voice and face to this blogger.

I look forward to hearing from you soon!

Close With Cash Now, Take Out a Loan Later

About a quarter of sales happening in San Francisco are all cash, and I’ve represented my share of cash buyers this year. But it may be a sound financial strategy to take out a mortgage on the property after you close escrow, as my colleagues at Guarantee Mortgage recently pointed out. The process is called “delayed purchase financing.”

There are a few benefits when you do this. Most importantly, if you obtain a mortgage within 90 days of your escrow closing date, you’ll be eligible for the mortgage interest deduction. Additionally, you may want to regain some liquidity and stash the money in investments that have higher returns than what you pay in mortgage interest. And of course, you might also be able to use the funds to purchase another property.

In the end, the interest deductions may be worth thousands of dollars over the life of the loan. So you may want to consider getting preapproved for a loan, even if you do have the cash to make your purchase now.

SF Overbidders Club: 2-Unit Building Edition

San Francisco’s two-unit building market has been quite busy in 2013. No surprises there, such properties—particularly when they’re completely vacant—are excellent options for buyer partners or those who want to owner occupy one unit and rent out the other.

A total of 303 two-unit buildings have sold citywide, year-to-date. And 29% of them were sold in all-cash transactions. Of the 112 such buildings sold from July-November 12, 2013, 66% were sold for more than the list price, which mirrors the selling pattern for single-family homes and condos in San Francisco.

Let’s welcome some new two-unit building owners to the SF Overbidders Club. Remember, you can only gain entry into the club if you pay 25% or more over the list price:

157-159 Collingwood
The Castro

List Price: $1,600,000
Sale Price: $2,125,000
Overbid Amount: 33%
Closed Escrow: 11/6/13

These two spacious, vacant units in a prime Eureka Valley location are exactly what a lot of buyers are looking for. Each unit had an oversized living room, formal dining room, large eat-in kitchen, and original hardwood floors. And the kitchens provided the opportunity to do your own remodeling. There was also a large, unwarranted in-law unit on the main level, as well as a large yard. (But only one parking space.) In the end, the seller received ten offers, five of which were all cash. The winning offer hit it out of the ballpark with a contingency-free contract and cash.

426-28 17th Avenue
Central Richmond

List Price: $899,000
Sale Price: $1,325,000
Overbid Amount: 47%
Closed Escrow: 9/23/13

This is another vacant two-unit building, with one 2BR unit and one 1BR. The property needed work, with broken back stairs and general TLC needed throughout. Kitchens and baths were in their 1950s original condition, too. In walking distance of Gaspare’s Pizza and Aziza on Geary, as well as four blocks north of Golden Gate Park, 426-28 17th Avenue is in a very convenient part of the Richmond.

29-31 Delmar
The Haight

List Price: $1,499,000
Sale Price: $1,988,000
Overbid Amount: 33%
Closed Escrow: 11/7/13

Yet another vacant two-unit building hit the market with a splash, in a popular Haight location. Each flat had 2BRs, split bath, living rooms with bay windows, formal dining rooms, and 1915 period detailing. The large garage had four-car capacity, and there was a landscaped garden. 29-31 Delmar was also sold in an all-cash transaction.

Top 5 Food Neighborhoods in San Francisco

One of the requirements I often hear when talking with home buyers is that they want to be in walking distance or at least a short drive from restaurants. So I’ve put together a list of my top five neighborhoods that offer standout and diverse restaurant choices. Here you go (not listed in any particular order):

1. Hayes Valley. Home to high-profile restaurants such as Rich Table, Boxing Room, Jardiniere, Absinthe, and Zuni, Hayes Valley continues to supply locals with great food. There are also excellent cafes and wine bars like Samovar, La Boulange, and Momi Toby’s Revolution Café and Art Bar. And don’t forget about the variety of brunch/lunch spots, delis, and an endless variety of ethnic restaurants and food stands.

