5 Ways to Avoid Home-Buying Closing Delays

Contract timelines are always tight in the current San Francisco market. That means that buyers are typically removing appraisal and loan approval contingencies within days of having offers accepted. If you’re not prepared to jump on the fast track to completing your purchase, drama can ensue.

Here are five ways to avoid major closing delays, courtesy of my colleagues at Guarantee Mortgage who presented at our Zephyr sales meeting this week:
1. Be ready to pay for your appraisal. In order to meet a fast appraisal approval turnaround, the lender has to order the appraisal immediately. You should be sufficiently committed to the property to pay for your appraisal within the first day of offer acceptance.

2. Don’t switch your bank accounts around. The lender will typically require re-verification of all money you wire into escrow for your cash balance. If that money is suddenly coming from an account previously undisclosed during your preapproval period, the lender will demand that you provide documentation for that account. The statements will then have to be resubmitted and reviewed by underwriting while time is ticking.

3. Make sure your cash balance is liquid and ready to be transferred to the escrow account. The lender will want to see that the balance of your down payment and closing costs have been wired into the escrow account prior to funding the loan. Best strategy? Wire in that cash balance a few days prior to close of escrow to ensure that your loan funds on time.

4. Watch the AMEX charges. Lenders are picky about American Express credit card balances. If you have a high balance on your AMEX, a lender may want to see proof that you have the money to pay off that balance in full. This proof of funds should be separate from the funds you’ll need to pay your cash balance and any reserves required.

5. Lock in your homeowners insurance early. You should select your home insurance policy no later than a week prior to signing your loan documents. The latter are usually issued about a week ahead of the closing date.

SF Market Shows Signs of Stabilizing

The San Francisco real estate market is actually showing signs of stabilizing. That means we’re starting to see fewer offers on properties, fewer extreme overbidding situations, and buyers having offers accepted that—dare we say it?—have contingencies.

For those of us working in the field, networking with our colleagues and representing buyers and sellers in very recent transactions, it’s pretty obvious that things are calming down a bit. Our sales meetings in the first few months of the year were filled with reports on eight, ten or 15+ offer situations. Now it’s more like three or four. My clients are purchasing a condo in Bernal Heights, and their contract had the full appraisal, loan and inspection contingencies.

A look at single-family home and condo sales through June 25th reveals sales prices of only 7.5% above list price on average for condos, and 12% for houses. Of course, there are the usual hotspots (Mission and NoPa condos, Bernal and Noe Valley houses) where buyers are still recklessly throwing money around (see 334 Winfield, pictured above, listed for $1,295,000 and just closed for $1,765,000 in an all-cash transaction). But in the rest of the city, properties are not selling for way, way over the list price.

But let me be clear: Prices are not declining in San Francisco. Single-family homes sold for an average of $1,648,329 in June, and the average condo price was $1,175,558. If you’ve made a purchase or will do so in 2014, it means you’re at peace with what the market demands right now. And if you’re planning to buy between now and the end of the year, I believe that the summer will be the sweet spot due to less competition among vacationing buyers.

What You Need To Know About Gift Funds

It’s no secret that the cost of real estate in San Francisco is high. Many first-time home buyers are turning to family—specifically, to their parents—for a little extra help. If you’re considering making a purchase that will partially rely on what are called “gift funds,” here’s what you need to know, courtesy of my colleague Gordon Friedman of Mortgage Service Professionals:

- The funds must be for a primary residence or second home (not for an investment property)
- The gift must be from a parent, relative, domestic partner, spouse or fiance
- A gift letter is required, which must state the gift amount, property address, date given/to be given, and donor address. The letter also must state that no repayment will be required
- Buyer must have 20% or more in down payment, though the entire down payment can be a gift
- If the buyer has less than 20% down, there will be a 5% borrower contribution required
- For a jumbo loan (more than $625,500), a 5% borrower contribution is required regardless of the down payment.

Parents may co-sign to help their child qualify for financing. Their role in the transaction is as a “non-occupant co-borrower.” They will be on the loan and title, but will not live in the property. Here are the ground rules:
- Parents’ income is combined with son or daughter (and spouse if married) for qualification
- Parents’ debts must be considered
- A loan will only be available from lenders that underwrite to Freddie Mac conforming loan guidelines (not Fannie Mae)
- There’s limited availability among jumbo lenders
- Parents’ contribution towards down payment is not a gift since they will be on the loan

If you’ll be using gift money in your purchase, it’s important to let your lender know during the preapproval stage so there are no surprises.

Inside Hayes Valley’s 8 Octavia

I previewed 8 Octavia, the new 47-unit condo development designed by iconic architect Stanley Saitowitz that sits at the corner of Octavia Boulevard and Market Street.

