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The Value of Home Inspections

May 19th, 2016 by Gabrielle Dahms

The Value of Home Inspections

Every home buyer and investor and their competent agent is well­served in adding a home inspection to their due diligence arsenal. It may reveal potential issues and drawbacks the home may have. Note: a home inspection is a visual inspection. No walls get opened etc. But an experienced inspector can provide a very good idea of something an untrained eye would never notice.

In the best case scenario a home inspection confirms the condition of the home. It potentially provides negotiating points, or it can even pinpoint issues that are complete deal breakers.

Although home inspections are visual inspections only, think of them as akin to insurance before committing to what amounts to a large purchase, possibly the largest ever made for many people.

Home inspections can be a contingency in a purchase contract, even in an ‘as­is’purchase. They therefore offer protection for the buyer at a minimal cost, usually around $450. Sellers can benefit by providing a home inspection as part of the disclosures. Knowing the issues their home has can be invaluable. Possible negotiation points arising from an inspection might either no longer apply or be mitigated.

Consult with your real estate agent regarding the home inspections, how best to use them and where to locate qualified and excellent home inspectors today.

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The Escrow Process

May 12th, 2016 by Gabrielle Dahms

escrow process

Title companies are neutral third parties in real estate transactions and they provide escrow services among other services. Part of escrow services include the escrow account through which all real estate transaction‐ related monies flow and handling the closing. Escrow keeps both the funds and the title safe so that funds get disbursed at the right time, all monetary obligations are met, and title gets to the buyer once all obligations on both buyer and seller sides have been satisfied.

Escrow essentially safeguards documents, files them in a timely fashion, and handles transaction paperwork per transaction instructions. Escrow cannot dispense advice to either buyers or sellers. While the consumer can shop for escrow and title services, the list of fees is extensive and often amounts to the same final figure even with different companies. An excellent title company is one that has experience and is responsive and professional.

©SFRE 2016

If you are considering selling property in San Francisco, click to get your free preliminary market analysis. Gabrielle Dahms

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Prop 13 & Its Effects

May 5th, 2016 by Gabrielle Dahms

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Prop 13 has been the basis of the California property tax system since 1978. The proposition essentially freezes future property tax increases or rather caps them at very low increases. The maximum annual increase is capped at 2%.

 

The only time a property can be reassessed to current market value is either through change of ownership (usually the sale of the property) or through completion of new construction.

 

Property taxes under Prop 13 essentially represent an acquisition value­based system, which amounts to the following: property owners who have owned their home since 1978 and the time the proposition passed are paying taxes at 1975 levels plus the annual increases, while owners who purchased their homes in say 1985 are paying property taxes based on the value of their home at that time plus the annual increases, and so on. Anyone who buys a home today pays property taxes based on the current value of the home.

 

This system creates disparities, of course. For one thing, anyone paying property tax at levels dating back 10, 20, 30, or even 40 years disproportionately contributes to needed infrastructure, such as schools. Due to assessments that are not uniform, revenues are often misallocated. However, parcel taxes have provided a way around Prop 13 to fund necessary services.

 

There are other issues, of course. One of the issues is that homeowners who enjoy the lowest tax rates often also are tied to their homes because they cannot afford to replace what they have, to maintain the lifestyle they are used to, or even to pay taxes at current levels. In San Francisco there are a number of homes with a very low tax base where the owners also cannot maintain the home due to demographic and income level changes over many years.

Prop 13 coupled with rent control and various other factors also plays a role in keeping real estate values high, certainly in the San Francisco/Bay Area. That said, it is likely here to stay.

©SFRE December 2016

If you are considering selling property in San Francisco, click to get your free preliminary market analysis. Gabrielle Dahms

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Hiking and Running in San Francisco & the Bay Area

April 28th, 2016 by Gabrielle Dahms

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San Francisco is a city of sights and views, so if you are an active outdoorsy person there are limitless opportunities to take a hike or jog in varied environments ranging from urban sidewalks to lush waterfall greenscapes.

