Penthouses, Mansions, Short Sales & Fixer-Uppers
What Did San Francisco Homebuyers Buy in 2013?
Views, prices, architecture, neighborhoods, property types and sizes, parking, probate sales and appreciation rates: We data-mined all of San Francisco’s 2013 sales reported to MLS through the end of November and charted the results below.
Sales as described in and reported to San Francisco MLS by 11/25/13. All data herein is from sources deemed (at least somewhat) reliable — i.e. the information input by listing agents regarding their own listings — but may contain errors and is subject to revision. These charts do not include sales unreported to MLS, such as the sale of many so-called “pocket listings” and many of the new-development condo sales that occur.
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One of the first steps in designing an effective property marketing campaign is to analyze how buyers typically find the homes they purchase. It only makes sense to focus on those media and those efforts that grab the most eyeballs, generate the biggest response and create the greatest sense of urgency to see your home quickly—and write clean, strong offers. Ideally, one wants to orchestrate a multiple-offer scenario where motivated buyers compete with one another to buy your home—it is that situation or the perceived threat of that situation which generates the highest possible sales price.
Based on the chart below, it’s clear that the effort and money should go into comprehensive online marketing, including buying premier placement on the major real estate websites; on broker to broker marketing efforts, because a large percentage of buyers are still steered to listings by their agents; on open house advertising and presentation materials; and on efforts to reach the neighbors, which often includes a direct mail campaign.
As a foundation to these efforts, money is also well spent on preparing the home to show at its absolute best and on professional photography—since most buyers and agents will first see and evaluate the property through its photographs. Pre-marketing inspection reports can also be a smart investment. And it always makes sense to give thought to the buyer profile for your home—to whom will your property most appeal, and who is likely to pay the highest amount of money for it—as this can help tailor the home preparation efforts and marketing campaign to maximum effect.
The quality of the agent working on your behalf, his or her competence, integrity, work ethic, willingness to spend money on effective marketing, and commitment to your interests can make an enormous difference in the outcome of the sale of your home.
Median prices tend to mask large disparities in the prices of the underlying individual sales, especially in the case of larger cities. For example, San Francisco neighborhood median house prices range from $465,000 to $4,000,000, and there will be similar disparities in Oakland and San Jose. That being said, median prices can be useful to help show general appreciation trends, and to some degree, to compare home values between different areas. 2012 – mid 2013 was a period of rapid price appreciation just about everywhere on this map.
How buyers and sellers in San Francisco split the closing costs pertinent to the sale of real estate is ultimately decided in the purchase contract itself, but this list details how they are typically split in San Francisco County.
Very generally speaking, a buyer can expect that closing costs will run anywhere from 1% to 3% of the purchase price, the major variable being the loan points charged, if any, by their lender. Other than loan-related fees, the big costs for buyers are for escrow fees and title insurance, home inspections, the first year of hazard insurance and property tax pro-rations, if any.
For sellers, closing costs usually run in the range of 6% to 8% of the sales price, not including loan pay-off and any home preparation or repair costs. Typically, the largest seller costs are brokerage commissions and transfer taxes.
Here is the standard clause governing closing costs in the SFAR purchase contract (Revise date 10/09). Again, buyer and seller can agree to change how these costs are divided.
“PRORATIONS AND EXPENSES. The following shall be paid current and then prorated between Buyer and Seller as of Close of Escrow: real property taxes (based upon the latest information available regarding the assessed value of the Property and the applicable tax rate); bonds and assessments; Homeowners’ Association dues and assessments; interest on any loan(s) secured by the Property assumed by Buyer; premiums for any insurance on the Property assumed by Buyer; rents; and operating expenses. Security deposits and accrued interest thereon, where the law requires interest to be paid on security deposits, shall be credited to Buyer’s account at Close of Escrow. Buyer shall pay the escrow fee and title insurance premiums. Seller shall pay any real property transfer taxes. Buyer shall pay any Homeowners’ Association transfer fees and move-in fees. Seller shall pay any Homeowners’ Association move-out fees. Seller shall pay any prepayment penalty or other fees or charges imposed by lenders for loans being paid off through escrow. Unless specified in this Contract, all other prorations and expenses shall be paid by either Buyer or Seller in accordance with local custom. Buyer and Seller understand that the Property will be reassessed upon change of ownership. A supplemental tax bill will be sent to Buyer which will reflect a change in property taxes based on the Purchase Price becoming the new assessed value. Any tax bills issued after Close of Escrow for periods of time before Close of Escrow shall be paid by Seller.”