2. The Mission. There’s no disputing the Mission’s prominent standing in the San Francisco food world. The lineup is awesome, and includes mainstays like Delfina, Flour and Water, Farina, Limon, along with “newer” hotspots such as Locanda, Central Kitchen, St. Vincent, and Local’s Corner. Not impressed? Also consider the more casual eateries that include Little Star, Pauline’s Pizza, Pizzeria Delfina, Mission Beach Café, Boogaloos and Pi Bar. And if take-out is your thing, the tons of taquerias or standbys like Old Jerusalem and Good Frikkin’ Chicken will keep you going.

3. South of Market. The blocks are longer and restaurants more spread out. But there’s a heavy concentration of excellent restaurants in SoMa, from Salt House and Benu to Anchor and Hope, RN74, AQ and Ame.

4. Dogpatch. I’m going to go out on a limb here and say that Dogpatch has the best neighborhood-level restaurants around. This area has really developed over the past decade, and restaurants and cafes are proliferating by the month. Some of the best: Piccino, Serpentine, Poquito and Piccolo. There’s also Yield Wine Bar, Kitchenette, Just For You Café, Oralia’s, and who could overlook The Ramp?

5. NoPa. This hot neighborhood boasts NOPA, Bistro Central Parc, Nopalito, Bar Crudo and Papalote Mexican Grill among its top places. More casual places like Candybar for desserts and Herbivore for vegetarian fare round out the offerings.

What You Can Buy in November: 21 Days & Counting

We’re approaching the holidays and I’m starting to see the “days on market” count tick upward for quite a few homes out there right now. This regular feature takes a look at three properties that are way cool but which have been sitting on the market for 21 days or more. What that means for buyers is…no offer date, and less competition. So consider these homes if you’re ready to buy:

374 11th Street #5
South of Market

Days on market (DOM): 33
2BR/2.5BA, 1771 sq ft
1 pkg
List Price: $974,000

374 11th Street #5 is a spacious, three-level loft with great natural light, an office/den, two fireplaces and a private deck. There are a lot of stairs leading up to the unit, but if you can get past that, the property offers excellent space in a hip location that’s on the same block as Bar Agricole and Bergerac. You’re also really close to the Mission, Potrero, Costco (!) and the freeways. Last sold for $900,000 in 2005, the list price does not seem off base to me for the space. And at $550/square foot, it’s actually under the $673 average for 2BR lofts sold in the area since July.

23 Cityview Way
Midtown Terrace

DOM: 37
2 pkg
List Price: $749,000

23 Cityview Way doesn’t have the style and panache of some of the other single-family homes that have sold in the centrally located Midtown Terrace neighborhood. But it also doesn’t have the price tag those properties have carried. The lot is flat and the yard needs a total re-do, but the kitchen and bath have been satisfactorily updated and are certainly in move-in condition. There’s also a large garage and bonus room that would make a nice master suite down the line. The original list price was $789,000, but it was just reduced to $749,000 and now there’s an offer date of November 12th. 23 Cityview was last sold for $840,000 in 2006, but the yard has kind of gone downhill since then and the home could use some TLC. With most homes selling in the neighborhood for well above $749,000, I think Cityview is a good deal for someone.

701 Minnesota #103

DOM: 54
2BR/1BA, 1229 sq ft
1 pkg
List Price: $799,000

Potrero Square is one of the coolest conversion buildings in Dogpatch. Previously a brick and timber distillery, the building was transformed into condos in 1993. Unit 103 features soaring ceilings, exposed brick walls, arched window and two separate sleeping areas. You also get an in-unit washer/dryer and a deeded patio. The common areas have lush gardens and an atrium, which is nice because you walk through them to get to the unit. HOA dues are $428.68. 701 Minnesota is a good option for buyers who want proximity to 280, neighborhood restaurants like Serpentine and Piccino, as well as the Third Street rail to downtown. #103 was initially priced at $849,000, but recently hit the $799,000 mark.

The Pros & Cons of Preemptive Offers

Your agent has just gotten you in to a great two-bedroom condo in Noe Valley before the first open house. You love the property and are ready to make an offer. The listing agent and sellers have set an offer date two weeks from the initial open house. Should you seize the day and submit an offer sooner?