The distinctive feature of the property is the green-colored “curtain” that’s actually a louver system. Owners can press a button in their condo and open or close the louvers, so cancel those plans for window treatments. (No word yet on how expensive the louver system will be over time when it comes to maintaining and repairing it.) Saitowitz calls 8 Octavia a “breathable building,” and I’m sure the louvers are the reason for that.

Most of the condos will have one or two bedrooms, and there are a few junior one bedrooms, as well as larger three bedrooms. Finishes include concrete ceilings, Austrian-imported oak floors, Bosch ranges and dishwashers, Liebherr refrigerators, and corian counters.

#302 has been set up as the model. You open the door to the unit and there’s a walkway that leads to the actual front door of this two bedroom/two bath:


The bathrooms are located all along the hall, opposite the bedrooms. You need to be ok with having closet-like bathrooms with translucent doors.

Potential starting price point for two bedrooms with parking is $1.2M (and around $1M without parking).

I also looked at #303, a junior one bedroom with about 726 square feet that will probably be priced in the high $700,000s:
The sleeping area is just behind the kitchen, and doesn’t have any windows.

#806 is the largest of the two bedrooms, with about 1225 square feet on two levels. It has north and west exposure, and nice views. Pricing is tentatively in the $1.5M-$1.6M range:


I do like the way they’ve incorporated private “outdoor” patio space by placing it just outside the unit—there’s one door to get you into the patio and the next door provides access to the actual condo. Here’s a look at private space for #504, a two bedroom that may be priced at around $1.3M:

Building features will include a rooftop terrace with city views, jewel-box viewing garden in the lobby, keyless entry system and yes, a virtual doorman. Let’s not forget the Nest Thermostats, as well as synchronous, 200 Mbps internet service.

8 Octavia is situated in a busy location, with cars running up and down multiple lanes of traffic to and from 101. But what I liked about the building was that you feel a bit removed from all the activity once you’re inside. In terms of convenience, the building scores a perfect 10, as it’s right near Muni on Market, and literally adjacent to the 101 on/off ramps. You can cross Octavia Boulevard—vastly improved over the past few years—and walk to Whole Foods and the Castro, or head in the other direction and be in Hayes Valley in minutes.

Feel free to contact me to schedule a showing if you’re interested! I’m at 415.823.4656 / ebermingham@zephyrsf.com

Spotlight on the Mission, Sunday Streets & Latest Sales!

Developers are heading east in the Mission, because let’s face it: There are only so many lots available on Valencia for condo buildings. The latest project to arrive is 1515 at 15th and South Van Ness. The current Zephyr Market Tracker looks at the details. And if new construction isn’t your thing, we profile some current Mission offerings that might interest you.

Plus, the deets on Sunday Streets, and all the latest market stats. It’s all here in the Zephyr Market Tracker!

All Deeds Must Record At Same Time for Condo Conversion

As the current crop of TICs converts to condos, I’m seeing many owners listing their TIC interests prior to the actual condo conversion of the entire building. This means the buyer is expected to step in at the tail end of the condo conversion and work with all existing owners as they refinance and everyone completes the conversion process.

In other words, whether there’s a group loan or fractional financing in place, all new condo deeds have to record simultaneously. If there is one owner in the group who doesn’t have a loan, that owner needs to wait until everyone’s refinancing/new purchases are completed prior to obtaining a condo deed.

This is a very important fact to know when you’re getting ready to sell your TIC interest as a condo. It’s critical to communicate with TIC partners so everyone is on the same page about all owners’ refinancing or sale plans. You’re all in this together until the condo conversion is complete, and no one can record a condo deed any earlier or later than anyone else.

If you’re a TIC owner on the verge of condo conversion and you’re aiming to sell before your conversion is complete, make sure your TIC partners know of your plans. One of them may also be planning to sell within the same timeframe, and it’s most advantageous to go on the market at the same time. It won’t do anyone any good if one owner has a buyer in place and then discovers that another TIC partner is going on the market two weeks later. That sequence of events will only delay the first sale, and the lack of coordination could actually kill both sales if buyers grow impatient.

And if you’re a buyer, make sure you receive a deed that clearly states the unit is a condo. You’ll have a new lot number, and you will not be sharing title with anyone else.

1645 Pacific: Old World Design with a Modern Touch

The brand new, 39-unit condo project at 1645 Pacific is officially one of my favorite new developments on the market. I toured the building this week and was impressed with developer Grosvenor America’s and Richard Beard and BAR Architect’s efforts to construct a building inspired by the old world design that’s pervasive among many homes in Pacific Heights, Russian and Nob Hills.

The nice thing about the building is that it doesn’t look like it was transplanted from SoMa, and fits in with the neighborhood’s character. From the sculptures that adorn the facade, to wrought-iron balcony rails and pre-war design elements, 1645 Pacific looks as if there was some real thought put into the overall design. The lobby has high ceilings and grand chandeliers, and all floors are serviced by an elevator. There will also be a concierge/doorman, secured bike storage, a car-sharing service and common rooftop terrace with sweeping views.

