Author: Patrick Lowell

How to buy a home in San Francisco if you are an expat

Posted on Patrick Lowell

Expats can buy a home in the U.S.

If you are considering a move to the U.S. from another country, you will quickly learn that the process of buying a home here is unique and probably even a little baffling at first. Here is what you need to know:

  1. Step one is to find the right real estate broker to guide you. In San Francisco, like much of the U.S., buyers and sellers each have their own dedicated broker to help them. Your broker is your primary advocate throughout the real estate purchase process and can help you to buy any available home on the market regardless of which broker is representing the seller. He or she has a fiduciary duty to represent your best interests. Sellers pay the commission which is the compensation for both brokers. Buyers rarely pay any commission at all.
  2. Get pre-approved for a loan. Without a U.S. credit report and social security number it can sometimes be challenging to get a mortgage loan. Here is how the system typically works: after a potential home buyer applies for a loan, the mortgage lender uses their social security number to check credit history which is pulled from three credit bureaus: Trans Union, Equifax, and Experian. Each of these bureaus collects data from various creditors like banks and credit card companies regarding an individual’s payment history, amounts owed, etc. That data is used to formulate a score called FICO which gauges an individual’s perceived credit-worthiness. The score can range from 300-850. Anything over 700 is generally considered very good. The credit bureaus and resulting FICO score only considers credit history earned in the U.S., not overseas.  If you are new to the U.S., this is clearly a bit problematic. There are some alternatives for expats who are new to the U.S., so finding the right mortgage lender is key. Your real estate broker can refer you to a few lenders that can help.
  3. Start looking at neighborhoods and homes with your broker. This step may take a while as you learn the areas and nuances of the city along with the various property types that fit into your budget. San Francisco is geographically small but it has 89 distinct neighborhoods, so there is a lot to learn. Your broker can give you access to MLS, the database of all available homes in the city.
  4. Once you find the right home for you, then it’s time to make an offer. Offers are comprised of price and various terms that your broker will discuss in detail with you. Offers can be contingent upon certain events like a professional home inspection or even full mortgage loan approval. Your broker will discuss the pros and cons of various offer terms to make it attractive to the seller while still protecting your interests. The timeframe of offering on a home to actually getting keys in your hand is generally about 35 days or less.

I have represented many buyers from other countries. I’d be glad to sit down and talk with you about the process to see if buying a home in San Francisco is the right move for you.  Just let me know when you’d like to meet. I can be reached at (415) 971-5651.

San Francisco Real Estate Prices for 2015

Posted on Patrick Lowell

It’s been another wild year in SF real estate.  The median sale price for a condo is $1,100,000 which is up more than 15% from a year ago.  Single family home prices jumped almost 13% to $1,250,000.  As we enter 2016, that strong upward trend is likely going to cool. With mortgage interest rates increasing and international financial markets showing more signs of instability, my prediction is that we’re likely heading toward a somewhat less robust seller’s market than we have seen in the last few years.  As always, it will be interesting to see how things unfold. If you are thinking of selling or buying a home, feel free to get in touch, I’m here to help.

2015 prices of condos and houses in San Francisco
SF Median prices for 2015

What are the most common methods of holding title to property in California?

Posted on Patrick Lowell

There are plenty of big decisions that need to be made during the process of buying a home or condo. One decision that buyers often don’t consider in advance is how they’d like to hold title to the property. The method of holding title, often referred to as “vesting”, can have significant legal and tax implications so it should always be discussed with an attorney or tax pro. Before the sale can be completed, the title insurance company will need to know how the property is to be vested. Thinking about the options in advance may help to make the process smoother for you.  The chart below from Fidelity National Title summarizes the more common methods of holding title. Click on the chart to enlarge it.  If you are considering buying a home in SF (or anywhere else for that matter) just let me know, I’ll be happy to help.

Holding title to real property in CA

How’s the market in San Francisco?

Posted on Patrick Lowell

“How’s the market?”  This is one of the most frequent questions that I get from clients and friends. As things cool down for the winter season, I thought it may be time to help shed some light on it.  We’ve put together a few graphs to show you exactly what’s happening in the market right now. I have much more data to share, so feel free to let me know if you have questions about your specific property or neighborhood.
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2 new condo listings in the Mission District

Posted on Patrick Lowell

I have two great condo listings coming up soon in the Mission District. Here is some info on each, let me know if you’d like more details before they go on the market:100_2186

2889 24th Street #6 is a bright two bedroom two bath condo facing the quiet side of the building. Built in 2006, this intimate building sits in the heart of the Mission within walking distance to BART, shopping, restaurants and more.  Approximately 935 square feet of living space per the condo map. This sweet condo offers upscale appliances, a contemporary open kitchen, gas fireplace, garage parking, in-unit laundry and a large shared patio. This one is not to be missed. List price is $875,000

2208 Mission St #405 is an awesome three bedroom two bath condo at the corner of 18th & Mission. Located just steps to some of the finest restaurants and coffee shops plus BART and tech shuttles are within a few blocks. The building was built in 2009 and includes a locally-owned grocery store and an upscale coffee shop. Approximately 1173 square feet of living space per tax records. This condo boasts a huge central great-room concept for living/dining/entertaining and it includes a private balcony, shared laundry, garage parking, common area roof deck, and one of the most walkable locations in the city. List price is $975,000

How do I buy a home in San Francisco?