Such a “preemptive offer” is often attempted by a buyer who doesn’t want to compete and would just rather cut to the chase. Though there are benefits to a preemptive offer, there are definitely a few drawbacks. Before you rush out to write that offer, consider these factors:

There’s a good chance you’ll be overpaying. Your preemptive offer has to convince sellers that they won’t get a better deal from someone else. In most cases—particularly in hot neighborhoods where there’s not a ton of inventory—you’ll really have to hit it out of the ballpark on price. However, there are some instances when properties come on the market with list prices that are closer to the expected selling price. In that case, your price will need to be convincing, but your inspection and financing terms will also need to be tight. Most sellers will be hesitant to accept a preemptive offer that’s riddled with lengthy contingency times and an okay price. If you’re planning to pay in cash, that’s a big advantage. But even at that, you’ll need to be strong on price.

Your offer may be shopped around. Once your agent presents an offer to the listing agent, he or she is supposed to discuss the details of that offer with only his or clients. However, there is a chance that agent could talk about your offer with other buyer agents or buyers who have already also expressed interest. (This is not ethical, but I’ve seen it happen.) Suddenly, the playing field is a bit more level, and you’re not in a great position. You may find that a cash buyer is submitting a purchase contract for roughly the same price you offered.

The seller can reject your offer. If the sellers feel that they might be able to get an even higher offer by waiting for an offer date, they may reject your bid. Which means the contents of your offer are “out there” and subject to being potentially shared. Rejection typically means you can expect to up your price on the offer date.

You just might get the property. If your offer is solid and sufficiently high in price, the sellers may give it the thumbs up and you can open your escrow. No waiting around overnight for a response, being countered or put in backup.

Hot New Marina Listings, Hot Sales, Fun SF Sights

The latest Zephyr MarketTracker rounds up the most recent sales, which is always fun. But this edition spotlights a trio of new Marina listings, along with a quick market update. (Prices are still going up—surprise!)

And if you’ve got family or friends visiting this weekend, check out our list of lesser-known tourist attractions (golden fire hydrant at 20th & Church, anyone?) that will steer you away from yet another visit to Fisherman’s Wharf.

It’s all here in this edition of the Zephyr MarketTracker!

Where to Spend Your $3.6M: Clay or Capp?

Let’s say you have roughly $3.6M to spend on a single-family house. Would you spend it on a home in Pacific Heights—or the Mission?

You can’t find two more different neighborhoods, quite honestly. Pacific Heights is synonymous with mansions, Bay views, well-manicured streets, and its popular Fillmore retail strip. At the other end of the spectrum is the Mission, with its edgy feel, hip restaurants and penchant for street activity.

But two homes located in each neighborhood went into contract recently with very similar selling prices, and the question I have for you is: Which was the better buy? Here’s how things shake out:

2586 Clay
Pacific Heights

Built 1900
3-car parking
List Date: 10/18/13
List Price: $2,995,000

2586 Clay last sold for $1,850,000 in June 2009. The current owners extensively renovated and expanded the home, and apparently did everything right, from modernizing the kitchen and opening it up to adding a family room and rear deck. They also added a lower floor with a large media room, master suite and laundry. This is a great location one block from Fillmore and two doors down from Alta Plaza Park. The outcome? The sellers received six offers, and the property is reportedly in contract for $3,670,000.

507 Capp
The Mission

5BR/6BA, 4869 sq ft
Built 1905
3-car pkg
List Date: 9/27/13
List Price: $3.6M

Last purchased in September 2012 for $1,275,000, 507 Capp went into Grand Edwardian renovation mode shortly thereafter. The property was completely transformed and modernized, with three expansive levels. This location is deep in the Mission, and like most blocks in the neighborhood, is a real mixed bag. (Let’s just say that 507 Capp stands out quite a bit in the landscape.) The sale closed yesterday for $3,525,000.

So what’s the better buy? The classic Pac Heights Victorian or the huge Edwardian in the gritty Mission?