San Francisco homes are priced BELOW market when they are listed for sale. Yes, that's right. If you're going to fight it, you can't buy here. It's pretty normal for first time home buyers to rail against this pricing tactic. And that's what it is, a tactic, or a strategy. We (SF real estate agents) under-price homes in hopes of generating lots of traffic and multiple offers.
First time home buyers often get mad when they discover that $599,000 really means $660,000 or sometimes $730,000. To discover the real value of a home you're interested in you need an expert to run a comparable report. Called "CMA" for Comparative Market Analysis, these look at nearby, similar homes that have sold very recently. If 5 similar homes sold between $625,000 and $675,000 in the last 3 months, then the home is worth between $625,000 and $675,000. Sorry, you can't have it for $599,000 because 10 other buyers will out-bid you. An "expert" can be an appraiser, but is usually a local real estate agent who has access to complete sales and listing data, and is good at crunching numbers and determining which homes really are comparable.
The reason I'm writing this post isn't for you, the first time San Francisco home buyer. It's for the out of town agent who is advising their client. You can't, and you shouldn't. Our market isn't like yours, and your access to home sales data is probably pretty poor. On one home I've had two problems. First is the Sacramento agent who helped my client buy a home up there before putting her home here on the market. That agent led her to believe her $800,000 to $850,000 home was worth at least $900,000. Now I've got a much closer East Bay agent advising his Buyer clients to make a $750,000 offer when I've priced the home at $795,000. When I called the agent to let him know that my Seller was actually offended by the offer, he was dumbfounded saying he had run comparables. Yes, there were nearby sort of similar homes that sold for an average of $750,000, but they were actually quite different. Just a few blocks away is "the other side of the tracks" according to neighbors. That's probably a $50,000 or more difference. My client's home also has views probably worth $50,000, etc, etc.
So we'll see what happens with these Buyers. They'll probably pass on a great house all because they can't recover from the shock of the "real" price. So, you out of town (including across the Bay) real estate agents. Please refer your SF buyer to an SF agent.
1/25/06
1/24/06
Buyers Use of the Internet to find Homes
The National Association of Realtors released a results from a study of Home Buyer and Sellers showing increasing reliance on the internet as a source for searching for homes. A summary of this this study can be found at the NAR site here:
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/HmBuyerSellerSurvey06?OpenDocument
In 2005 77% of Home Buyers used the Internet to search for homes. That's up from a mere 2% in 1995. 90% used Agents and 71% said they used Yard Signs. This is mere conjecture, but it is my belief that reliance on the Internet would be even higher in San Francisco, and the use of Yard Signs much lower. The reasons are obvious - most of us don't have yards, and don't spend Sunday's driving around browsing lawn's and house fronts for homes and areas we might want to live in. That's a suburban phenomonon. Plus, San Franciscan's are probably some of the most web and tech savvy on the planet, so it's likely we skew much higher for internet use in general, and real estate specifically.
I personally didn't need the NAR to convince me that more and more Buyers were using the internet since I use the Internet for just about everything. Need a definition for a word - I have no idea where my dictionary is, so I just Google it. Need a new piece of furniture, a rug, to find the nearest Post Office... the internet, the internet, the internet. So as a Real Estate Agent I've gone out of my way to find the best house hunting tools on the web, and then bring them directly to my Buyers and Sellers.
Buyers have told me that CleanOffer.com is by far the best home search tool, so I've pre-paid for an unlimited-client subscription. Register at www.SF.CleanOffer.com and select me as your agent and you get unlimited use of this service.