You can choose from two bedrooms, two bedrooms with den, junior one bedrooms and two penthouses. The condos are well appointed, with nice touches like crown and base molding, high ceilings, marble flooring/countertops. The sales office is set up in #1B ($1,485,000), which is a two bedroom with a den and semi-open kitchen. The best part about #1B is that its dining/living area fronts onto an extremely large patio. And a huge mural done by well-known Bay Area artist Zio Ziegler runs the length of the adjacent building, so residents on all floors have a front-row seat for the mural:

#5G ($2,265,000) faces northeast and has two bedrooms, two and a half baths, den, and an open kitchen with a large dining area. This unit has a great view of the Bay and city. The second bedroom is on the small side, but the master can accommodate a queen bed pretty easily. The unit is about 1,661 square feet. Your private deck gets you closer to the facade sculpture of a woman:

#5B ($1,520,000) offers two bedrooms and two bathrooms, along with a den. The unit overlooks the mural/patios below. The kitchen isn’t as open, but has good cabinet space:

And finally, I checked out #2C ($735,000) which faces south and has a bedroom area separated by a sliding door that adjoins the living area. Though this unit didn’t have as much light as some of the others, the floor plan was fine.

Here’s the lineup of currently available units, with their prices, square footage, and approximate price per square foot:
5A $1,175,000 1,003 sq ft ($1,171 per sq ft)
1B $1,485,000 1,228 ($1,209)
2D $1,525,000 1,399 ($1,090)
6D $1,750,000 1,402 ($1,248)
5E $2,045,000 1,553 ($1,317)
5F $1,975,000 1,458 ($1,355)
5G $2,265,000 1,661 ($1,364)
6F $3,150,000 1,735 ($1,816)
1C $795,000 613 ($1,297)
2C $735,000 613 ($1,199)

Parking is included with these prices; however, it is optional. They’re valuing parking at $80,000/space.

1645 Pacific is located between Polk and Van Ness, so you’re about half a block from everything on Polk Street, as well as near the public transportation on Van Ness. This is also a good location for downtown commuters who may want to walk to work.

Offers for the above units will be taken starting on June 12th. So if you’re interested in scheduling a showing, please give me a call at 415.823.4656!

1645 Pacific is situated between Polk and Van Ness. So you can walk out your door and literally be steps from all the restaurants, services and cafes on Polk, as well as public transportation on Van Ness.

Inventory for Every Price Point in Bernal

The Bernal Heights market is experiencing a jolt of inventory, and not just in $1M+ dollar single-family houses. There’s something for everyone, and I wanted to point out some of my favorites. Whether you’re looking to spend up to $500,000 or $2M, here are some good choices in prime neighborhood locations:

515 Eugenia
1BR/1BA, no pkg
515 Eugenia is one TIC interest in a newly renovated, three-unit property at the corner of Bonview and Eugenia. This is a great location because it’s only a block to Cortland, as well as a few short blocks to Mission Street and its public transportation. 515 Eugenia is small, but well appointed. The kitchen is a good size and has reasonable counter and cabinet space, and there’s shared laundry and exclusive storage. The unit is located over the two-car garage, so this may not work if you’re sensitive to the noise of garage doors opening when your fellow building owners are coming and going. But overall, 515 Eugenia is a good package for this price point. (Also available are 199 Bonview #A, the other 1BR unit listed for $495,000, and the two-story main house unit at 199 Bonview for $995,000.)

149 Wool
1-2BR/1BA, 1 pkg
149 Wool has a flexible floor plan, with the option of having one bedroom and a formal living room up front, or two bedrooms and a kitchen/living/dining area at the rear. Either way, it’s good space that leads out to a deck and yard and also has a nicely renovated bathroom. The foundation is newer, and storage is included.

308 Anderson
Single-Family Home
3BR/2BA, 2 pkg
If you love SoMa-style architecture but want to be in more of a neighborhood environment, 308 Anderson is a great bet. Two stacked cubes offer a narrow but spacious interior across two levels. And it’s a house, so there are no HOA dues, CC&Rs or any other restrictions. There’s no yard, but there are a couple outdoor balconies.

98 Anderson
Single-Family Home
3BR/2BA, pkg
98 Anderson is a detached Victorian that features a main living area with excellent flow that leads out to a glass-enclosed deck and protected, private garden. There’s a front room that can be used as a bedroom (though it doesn’t have a closet). Upstairs are two large bedrooms and two bathrooms, and there is a bit of expansion potential on the garage level. This house has a great corner presence and has views from just about every window.

Just Sold: Corona Heights Condo

2442_15thSt Outlook
I just sold my listing at 2442 15th Street in desirable Corona Heights. The large rear bedroom had the lovely outlook above, and was situated on a tree-lined street adjacent to tennis courts. And it was only a couple blocks to Duboce Triangle and Castro services and public transportation.

List price was $649,000, and we closed for $680,000.