Condo living has its definite upsides, but it can also involve HOA disputes that you’d rather avoid. I wanted to round up the top ten issues that cause problems among condo owners, courtesy of my attorney friends at Goldstein, Gellman (g3mh):

1. Noise and nuisance. Everyone loves quintessential San Francisco architecture, but let’s face it; Victorians and Edwardians offer their fair share of footfall transmission and conversations through the walls. Set your expectations and get used to the idea that you will hear your neighbors from time to time.

2. Pets. Condo CC&Rs (the document that governs the HOA) specify pet restrictions, which sometimes stipulate keeping pets leashed in the hallways or limiting size/number of dogs and cats. Keep this in mind if you’re thinking of getting a second dog and your CC&Rs limit the number of pets in a unit.

3. Window maintenance. Though the roof of a building is a shared HOA responsibility, owners may have to deal with their unit windows individually.

4. Leaks. Water intrusion from one unit into another does happen from time to time, especially if there are washer/dryers in a building. Who’s responsible for paying for damage can be a huge issue of dispute. Owners and HOAs should have a clear and documented understanding concerning payment responsibilities, the HOA’s right of entry to make repairs, and obligations of owners to carry insurance above and beyond the HOA’s master insurance policy.

5. Improvements and alterations. If the CC&Rs specify that owners need HOA permission for remodeling, that’s the way it goes. It’s not a great idea to try to sneak contractors through the hallways.

6. Unit rentals. If you’re going to rent out your unit, make sure you conform to CC&R rules that may restrict short-term stays. Some HOAs also limit the number of units that owners can rent at a given time.

7. Assessments. Also known as HOA dues, assessments are usually charged on a monthly basis. It’s best to deal with delinquent HOA dues quickly, as collecting payment from a delinquent owner can be a headache.

8. Inadequate reserves. Most larger buildings should have a certain amount of money on reserve in the event of a building issue, such as a roof replacement or paint job. However, many smaller buildings don’t carry large reserves. Though this is reasonable, the pay-as-you-go plan can backfire when a building needs critical work.

9. Use restrictions. This can relate to a wide range of issues, such as maximum occupancy, parking, satellite dishes and noise. There are many laws that may affect the enforceability of use restrictions. For example, California statutes prohibit housing discrimination based on race, color, religion, sex, sexual orientation, and marital status. It’s important that HOAs keep these laws in mind before enforcing a particular use within a condo.

10. “Nonstandard” units. Smaller buildings which start out as rental apartments and later convert to condos may include a unit—such as a penthouse, or detached cottage—that’s very different from the other units. It’s important for CC&Rs to be clear how these different units fit into the HOA, especially where maintenance is involved.

One of my favorite times of the year to represent buyers is now—right after Thanksgiving, and through the end of the year. Though inventory is lighter, buyers are fewer and my clients can usually get good deals.

I’ve been noting at least half a dozen price reductions daily, which means sellers are attempting to be competitive so they can at least get into contract before Christmas. Buyers running around with cash who can close before December 31st are in strong demand, and they can use this advantage to their benefit big time.

I’ll be highlighting what I think are good holiday home shopping opportunities through the rest of the year. And here’s one to kick things off:

This is a 3BR/2BA condo in a two-unit building with parking in Pacific Heights, located at 2238 Divisadero. The unit clocks in at 1800 square feet, and has generous entertainment space, hardwood floors and nice natural light. The living room (above) has a wood-burning fireplace and window seat, and there’s a formal dining room, too. The master suite is located in the rear of the flat and includes a sunroom and seating area. You also get a bonus room down, storage, and direct yard access from the master suite. HOA dues are $250/month.

2238 Divisadero was last sold in 2008 for $1,530,000. It hit the market in the summer for $1,265,000 and has been seeing a steady stream of price reductions since then. The latest chop happened this weekend, with a $250,000 reduction. Current list price is $1,130,000. Yes, this is a short sale, but I wouldn’t let that deter you. (It’s just important to speak with a knowledgeable agent who can give you a very solid idea of what to expect from the process.)

I think this can be a good deal for a holiday shopper! Give me a call if you’d like to see the property.

The feeding frenzy at 949 Hampshire in the Mission in early October wasn’t surprising: A large Victorian project house had just hit the market for $599,000. The property had been in the same family for many years, and was officially ready for its next owners.