Sellers - instead of the nationally advertised site HouseValues.com, try my local San Francisco site www.Evaluate-My-Home.com
Buyers - want email alerts on properties of interest? Try www.Automated-Homefinder.com
Want access to the MLS try www.SF-MLS-Search.com
I can make recommendations for the best internet Mortgage Calculators (BankRate.com), and know exactly where to find various San Francisco departments for Variances, Property Tax info, Building Permits, and much more - all on the internet. Email me with any of your San Francisco real estate questions, and I'll most likely email you back with a site that does the best job of giving you the information clearly and concisely. Try me :)
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/HmBuyerSellerSurvey06?OpenDocument
In 2005 77% of Home Buyers used the Internet to search for homes. That's up from a mere 2% in 1995. 90% used Agents and 71% said they used Yard Signs. This is mere conjecture, but it is my belief that reliance on the Internet would be even higher in San Francisco, and the use of Yard Signs much lower. The reasons are obvious - most of us don't have yards, and don't spend Sunday's driving around browsing lawn's and house fronts for homes and areas we might want to live in. That's a suburban phenomonon. Plus, San Franciscan's are probably some of the most web and tech savvy on the planet, so it's likely we skew much higher for internet use in general, and real estate specifically.
I personally didn't need the NAR to convince me that more and more Buyers were using the internet since I use the Internet for just about everything. Need a definition for a word - I have no idea where my dictionary is, so I just Google it. Need a new piece of furniture, a rug, to find the nearest Post Office... the internet, the internet, the internet. So as a Real Estate Agent I've gone out of my way to find the best house hunting tools on the web, and then bring them directly to my Buyers and Sellers.
Buyers have told me that CleanOffer.com is by far the best home search tool, so I've pre-paid for an unlimited-client subscription. Register at www.SF.CleanOffer.com and select me as your agent and you get unlimited use of this service.
Sellers - instead of the nationally advertised site HouseValues.com, try my local San Francisco site www.Evaluate-My-Home.com
Buyers - want email alerts on properties of interest? Try www.Automated-Homefinder.com
Want access to the MLS try www.SF-MLS-Search.com
I can make recommendations for the best internet Mortgage Calculators (BankRate.com), and know exactly where to find various San Francisco departments for Variances, Property Tax info, Building Permits, and much more - all on the internet. Email me with any of your San Francisco real estate questions, and I'll most likely email you back with a site that does the best job of giving you the information clearly and concisely. Try me :)
1/20/06
Best time to sell?
Here's Forbes Magazine's opinion on the best time to sell:
http://www.forbes.com/realestate/2006/01/19/time-sell-realestate-cx_sc_0120home_ls.html
You've got to open an additional link to get to the San Francisco opinion, but it's just one agent's opinion which is kind of generic and can be summarized as "sell when the broker tells you to". But one valid point that most of us realize is that weather/season's isn't much of a factor in San Francisco compared to most other parts of the country. Additionally, our city tends NOT to be influenced as heavily by families who'd rather buy when they're kids are out of school - making the the summer season just another season. The best time to sell in San Francisco? Probably mid-January through June. The summer is OK, the early Fall is OK, just don't do it during the holidays.
Is right now a good time to sell? Well, buyers are afraid of the bubble, and seller's still think they can demand any price they want. So if you're a realistic seller, who listens to the comparable property report your agent prepares for you, as well as his/her pricing strategy, then YES, it is a good time to sell. If you want 30 offers, and $100,000 more than your place is really worth, then you'll need a time machine back to 2004 or mid-2005. That's old news, and any agent who promises you anything remotely like that is "buying" your listing - see my last Blog for more on that.
http://www.forbes.com/realestate/2006/01/19/time-sell-realestate-cx_sc_0120home_ls.html
You've got to open an additional link to get to the San Francisco opinion, but it's just one agent's opinion which is kind of generic and can be summarized as "sell when the broker tells you to". But one valid point that most of us realize is that weather/season's isn't much of a factor in San Francisco compared to most other parts of the country. Additionally, our city tends NOT to be influenced as heavily by families who'd rather buy when they're kids are out of school - making the the summer season just another season. The best time to sell in San Francisco? Probably mid-January through June. The summer is OK, the early Fall is OK, just don't do it during the holidays.
Is right now a good time to sell? Well, buyers are afraid of the bubble, and seller's still think they can demand any price they want. So if you're a realistic seller, who listens to the comparable property report your agent prepares for you, as well as his/her pricing strategy, then YES, it is a good time to sell. If you want 30 offers, and $100,000 more than your place is really worth, then you'll need a time machine back to 2004 or mid-2005. That's old news, and any agent who promises you anything remotely like that is "buying" your listing - see my last Blog for more on that.