 

You can choose the level of difficulty by taking advantage of San Francisco’s many hills or opting for a more leisurely stroll around one of the many parks. San Francisco is famous for having more green space than any other US city, albeit some of these green spaces have been dwindling of late. For instance, a fair chunk of Presidio trees have been felled for the recent freeway addition and tunnel. Still, there is much to explore in the Presidio and Golden Gate Park. Ocean Beach is a favorite for joggers and surfers alike.

 

San Francisco is also surrounded by other great places for hiking, jogging and running. The Golden Gate National Recreation Area, Mt. Tamalpais, Mt. Diablo, coastal trails to the south as well as San Bruno Mountain and even the Santa Cruz mountains are among them. Books and maps are available for most of these, if you want to dig deeper.

 

Many hiking, jogging and running groups post their events on MeetUp, including the Sierra Club. Yes, loving the outdoors goes hand in hand with organizations which support conservation and environmental efforts.

 

Take a look at the resources below and try them out ­­ then make your own list of favorites.

 

Best SF runs and jogs: http://www.sftodo.com/running­jogging­san­francisco.htmlHighest rated running trails:

Highest rated running trails: http://www.yelp.com/searchfind_desc=Trail+Running&find_loc=San+Francisco%2C+CA

Presidio activities guide: http://www.presidio.gov/activities/Pages/recreation­and­wellness.aspx

Peninsula Trail Running Guide: http://www.trailstompers.com/san­francisco­peninsula­trail­runs.html

Comprehensive running trails: http://www.mapmyrun.com/us/san­francisco­ca/

Races, events and clubs: http://www.sfruns.com/

SF Waterfall hikes: http://www.thebolditalic.com/articles/6745­the­7­best­waterfall­hikes­near­san­francisco

Guided hikes: https://outdooradventureclub.com/day­hiking-trips/?gclid=CjwKEAiAjfq2BRDpmdHmssaW5xsSJABToP4lvSc4c0wRdXm9YuJIBtxrlKbI- segMxkhKF8J9OllYxoCzQDw_wcB#!event­list

 

This list is only a beginning of what’s available to explore in San Francisco and the Bay Area. Enjoy!

New Luxury Condos in San Francisco

April 27th, 2016 by Gabrielle Dahms

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New Luxury Condos in San Francisco

 

The new development luxury condo market is booming in San Francisco. New luxury condos are going

up in SOMA, South Beach, the Mission, in Yerba Buena, Lake Merced, the Market Street corridor

(mostly west of Van Ness), Hayes Valley and Pacific Heights. What’s mentioned here is by no means

the full extent of the development.

 

It seems there are cranes and construction just about everywhere. Demand is high and so are the

prices. As we progress through 2016, we will see many new developments coming to market. Most of

the luxury condos are being pre­marketed and often buildings are sold up to 75 or 80% when the

actual building is still being constructed.

 

While buyers definitely exist and demand still is steady, the sheer amount of luxury condos coming

onto the market affords buyers more choice and decreases the pressure to buy right away.

If you would like regular updates about new construction in San Francisco, please e­mail us.

 

Below are some of the new buildings where units are currently available.

 

Hayes Valley 400 Grove

30­unit building with average per sq. ft. price of $1300

555 Fulton 122­unit building with average per sq ft. price of $1300

Approximately 1/3 sold

 

Pacific Heights The Rockwell 260­unit building with average per sq. ft. price of $1250

This building is on a busy street between Van Ness and Franklin

Over 200 units sold

Potrero Hill       Onyx on the Park

21­unit building with average price per sq ft. price of $1250

90% sold

 

Nob Hill               Park Lane

33­unit building with average per sq ft price of $1400

Right by the Fairmont Hotel

~90% sold

 

©SFRE 2016

If you are considering selling property in San Francisco, click to get your free preliminary market analysis.