The broker tour was overrun with couples eyeballing the possibilities for building sweat equity, alongside contractors taking measurements of various rooms. All the signs for potential value increases were there—large garage, four bedrooms, “good bones.” There was even a stove in the kitchen (above) to help the property pass the appraisal!

The listing office received six offers from three contractors and three “end users” who intended to fix up and live in the property. (The buyer turned out to be one such end user who lives in the neighborhood, according to the listing agent.)

 Hampshire closed last week for $740,000. So in case you’re wondering what you can expect to pay for property of this sort—that’s located somewhat on the outskirts of the Mission—now you know.

You’ve spent three hours surreptiously looking at various real estate Web sites at work and have narrowed down your favorites for this Sunday’s open house tour.

The trouble is, three of those units have HOA dues that are well above what you can afford, and another two have serious pet restrictions.

Knowing the fundamentals about a condo and its HOA can save you time when it comes to targeting your search. I thought I’d put together my Top 5 dealbreakers to help all the buyers out there narrow down their prospects. Because let’s face it, you can only see so many homes between 2:00 and 4:00 on a Sunday:

1. HOA dues. This is a set amount of money paid monthly to the homeowners association. Dues typically help to cover costs such as building insurance, grounds maintenance, water, trash and property management. (They also sometimes cover earthquake insurance, but that’s another story.) The more amenities a building provides, the higher your dues will be. A South Beach high-rise with a fitness center, pool, and 24-hour doorman, for example, will have far higher HOA dues than that four-unit NOPA Edwardian. Read the fine print, and if the dues exceed your budget, move on to the next property.

2. Pet restrictions. I’ve lately come across some interesting pet limitations while searching for properties for my clients. One Pacific Heights condo building I checked out has a no-pets policy, another building in which I had a listing recently had a no-dogs policy. The most common pet policy in the San Francisco condo world is a two-dog or two-cat maximum. But you will often find weight restrictions, and in some cases, breed restrictions. So if you’re looking for a condo where you can live with your two Labs, make sure you don’t hit the buildings that prohibit them.

3. Rental restrictions. You may be intending to live in your condo for several years, but you might also eventually need a bigger space. And you may want to rent out that smaller home for additional income down the line. If that option is a must, it’s good to know up front whether there are any restrictions on renting your unit. One Nob Hill property that I visited for an investor client imposed a limit on the number of units that could be rented at one time; my client ended up passing because the ability to rent wasn’t a guarantee.

4. Outdoor space. If you absolutely need a garden or at least a deck, make sure the listing photos include a yard and specify that it’s shared. Outdoor space of any kind in a condo is a real selling point, and listing agents usually don’t miss the opportunity to show it if their condo has it.

5. Parking. Yes, the listing details note that parking is included. But is it deeded—or leased a block away for $300/month? Or is the parking tandem, meaning you’ll have to move your neighbor’s car out of the garage on a regular basis? Know your limitations, and if independent parking isn’t negotiable, skip the condos that specify anything less than that.

I’m proud to announce that my company, Zephyr Real Estate, has developed its own iPhone app. The Zephyr Real Estate Search rocks, letting you easily find all available properties for sale in San Francisco with an MLS-powered search.

It’s the only app that allows you to search by specific neighborhood in San Francisco, rather than just by zip code.  You can also search for homes near you, or set your own search criteria via the power of GPS. You’ll be able to see full details on every property, including full-screen photo viewer, detailed description and property features. You can also filter searches by neighborhood, bedrooms, bathrooms, parking, property type, price and more.

And if you create a MyZephyr account, you’ll get access to even more cool tools:

• See additional properties that are not available on public websites
• Search pending and sold properties
• Save searches and favorites
• Rate properties and make notes
• Share properties with friends and family via email or on Facebook
• Receive new listing and price reduction email alerts
• Create a custom multi-property driving tour with our exclusive Home Tour tool – perfect for planning your tour of Sunday open houses
• Your account is fully synchronized with your MyZephyr website account, so you can access all the same saved searches, favorites and notes whether using our app or logged on to the Web site.

So check it out and add some zing to your property searches!

If you’re intending to purchase a property in the next several months, it’s important to note what documentation you’ll need to provide to the lender in order to get loan approval.