1/13/06
Buying Listings
San Francisco real estate has finally seen an uptick in homes for sale (called inventory by real estate agents). It seems sellers are finally ready to sell after hanging onto their homes waiting to eke out every last cent of appreciation before "cashing in".
But more homes and slowing buyer demand means seller's can't expect multiple offers and crazy over-bidding.... yet they do expect that anyway. And one ugly trend, (if a trend can be 3 instances I've personally been involved in) is agent's who "buy the listing". "Buy the listing" is real estate speak for an agent who tells the seller he can get 10% to 20% more than any other agent said. For example, I think a condo will sell for about $1 million, but another agent says he can get the seller $1.2 million. When you look at the comparable properties that have sold in the last 6 months, not one property went for more than $1.1 million, and that one had several nicer features, and was a tad larger. So how will the other agent get $1.2 million for them? The answer is that he won't. But seller's often get swayed by his assurances, and when only one offer of $1 million comes in, they accept it because they can't afford to go through another re-listing period and waste another couple of months.
To me this is unethical and I would never "buy" a listing. But after losing 3 listings to this tactic, it's clear sellers must be warned against this sleazy behavior. Every seller should interview at least 3 agents, and probably more. If one agent quotes a price well above everyone else, the seller should be prepared to ask for proof. You will really WANT to believe him because it means a lot more money in your pocket. But you must try to look at the information objectively. If only one other home sold for as much as this agent is quoting you, ask yourself if your home really is as nice, or as large, or has as many features. Drive around and look at the other homes too. Try to be honest with yourself, would you really pay the higher price for your current home when you could have all of those extra features for the same price? Of course not! Only a dumb - or - desparate buyer would. But buyers have more options now, so they are not desparate, and since such an expensive purchase is almost always the most important financial decision of their lives, you can bet that there is no such thing as a dumb buyer. So don't be a dumb seller - kick this unscrupulous agent out of your house.
Instead of letting an agent "buy" your listing, hire the agent with the best marketing plan, who you have the best rapport with, and you instinctively trust.
But more homes and slowing buyer demand means seller's can't expect multiple offers and crazy over-bidding.... yet they do expect that anyway. And one ugly trend, (if a trend can be 3 instances I've personally been involved in) is agent's who "buy the listing". "Buy the listing" is real estate speak for an agent who tells the seller he can get 10% to 20% more than any other agent said. For example, I think a condo will sell for about $1 million, but another agent says he can get the seller $1.2 million. When you look at the comparable properties that have sold in the last 6 months, not one property went for more than $1.1 million, and that one had several nicer features, and was a tad larger. So how will the other agent get $1.2 million for them? The answer is that he won't. But seller's often get swayed by his assurances, and when only one offer of $1 million comes in, they accept it because they can't afford to go through another re-listing period and waste another couple of months.
To me this is unethical and I would never "buy" a listing. But after losing 3 listings to this tactic, it's clear sellers must be warned against this sleazy behavior. Every seller should interview at least 3 agents, and probably more. If one agent quotes a price well above everyone else, the seller should be prepared to ask for proof. You will really WANT to believe him because it means a lot more money in your pocket. But you must try to look at the information objectively. If only one other home sold for as much as this agent is quoting you, ask yourself if your home really is as nice, or as large, or has as many features. Drive around and look at the other homes too. Try to be honest with yourself, would you really pay the higher price for your current home when you could have all of those extra features for the same price? Of course not! Only a dumb - or - desparate buyer would. But buyers have more options now, so they are not desparate, and since such an expensive purchase is almost always the most important financial decision of their lives, you can bet that there is no such thing as a dumb buyer. So don't be a dumb seller - kick this unscrupulous agent out of your house.
Instead of letting an agent "buy" your listing, hire the agent with the best marketing plan, who you have the best rapport with, and you instinctively trust.
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