TICs fetching the same price as condos?

I’m going to hope the Stammtisch comes through with a quick response to this reader’s question, as I am totally swamped right now. If they don’t I’ll get to your answer this weekend. Thanks for writing in.

In Andy Sirkin’s famous online article on condo conversion in SF, the graph seems to suggest that vacant 2 unit TICs are fetching the same price as condos (Condominium Conversion in San Francisco), implying there is not much upside in condo conversion price-wise. However, I have also heard from some Realtors that condo conversion of duplexes can increase the building value by 10%. What’s your thoughts on this?

Thank you for your sagacious response.

And yes, I had to look up the word sagacious. Keeping me on my toes. I like it.

SF getting hurt by subprime crisis?

A quote and a link from Damion Matthews…to an article that is quite representative of a lot of what is going on in some parts of the city, and not at all representative of a lot of what is going on in many parts of the city. Get that? ;-) Read it again.

In and around San Francisco, where the median home price is about $1.1 million, the tougher financing environment has created a “hesitancy” and has led to some canceled escrows for buyers around the $1 million range, said Rick Turley, president of the San Francisco and Peninsula Region for Coldwell Banker Residential Brokerage.-Rick Turley, president San Francisco & Peninsula Coldwell Banker

-Subprime Mortgage Woes Spreading [Forbes.com]

Just “Wondering”

A reader kindly asks about 2746 Gough #1 in Cow Hollow, and 120 Cherry in Presidio Heights, so I thought we’d give the answers.

120cherry.jpg

120 Cherry is a home that hadn’t been on the market…ever, since it was built in 1923. (According to the “remarks”.) It is in Presidio Heights, is a trophy home, and it basically flew off the shelf. It most likely fetched multiple offers, and it sold for $3.7M which was $500,000 above asking, and $1243 per square foot. It closed last week, 8/18/07. Click here for details.

2740gough1.jpg

2746 Gough #1, was another property that practically flew off the shelf, was asking $1,295,000 and sold for $1,465,000. It closed escrow 7/17/07, and came out to be $776 per square foot. Click here for details.

As always, don’t hesitate to contact us if you have any questions about San Francisco real estate. We’re glad to help.  And feel free to rip into that kitchen, cuz that’s what $3.7 mil buys you in Presidio Heights these days.

How to buy a foreclosure in San Francisco

by “Dave”…a reader that seems to have just scored a great home. Important detail he left out, and what I’m dying to know…did you use a Realtor?

As I mentioned before, there wasn’t much magic in my purchase. The house was listed on MLS like everything else but was disclosed as an REO. I had an RSS feed set up to track craigslist postings with the phrase “REO” or “bank owned”. (Real estate MLS search engines lack this keyword search capability..)

Once I saw this property show up, I attended open houses like everyone else. I think what scared most people away is the amount of deferred maintenance. 101 years old and not very well kept up. Needs a few big ticket items right off the bat ($75-100k), but I can afford to do these repairs and don’t mind the temporary inconvenience.

Lastly, I presented a very clean offer. I cannot stress how important this is when purchasing a trust sale or an REO. The seller is a bank. (Imagine a room full of dudes in suits in a boardroom, hundreds or thousands of miles away from the property.) They do not want to negotiate with you about the lead paint on the windowsill or the cracks in the plaster. They have probably never seen the property.

They also don’t want lots of contingencies. I waived inspection and pest reports. (I had my contractor inspect it anyway, but not write up a report. This was just for my peace of mind…) They won’t wait on you to sell your home, etc. Money talks, you know the rest of the saying.

We submitted an offer that was roughly $30k below asking (and the house was already listed for almost $300k below it’s previous selling price) but the offer was super, super-clean. There were four offers total. I’m guessing that I wasn’t the high bid, but I was the cleanest. Also had great credit and came pre-approved (harder to do in the current climate).

For those looking to help on property shark or foreclosures.com, I can’t help you. I’ve found those sites kinda useless. To buy at auction on the courthouse steps requires mega cash. Not possible for me, and most of those properties are in crap neighborhoods. There are books (I’ve read them) that tell you how to find people who are in trouble (recipients of NODs) but it’s a creepy notion to me that I should call or send a letter to a distressed borrower, offering to bail them out…

If you’re looking for a deal, I recommend setting up RSS feeds on craigslist and searching for NOD, REO, “short sale”, “pre foreclosure”, etc. If people are desperate to sell, they’ll typically advertise it. Good luck to all…

Construction starts in 2 weeks!

Thanks for the details, and thanks for sharing.

Stump the Stammtisch: Why do an off-market deal?

This question came to me from Sophie, a very avid reader of both theFrontSteps and the sfnewsletter. I’m hoping we can provide some insight.

Dear Alex,

I’m very puzzled by something that happens more often than I can understand in the SF market.

Why would ANY party agree to an off-market deal? (VIP houses put aside.)

I dont get why the seller would agree to sell to the first [buyer], without trying to get more? And of course, the trick question of “one agent, or two agents in the deal?” If there is only one agent, you could badmouth that the agent gets the whole 6% without having to work? But if there are 2 agents, why would they agree not to put the sale out? Or is an off market deal hiding some % [of the] commission “arrangements”?

And to [expand on the topic]- are some properties sold FSBO in a deal with NO agents at all? Who would even consider to do so? [Taken out to keep the flow of this question.]

Anyway. WHY? I can understand the part of fixing/painting/staging yourself. I could understand the part of FSBO in some market out of San Francisco. But I can’t figure out the off-market deals.

Further more – do your ‘pocket listings’ cover this? If not – what is a pocket listing, and why should a seller learn about the option, and why should a buyer keep his ears open?

Holy hell Sophie, great questions. Lost me on a few of the tangents, but I think I got the gist. I’m hoping some other Stammtisch members will add their take in the comments. Me, I’ll do it here. Continue reading Stump the Stammtisch: Why do an off-market deal?