Posted on Patrick Lowell

If you’re beginning to think about buying a place in SF, there is one sure-fire thing that you should do before you spend too much time visiting open houses. Get pre-approved for a mortgage. Until you know how much home you can comfortably afford, it really doesn’t make much sense to fall in love with the place of your dreams. Unless you are just browsing with no intent to buy soon, looking at homes before getting pre-approved for a mortgage is a bit of a cart-before-the-horse kind of thing. It is easy to fall in love with the perfect place when you see it. Unfortunately it is also that much more disappointing to learn that it is financially out of reach.

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I suggest that buyers get pre-approved for a loan with two different sources. One direct lender (for example, Wells Fargo) and one local mortgage broker.  As I have mentioned before, the big banks are notoriously quite slow and bureaucratic when it comes to issuing mortgages. The reason is simple, they are huge organizations that make money by selling off bundles of mortgage loans. They can only do that if certain loan underwriting criteria is adhered to from the outset with every buyer. Careful mortgage underwriting is certainly good (hello 2008, I’m looking at you) however the slow-moving process can sometimes present problems for buyers who are trying to purchase a home in this very fast-paced seller’s market. Bottom line here is that sellers are really not interested in waiting around to see if you happen to get your loan or not.

A mortgage broker has access to many loan sources, from small banks to local portfolio lenders, all of which tend to move much faster than big brick & mortar banks. Mortgage brokers also know that properties in San Francisco often come with some local idiosyncrasies that do not exist in other areas. When underwriting with one lender is not working out for a buyer, a mortgage broker can move the loan to another lender to get approval.  I can suggest a number of reliable San Francisco mortgage brokers that have helped my clients over the years. Guaranteed Rate, Opes Advisors, Guarantee Mortgage are three examples. Let me know if you’d like any specifics about who to contact at each company.

By the way, some lenders and mortgage brokers offer the ability for buyers to get fully approved in advance (not just the customary pre-approval). If your lender offers it, do it. You will be ahead of the many buyers who don’t take this extra step in advance. Buyers are increasingly competing to get properties. It makes sense to be as prepared as possible.

Where are the open houses in San Francisco this weekend?

Posted on Patrick Lowell

This is going to be a very busy weekend. There are hundreds of condos and single family homes having open houses throughout the city. I’m particularly intrigued by 11 of them.  Here are my favorites. If you’d like to see  a list of all of all houses and condos having open house events, here’s a full list of what will be open this weekend. Want to search by neighborhood? Check out my neighborhood search. Let me know if any catch your eye. Have a great weekend!

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4 tips for selling your home in San Francisco

Posted on Patrick Lowell

It’s no secret that we’re in a seller’s market right now. Limited inventory, competing buyers, and multiple offers above list price seem to be the new normal. This will certainly change as the market goes through its normal cycle but for now things are clearly favoring sellers. Despite the current robust market, sellers still need to be very careful as they prepare to sell their home. Here are my suggestions for getting your home or condo sold for the highest price possible:

1.  Your home should be vacant and staged.
It is important that buyers can envision themselves living in your home, instead of being reminded by visual queues that you live there. Staged homes typically fetch higher sale prices that non-staged properties. I understand that moving out and staging is sometimes not feasible, but at a minimum the home should be freshly painted, in reasonably good condition, clean and clutter-free.

Untitled Infographic2.  Do not overprice your home.
The best marketing in the world will not sell an overpriced home, even in a seller’s market. Most sellers have an almost irresistible desire to slap a sky high price tag on their home. Like most things in San Francisco though, real estate works a bit differently here compared with other cities. In the majority of SF neighborhoods right now, it’s customary to list your home a bit lower than you expect to actually end up with. Assuming the market demand warrants it, an offer date is set.  That date is essentially an engraved invitation to buyers to make their highest and best offer. Real estate guru Barbara Corcoran said it best: “Don’t ever be afraid of underpricing your home, because market forces always correct an underpriced property. It’s called a bidding war, and you’ll be smiling when it starts.” If you’re worried that you’ll be forced to accept a low offer, don’t stress. In San Francisco, you are never obligated to accept any offer at any price until you actually accept it. There are many exceptions to this strategy, it does not apply to all homes, all sellers, or all neighborhoods. Carefully consult with an experienced broker on this.