If you are considering buying property in San Francisco, please contact us at sfrealestateinc@gmail.com.

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The Role of Title for Sellers & Buyers in Property Transactions

March 31st, 2016 by Gabrielle Dahms

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A good title company generally stands apart through the integrity of the company (read reputation & longevity) and through the company’s ability to pay claims in case they arise. Title companies provide the following services:

  1. Escrow services
  2. Title insurance services
  3. Closing services

Those services allow for smooth transactions, or at least as smooth as complex transactions like real estate can be. Title companies provide all of these services for reasonable fees and are usually the most affordable option for homeowners to close a real estate transaction. The other option is to use an attorney’s services to get this done but that is generally a good deal more expensive. In California it is customary to use a title company.

In San Francisco real estate, escrow often has been opened with a title company the listing agent and/or the sellers have chosen. Although buyers may request to open escrow with a title company of their choosing – which would usually be their agent’s choosing -, most escrows stay with the title company they were opened with. Real estate is a relationship business, after all.

 

©SFRE March 2016

 

If you are considering selling property in San Francisco, click to get your free preliminary market analysis.

If you are considering buying property in San Francisco, please contact us at sfrealestateinc@gmail.com.

The Home Buying Process: How it Works

March 24th, 2016 by Gabrielle Dahms

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The home buying process can be daunting, especially for first time home buyers. Where to start? What are the absolute must-know items?  Many buyers browse the internet for homes they think they can afford. While that can be fun, doing this first is unlikely to produce great results. There are too many missing pieces. For instance, it’s often hard to tell on-line whether the home is for sale now. Market and neighborhood trends are also difficult to assess and tend to be generic at best. That said, home buyers can glean some good information on-line also and will definitely get an overall idea.

Sites like Zillow, Trulia, and Realtor.com appear to be consumer friendly but their algorythms leave much to be desired and they often display inaccurate information. Perhaps that is because these sites make their living from realtor advertising. Whatever the reason, smart consumers connect with a savvy real estate professional sooner or later.

In most market environments it is imperative to work with trustworthy, knowledgeable professionals and to consider the following:

  • A pre-approval from your mortgage professional is essential.
  • Know your price range and your absolute top offer amount.
  • Be ready to move as quickly as possible.
  • Find out what the seller wants and allow your agent to do the work on this.
  • Write an offer with as few contingencies as possible.
  • Make contingency periods as tight and short as possible.
  • Present your best & highest offer amount vs. hoping for the seller to counter your offer and then going higher.
  • Come in with a healthy down payment.
  • Close as quickly as possible.
  • Consider writing an ‘As-Is’ offer.
  • Understand that you may be writing several offers.
  • Maintain the attitude that the perfect property for you is forthcoming.

If you are hoping for a deal or insider information to get you one, that is exceedingly rare in San Francisco and especially in the current market environment.. Even fixers, probates, and REOs (bank-owned properties) generate much competition, thereby increasing prices.

Similarly, buyers who wish to procure FHA or VA funding or government subsidies stand almost no chance to get a property in the San Francisco/Bay Area because those types of financing present too many hurdles to sellers. They are also quite labor- and time-intensive for the buyers and all professionals involved. Most of all, they take time and programs can change or entirely go away in a hurry. Most sellers therefore will not even consider them.

The realtor you work with guides you through the process with skill, helps you understand trends, requirements, timelines, neighborhoods, and the list goes on. Additionally, strategic positioning to succeed in getting the home of your dreams will set you apart.

For additional facts and figures, please feel free to contact us at 415-200-7202.

 

©SFRE March 2016

The Home Buying Process

March 17th, 2016 by Gabrielle Dahms

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The home buying process can be daunting, especially for first time home buyers. Where to start? What are the absolute must-know items?  Many buyers browse the internet for homes they think they can afford. While that can be fun, doing this first is unlikely to produce great results. There are too many missing pieces. For instance, it’s often hard to tell on-line whether the home is for sale now. Market and neighborhood trends are also difficult to assess and tend to be generic at best. That said, home buyers can glean some good information on-line also and will definitely get an overall idea.