Many prospective buyers cringe at the thought of pulling together reams of receipts, paystubs, and W-2s. But if you start doing that now, you’ll be ready to go in the event you stumble upon that perfect condo in  South Beach.

Here’s the list of documentation you will generally need in order to verify a home loan application, courtesy of my friends at Guarantee Mortgage:

1. Two most recent paystubs

2. W-2s for 2009-2010

3. Two most recent statements for all checking, savings, CD, money market and/or securities brokerage accounts

4. Most recent statement for all retirement accounts (IRAs, SEP-IRAs, 401ks)

5. Most recent statement of stock options, employee stock option purchase plans, etc. if part of the down payment or closing costs of a purchase

6. 2009-2010 1040s (federal tax returns, all pages)

7. Mortgage, real estate tax and insurance premium statements for all properties currently owned

8. Leases on all rental properties you may own

9. Divorce decree and settlement statement, if applicable

10. Name, address and phone number for your landlord covering past 24 months

11. Twelve most recent cancelled rent payment checks or bank statements if your landlord is a private party

12. Copy of your state-issued driver’s license or passport and your date of birth

13. Copy of current mortgage statements on all outstanding mortgages.

So I had clients who stopped in at an open house I recommended they see over the weekend in the Lake neighborhood. They were interested in one of the units in a two-unit building that was pretty great. The building had a nice floor plan, was located on a lovely stretch of Lake Street and parking was included. The garden was cute and private. They basically liked everything about it—except the bee hives in the yard next door (see above).

In a city as dense as San Francisco, it’s so important for buyers and sellers to consider the “neighbor factor.” In the case of the aforementioned building, the presence of multiple bee boxes in what appeared to be a not very well-maintained yard next door was essentially a deal breaker for my buyers. Though the bees probably stick to their hives, my clients were concerned with their future children being in close proximity to the swarms. And I have to say that I can’t blame them. We live in an urban area, and what one’s neighbors do (or don’t do) has a definite affect on surrounding properties.

I remember previewing a property in the Mission a few years ago and seeing an ATM machine strewn on the ground in the yard next door. And there was also the time I checked out a property in Noe Valley with an apartment building across the yard that featured a naked man wandering around inside his unit. Another time, my clients and I were touring a home in Sunnyside and the adjacent yard was covered in dog feces. Not what you want nearby when you’re having guests over for a barbecue.

My point is that buyers and sellers have to be realistic about what’s going on around properties in which they’re interested, or which they’re selling. Buyers should get a sense for whether they’re comfortable with whatever might be present in the yards nearby, as well as the overall condition of the surrounding homes. And sellers need to recognize that negative situations like the ones I’m mentioning can certainly have an affect on the price they can command for their home once it’s on the market.

As for the bees? If you’re looking for a great home in the Lake area that also might offer you the possibility of getting to know your neighbors and having a regular source of local honey, give me a call. I’ve got an excellent home for you!

Tenancy-in-commons (TICs) aren’t always the most straightforward of property types. I get regular inquiries from confused home seekers who’ve come across a large remodeled flat in, say, NoPa, that seems like a good deal. And it might be. But it’s not a condo, it’s a TIC. And there are big differences between condos and TICs.

TICs are very unique to San Francisco, and many home buyers new to San Francisco–as well as locals who are tired of paying rent–could always use a quick refresher on the basics. In conjunction with Sterling Bank & Trust, I’ll be hosting The TIC Workshop next month. We’ll cover the pros and cons of TIC ownership, what fractional loans are all about, and what you can expect in today’s TIC market. And yes, we’ll definitely be discussing the value difference between TICs and condos.

By the time you leave our workshop, you’ll have a good idea as to whether a TIC is truly an option for you.

Here are the deets:

DATE    Tuesday, October 18

TIME     7:00-8:30PM

PLACE   Sterling Bank & Trust, 2122 Market Street at Church

We’ll serve light refreshments, too.

Please email me at ebermingham@zephyrsf.com or call me at 415.823.4656 if you’d like to attend, and we’ll reserve a space for you. We honestly have a limited amount of chairs, so if you’re interested in being there, please call sooner rather than later.

And if you can’t attend but would like to hash out TIC details on a one-on-one basis, give me a shout and I’d be happy to schedule a meeting at my office with you.