3. Disclose. Disclose. Disclose.
Selling a home can be a litigious minefield. Buyers sometimes claim that they were misled by sellers who did not reveal all they knew about a home. There’s a simple way to avoid much of this risk though, since the only buyers who sue sellers are surprised buyers.  If you are selling your home, you are required by law to document any material facts in advance of the sale. Disclose everything that might surprise a reasonable person if they were to learn it after the sale was over. Every home and neighborhood has some degree of imperfection, especially in San Francisco. A crack on a wall, chipped paint on a doorframe, an appliance that is not working properly, a constantly barking dog next door, the stolen bike from your garage last year, a noisy freeway nearby, etc.  Will a list of negatives turn off a motivated buyer? Highly doubtful. In fact your thorough disclosures tell buyers that you are forthcoming and diligent. This potentially could result in a higher offer because buyers will likely feel more informed, more comfortable, and less apprehensive about the purchase.

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4. Hire an experienced real estate broker who knows the local market.

Are you working with an experienced licensed broker? How long has he or she been selling homes? Can they provide testimonials from past clients? Do they have a professional web site and a solid online presence? This person is representing you (and probably your biggest financial asset) so make sure to do your homework.  Of course, if you are thinking of selling,  I’d love to have a chance to go over my proven marketing plan with you before you list your home.

I’ve represented many sellers over the years so I have plenty of additional tips to share. Just call or email me.

How’s the Real Estate Market in San Francisco?

Posted on Patrick Lowell

Every day without fail, someone asks me how the market is doing. I love this because it tells me that people are interested in our city and engaged with real estate. Everyone is curious about prices and trends and what the future may hold for the local real estate market in SF.  I thought it may be helpful to prepare a city-wide 5 year trend of median prices of single family homes, condos, and TICs.  So here it is!  I have tons more data to share on a neighborhood level too, so just let me know if you have questions about your specific area of SF.  Enjoy!

The Rockwell, new luxury condos in Pacific Heights

Posted on Patrick Lowell

rockwellsf

The Rockwell is a new and highly anticipated Pacific Heights condo community going up near the corner of Franklin and Pine. When it’s finished in late 2016, the project will include two 13 story buildings for a total of 260 condos. The Rockwell includes a 24 hour lobby attendant, owner’s club room, fitness center, plus a stunning rooftop lounge and outdoor terrace. The units are comprised of 1 and 2 bedroom homes priced from $749,000 to $1,624,000. The penthouse units will be priced higher. Most of the larger units include stacked parking for 1 car.  Monthly homeowners dues range from the $800’s to high $900’s per month depending on the unit. It will be awhile before buyers can move in, but it looks like it will be worth the wait.  Let me know if you’d like a preview tour of this impressive property.

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6 Tips for Buyers: How to get an offer accepted in San Francisco

Posted on Patrick Lowell

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If you are like most buyers today in San Francisco, you have already submitted offers (and were outbid) on more than one property. In this fiercely competitive market, buyers are routinely competing for the best properties. Only the most creative and aggressive buyers are able to get their offer accepted. Since the market is so competitive, it is important to make your offer ultra compelling to a seller.  Below are some tips that will help:

1.  Assuming there is serious competition for the property you want, submit your highest and best offer right out of the gate. While counter-offers are certainly possible, they are less common in highly competitive situations. After your initial offer, you will most likely not be given a second chance on a popular property. 

2.  Conduct property inspections before you submit an offer or rely on the inspections provided by the seller. Putting an inspection contingency clause in your contract is possible however it reduces the overall attractiveness of your offer. 

3. Know the sellers’ situation. Do they need a rent back period because they’re looking for another home? Are they doing a 1031 exchange? Is the home being sold by a family following the death of the owner? Knowing the circumstances of the seller may help you to structure your offer in a way that is more likely to be accepted.

4. Make sure you are being represented by an experienced local San Francisco real estate broker who knows the market. The nuances of the real estate market in SF are significant and very unique to our city. The idiosyncrasies surrounding topics like offer dates, mortgage underwriting, disclosure packages, termite inspection reports, rent control, local professional inspectors, energy & water conservation rules, and condo conversion can all make or break your transaction.  Be sure you are being represented by a local San Francisco real estate broker who knows what they’re doing.

5. Like it or not, you will probably be competing with all-cash buyers. Cash offers are of course very appealing to a seller. If you are like most people however, you’ll need to get a mortgage;  get fully underwritten in advance by a local mortgage broker. I do not recommend going through a big bank for your mortgage. The underwriting process at the giant brick & mortar banks is typically extremely time-consuming. It moves much slower than the brief timelines that are customary in our brisk purchase process in SF. That can push you in to a stress spiral at the 11th hour when the bank is dragging their feet on issuing your final loan approval while the seller is demanding that you remove your loan contingency (that contingency is what protects your deposit). Mortgage brokers generally are able to communicate with loan processors and underwriters so that they can get things moving along should any approval issues arise. Mortgage brokers coordinate loans through many sources, so if one lender will not loan at terms that work for your situation, it’s likely that he or she can find another one that will. Your real estate broker can recommend solid mortgage brokers, just ask.

6. Include a personal letter to the seller with your offer. Tell the seller about you and why you love the home. Connect on an honest and personal level. I have seen buyers prevail because of a letter, even when their offer was not the highest one received.