The information below is from the website of the San Francisco Assessor’s office, as of April 2013:
Property Taxes in San Francisco
Under State law (Proposition 13), real property is reappraised only when a change-in-ownership occurs, or upon completion of new construction. Except for these two instances, property assessments cannot be increased by more than 2% annually, based on the California Consumer Price Index. The property tax rate is 1% plus any bonds, fees, or special charges.
What is the Transfer Tax Rate for the City and County of San Francisco?
If entire value or consideration is:
More than $100 but less than or equal to $250,000, the tax rate is $2.50 for each $500 or portion thereof;
More than $250 but less than $1,000,000, the tax rate is $3.40 for each $500 or portion thereof;
$1,000,000 or more but less than $5,000,000, the tax rate is $3.75 for each $500 or portion thereof;
$5,000,000 or more but less than $10,000,000, the tax rate is $10.00 for each $500 or portion thereof;
$10,000,000 or more, the tax rate is $12.50 for each $500 or portion thereof.
Selling residential real estate in the San Francisco Bay Area is a complicated financial transaction involving many important issues: home preparation, pricing and fair market value, comprehensive marketing across a wide variety of media, buyer profile and buyer qualifying, contract negotiation, showing the property, statutory disclosure of the property’s condition and circumstances, buyer due diligence, appraisal and financing and liability management. Doing these things well can make a huge difference in time and money.
Below is a simple graphic that outlines the process, followed by a detailed step by step description from the first consideration of market conditions to having the proceeds of sale wired into your bank account. It’s relatively self-explanatory, but will make even more sense when reviewed with your agent, who can explain the decision points along the way and the strategies and options you will have at each step.
- Agent reviews Seller’s needs, preferences, priorities, timeline and special requirements
- Agent collects detailed information on the property’s condition and circumstance
- Agent prepares comparative market analysis assessing current market conditions and comparable sales, pending sales and competitive properties
- Agent develops marketing plan to maximize buyer and broker response
- Agent and Seller review the listing, marketing and sales process; how to prepare the property to show to its best advantage; Seller’s relocation needs; and Agency
- Agent and Seller calculate estimated costs and proceeds of sale
- Agent and Seller review and sign state Agency Disclosure and listing contract
- Agent and Seller discuss timeline for preparing, marketing and showing property, protocol for offer presentation and Seller’s preferences for close of escrow
- Agent and Seller prepare property disclosure package of statutory disclosures, and other pertinent reports and documents
Preparation & Marketing
- Agent collects keys, genies, alarm codes, showing instructions; HOA, building manager, condo or tenant information (as applicable)
- Agent coordinates staging and/or landscaping consultation
- Agent and Seller develop the property-preparation to-do list
- Agent begins development of marketing materials: flyers, brochures, direct mail and email pieces, newspaper and magazine advertising, open house advertising, sign, professional photography, Internet marketing, broker to broker marketing, etc.
- Agent schedules professional photo shoot of the property
- Agent coordinates pre-sale inspections of property: structural pest control, contractor, energy/water compliance, as appropriate
- Agent orders statutory 3rd party reports: city/county, natural hazard, etc.
- Property posted as featured home on Paragon and agent websites
- Property description, photos, brokers’ tour and Sunday open house entered into MLS
- Property posted to hundreds of real estate listing websites with multiple photos, extended description and showing information
- Agent creates property-showcase website with description, photos, slideshow, neighborhood information, financing options, etc.
- Property is posted to Craig’s List with photos, description and open house dates
- Agent orders property-purchase loan scenario sheets
- Agent arranges for catering of first Brokers’ tour and Open House, as appropriate
- “Just Listed” or Open House invitation cards mailed to surrounding area
- Agent alerts area brokerages via email announcements of new listing, showcase-website address, broker tour and open house dates
- Agent finalizes disclosure package of disclosures, reports and other pertinent documents
- Agent and Seller review market updates—new competitive properties, recent sales, changes in economic conditions—and revise marketing/pricing strategy as appropriate
- Property preparation to show is completed
Property Showing & Offer Review
- First brokers’ tour; agent solicits feedback and reports to Seller
- First open houses; agent solicits feedback and reports to Seller
- Showings by appointment
- MLS, websites and advertising revised to reflect next brokers’ tour and open houses
- Offer(s) received. Agent and Seller review offer(s)—price, terms, contingencies, close of escrow—negotiating strategies and possible counter-offers. Agent negotiates, on Seller’s behalf and instruction, to achieve best possible price and terms
Offer Acceptance, Contingencies of Sale & Close of Escrow
- Offer is ratified; back-up offer is also ratified, if possible
- Agent confirms that escrow is opened and Buyer’s initial deposit received
- Agent prepares Timeline for the Removal of Contingencies and Close of Escrow
- Agent provides Seller’s loan payoff information to Escrow Agent
- Property marketing continues until all Buyer contingencies are removed
- Agent coordinates the delivery of all outstanding statutory disclosures and documents to buyer
- Agent and Seller review Preliminary Title Report
- Agent coordinates and attends Buyer property inspections, and supplies Seller with inspection report copies
- Agent coordinates financing appraisal and monitors Buyer’s loan approval process
- Agent monitors Buyer’s removal of contingencies item by item as contractually specified: approval of RETDS, other disclosures and reports, inspection contingencies, loan and appraisal contingencies, approval of Preliminary Title Report, etc.