Sites like Zillow, Trulia, and Realtor.com appear to be consumer friendly but their algorythms leave much to be desired and they often display inaccurate information. Perhaps that is because these sites make their living from realtor advertising. Whatever the reason, smart consumers connect with a savvy real estate professional sooner or later.

In most market environments it is imperative to work with trustworthy, knowledgeable professionals and to consider the following:

  • A pre-approval from your mortgage professional is essential.
  • Know your price range and your absolute top offer amount.
  • Be ready to move as quickly as possible.
  • Find out what the seller wants and allow your agent to do the work on this.
  • Write an offer with as few contingencies as possible.
  • Make contingency periods as tight and short as possible.
  • Present your best & highest offer amount vs. hoping for the seller to counter your offer and then going higher.
  • Come in with a healthy down payment.
  • Close as quickly as possible.
  • Consider writing an ‘As-Is’ offer.
  • Understand that you may be writing several offers.
  • Maintain the attitude that the perfect property for you is forthcoming.

If you are hoping for a deal or insider information to get you one, that is exceedingly rare in San Francisco and especially in the current market environment.. Even fixers, probates, and REOs (bank-owned properties) generate much competition, thereby increasing prices.

Similarly, buyers who wish to procure FHA or VA funding or government subsidies stand almost no chance to get a property in the San Francisco/Bay Area because those types of financing present too many hurdles to sellers. They are also quite labor- and time-intensive for the buyers and all professionals involved. Most of all, they take time and programs can change or entirely go away in a hurry. Most sellers therefore will not even consider them.

The realtor you work with guides you through the process with skill, helps you understand trends, requirements, timelines, neighborhoods, and the list goes on. Additionally, strategic positioning to succeed in getting the home of your dreams will set you apart.

For additional facts and figures, please feel free to contact us at 415-200-7202.
©SFRE March 2016

March 2016 SFRE Market Update

March 15th, 2016 by Gabrielle Dahms

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Before we begin, please note that long-term San Francisco real estate market trends tend to be more accurate than monthly real estate market trends. Changes in fair market values are better assessed through a long-term view rather than through monthly and seasonal fluctuations in San Francisco real estate values.

During the last four springs high demand coupled with very low inventory was the norm. If that trend continues, the statistics coming in the next few months may reveal sustained home value appreciation in San Francisco..

However, the  San Francisco real estate market is just starting to pick up after little activity and slow movement during the holidays and the first month of the year. Homebuyers do not appear to be overly affected by the recent volatility in the stock market.  The San Francisco real estate market overall appears to sustain growth but at a less frantic and overheated pace than just a few months ago.

Mortgage rates hit their all-time low in 2013 at approximately 3.3% but mortgage rates are still low. They currently hover at 3.6%, very close to the historic low of 2013. Mortgage rates can of course change dramatically and suddenly but for the moment March 2016 rates are good news to home buyers and home sellers. Only 11% of San Francisco households can afford to buy a home at the current median home price. An income of $254,000 is the lowest that will qualify a borrower for such a purchase. (Source: CAR Housing Affordability Index (HAI) Quarter 4, 2015)

Buying a home in San Francisco

San Francisco is an expensive real estate market and there are few neighborhoods in which the median home price is below $1,000,000. This number applies to single family homes. Some of the San Francisco neighborhoods with current real estate values below a million dollars include the Excelsior, Visitacion Valley, the Bayview, the Portola, and Crocker Amazon. Neighborhoods like Bernal Heights, Pacific Heights, the Richmond District, and the Sunset District well exceed the million dollar mark for single family homes.