The tenancy-in-common (TIC) market in San Francisco has seen its share of ups and downs. I’m happy to say that this market is alive and well—and actually thriving—despite economic uncertainty.

That’s because the rise of fractional loans has enabled buyers to purchase a building together without having to be on the same loan. The latter has always been the inherent huge risk in a TIC situation. The goal of purchasing an interest in a 3+ unit building was always that of converting the building to condos down the line. However, given the constraints of doing so, buyers have given up on that goal. They’ve been happy purchasing a TIC that will provide more space than a condo can offer in a central neighborhood in the city. And they can live without the threat of losing their building in the event one of their TIC partners on the group loan experiences financial hardship.

A total of 198 TIC interests sold from January-July 2011, at an average of $696,622. The least expensive unit was a tenant-occupied, 1BR/1BA garden TIC in a three-unit building in Lone Mountain that changed hands for all cash at $115,000. At the other end of the spectrum was the 4BR/3.5BA two-level townhouse in a five-unit building with massive views in Pacific Heights that sold for $3,185,303. So clearly, even buyers on the high end are realizing that purchasing a TIC may get them the space and location they need.

There are currently 125 available TICs on the market, and about 59 in contract. Most involve fractional loans, and the market for TICs with group loans is not a very popular one. Again, economic uncertainties are giving buyers pause when it comes to stepping into a group loan. As a result, existing TIC groups are attempting to refinance into fractional loans if they can afford to do so.

The most popular neighborhoods for TICs year to date have been Nob, Russian and Telegraph Hills; Noe and Eureka Valleys; NoPa; Pacific Heights and the Mission. These neighborhoods have many multi-unit buildings and continue to be the most likely bets for TIC inventory. They’re also some of the most desirable areas in San Francisco, which is a plus for buyers who want proximity to public transportation, shops, cafes, and parks.

The fractional loan market is pretty much run by Sterling Bank and NCB. So you don’t have your pick of lenders. The good news, however, is that fractional loan interest rates are much lower than they were a year ago (6-7%). For example, a five-year ARM with 25% down will likely let you attain a 5.25% interest rate. Yes, fractional loans require at least 20-30% down, substantial cash reserves, good credit scores and are only available in three-, five- and seven-year ARM flavors.

TICs have generally been anywhere from 10-20% less expensive than condos, but that can vary depending on the number of units in the building. For example, a two-unit property really does stand a chance at condo converting fairly quickly in two to three years. But 3+ unit buildings require a very different, very time-consuming path to condo conversion. As a result, you’ll see more of a discount. (And note that Sterling only lends on buildings with a max of 15 units.)

TICs aren’t for everyone, and I typically sit down with my clients and discuss the ins and outs before they even bother with fractional loan preapproval. I’ll also be giving a TIC seminar in September in conjunction with Sterling Bank, so stay tuned for that info. And don’t hesitate to contact me if you’d like to attend. I can follow up with the date and time.

Many buyers in San Francisco either shy away from short sales because they seem too complicated, or gravitate toward them with the goal of getting a good deal. The reality is that short sales can be lengthy, disappointing, and simply facilitate the bank getting market rate for a property.

But properties being sold through short sales can sometimes be decent deals. Lenders want to minimize their losses, but they’re not going to get emotionally involved. So they will typically settle on a price that reasonably appears to be market value—but can sometimes be less than market value, which is good for buyers.

Determining whether you should move ahead with an offer on a short sale property largely depends on many factors. But the biggest one of all is whether the sale has already been approved at a particular price. Take 1885 Jackson #403 (above), for example. The 2BR/2BA Pacific Heights condo with one-car parking was listed in way back in August 2010 for $599,000. It’s seen three price reductions since then, and finally went into contract recently. However, the buyer was not able to obtain financing, so the property came back on the market at the approved short sale price of $425,000. This means the lender had agreed to accept that price, and the next buyer will not have to deal with the long approval waiting time for which short sales are notorious.

In the case of Jackson, the buyer is being asked to pay $15,000 to cover charges and fees that the lender won’t approve. And they’re looking for a cash buyer. But at this price, the unit would make a first-time home buyer very happy, or an investor who could use the property as a rental unit.

So keep your eyes open for approved short sales; they may represent good deals, without the wait.