- As appropriate, Agent counsels Seller and facilitates Seller collection of additional information—contractor quotes, title and permit data, legal advice, etc.—necessary for Seller to understand, quantify and resolve contingency removal or renegotiation issues
- As necessary, Agent coordinates any statutory compliance or repair work necessary: energy and water conservation compliance, smoke detectors, water heater strapping, etc.
- Agent represents Seller should Buyer attempt to renegotiate purchase price or terms; Agent coordinates delivery of Seller’s Notice to Perform to Buyer, as necessary
- Buyer contingencies of sale are removed
- Agent confirms Buyer’s increase of deposit into escrow, and Receipt for Increased Deposit under Liquidated Damages is completed, if and as contractually required
- Agent coordinates final Buyer walk-through
- Agent provides final escrow instructions, and schedules appointment for Seller to sign closing documents; Agent and Seller review Seller’s Estimated Closing Statement
- Agent and Seller meet at Title company for signing of closing documents
- Agent confirms with Escrow Agent everything is done for close of escrow: final Buyer monies deposited, funding of Buyer’s loan
- CLOSE OF ESCROW
- Seller receives proceeds of sale; Agent coordinates delivery of keys, genies, alarm codes to Buyer’s Agent
Buying a home is typically the largest, most complicated, and often most emotional financial transaction of one’s life. There is a lot at stake, not just money but also issues such as security, happiness and everything else wrapped up in the concept of “home.” One of the main reasons why it can be so stressful is that one’s agent never explains how the process actually works step by step, what the decision points will be and the options one has at each step. When one understands the process and has a sense of control over how it will proceed, much of the stress is alleviated.
Below is a simple graphic that generally outlines how one thing leads to another from first beginning the search for a new home to having the keys to the front door put into your hands. It’s relatively self-explanatory, but will make even more sense when reviewed with your agent. Remember that you are the sole decision-maker throughout the process: a good agent renders honest, experienced counsel and helps manage and coordinate everything that needs to happen, always with an eye to protecting your interests, but never presumes to make decisions for his or her client.
The quality of the agent working on your behalf, his or her competence, integrity,
work ethic and commitment to your interests can make an enormous difference
in the outcome of your home purchase.
Later this week on Parascope we will feature our New Home Developments Interactive Map –stay tuned!
This map of San Francisco neighborhoods is according to the San Francisco Association of Realtors district and sub-district, Multiple Listing Service (MLS) specifications. Real estate values and prices, property types, age of construction, architectural styles, views, amenities, commercial districts and home sizes can vary widely between different neighborhoods. Indeed, San Francisco is more a collection of delightfully different neighborhoods than a homogenous entity.
If you adjust your screen view to a zoom of 125%, the map will be that much easier to read. If you click on the “Explore” tab above you will find more information about SF neighborhoods; if you click on “Home” you can quickly search for properties by neighborhood; and if you click on ”Market Dynamics” and then “Neighborhood Values” you’ll find analyses of home prices by neighborhood. Please use the “Contact Us” link if you have any questions.
SAN FRANCISCO REALTOR DISTRICTS
District 1 (Northwest): Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain
District 2 (West): Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights
District 3 (Southwest): Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview
District 4 (Central SW): St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands
District 5 (Central): Noe Valley, Eureka Valley/Dolores Heights (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights
District 6 (Central North): Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights
District 7 (North): Pacific Heights, Presidio Heights, Cow Hollow, Marina
District 8 (Northeast): Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin
District 9 (East): SoMa, South Beach, Mission Bay, Potrero Hill, Dogpatch, Bernal Heights, Inner Mission, Yerba Buena
District 10 (Southeast): Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission
Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which includes both Russian Hill and the Tenderloin.