Buying condos, TICs, and co-ops  in San Francisco

Many San Francisco condos are luxury condos and there are many new luxury condo buildings on the market with more coming down the pipe. TICs vary considerably in age and finishes but hold prices that are close to or on par with condos. While prices in this segment vary considerably, the median price approximates $1,000,000, especially in neighborhoods like Mission Bay, South Beach, and Noe Valley.

Overbidding

The current overall percentage properties are overbid above the asking price sits at 107% for March 2016 versus 103% for February 2016. That percentage is generic and varies considerably depending on the neighborhood, condition, specific inventory in the given neighborhood and a number of other factors.

New Construction

Development continues in San Francisco. Thousands of new units, generally luxury condos are both opening and planned. .Well over 60,000 new housing units (market-rate condos, apartments and affordable housing) are in the development pipeline for the next 5 to 6 years, plus another 25,000 in 3 huge projects that may take decades to complete.

New developments keep being added to the pipeline. Many of these projects change and depend on economic or political conditions. Just this month the San Francisco Board of Supervisors voted to put a city charter amendment on the June ballot which would considerably increase the affordable-housing contributions developers of projects of 25+ units must make.

How much these increased contributions would affect new home construction in San Francisco remains unclear. Ted Egan, the city’s chief economist published his Economic Impact Report in late February 2016. This report states that the proposed requirement ‘may lead to a slowdown in the development of market-rate housing, which would constrain supply and place upward pressure on housing prices.’

So far, increased supply due to completed new construction has not created significant downward pressure on prices. Most development however aims at luxury condo development. For that reason, it is likely to be the luxury condo market to experience an eventual oversupply. Single family home values are likely to benefit from this dynamic, which could lead to further appreciation for them.

The San Francisco real estate market is affected by seasonality. The rise and fall of inventory, buyer demand, overbidding and median prices all reflect this. But it is the luxury home segment that is especially affected by seasonality:  expensive home sales typically soar in the spring, drop during the summer holidays, rebound briefly in the fall, and lie dormant in winter.

As spring arrives inventory is likely to rise.

 

©SFRE March 2016

If you are considering selling property in San Francisco, click to get your free preliminary market analysis.

Tax Deductions for Home Owners

March 10th, 2016 by Gabrielle Dahms

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Tax season is here and we’ve put together a few tax deductions for homeowners. Always check with your CPA for the nitty gritty of the deductions.

Okay, here they are:

  1. Mortgage interest, mortgage insurance premiums and deductible points.
  2.  The Residential Energy Credit.

This credit requires that the property qualify. Qualifications include solar heating property with at least 50% of its energy being solar, qualifying solar electric property, qualifying wind energy property, and qualifying fuel cell property, and a qualifying geothermal pump property. Consult your CPA for specific percentage requirements for all of these.

  1. Moving Expenses

Taxpayers may deduct the reasonable expenses of moving themselves and their families if the move is related to starting work in a new location.

Deductible moving expenses are limited to the cost of:

  • Transportation of household goods and personal effects and
  • Travel to the new residence, including lodging but not meals

Where an automobile is used in making the move, a taxpayer may deduct either:

  • The actual out-of-pocket expenses incurred, i.e., gasoline and oil, but not repairs, depreciation, etc.
  • A standard mileage allowance of 23 cents per mile for 2015 (19 cents per mile for 2016) plus parking fees and tolls.

This deduction applies to homeowners who are moving a minimum of 50 miles away from their former residence as well as a work-related relocation. Make sure to look at the specific requirements for the deduction and that they apply to your situation.

Business use of home

If you have an office in your home, you may be able to deduct home office expenses related to your business. The deduction is calculated by determining the square footage of the office compared to the square footage of the whole house. This percentage then is used to calculate the business percent of mortgage interest, real estate taxes, insurance, HOA dues, repairs and maintenance, utilities, etc.

Homeowners’ insurance, HOA dues, maintenance and repairs, and utilities are generally not deductible, though they may be if your home is also being used for your business.