Charlotte’s San Francisco Real Estate Blog

A seemingly boring topic; the Appraisal can be your worst nightmare. When you make an offer on a property, or if you are selling a property, as long as there is a mortgage involved, the property needs to appraise. That means that a professional property appraisor reviews comparable sales in the immediate vicinity within the last three months and compares your home or the home you want to buy to those properties.

What happens if the home appraises for LESS THAN your offer price? The Bank will only loan to the appraised value of the home. At this point, you can:

1) make up the difference to the seller out of your pocket

2) ask the seller to reduce the price of the home to the appraised value

3) walk away from the deal

4) Ask the bank to get another appraisal done (you will be asked to pay for this)

Does an low appraisal mean the home is worth less than what you offered to pay?

Not necessarily. There are a lot of appraisors working in areas they are unfamiliar with, thanks to the new “RESPA” laws, passed in January, 2010, the goal of which was to safeguard consumers. That’s not exactly how it’s turned out.

Hey! Blog World, I am back.

I got really busy selling houses. Then nobody ever emailed me to say they noticed I wasn’t blogging. Then my fiance told me he missed my blogging. Then a friend asked me why I stopped. So I felt a little better. My Diva writer’s ego was fed enough to come back to my loyal two readers.  If you like what I do, please let me know. I am not indefatigable; I am just a tired  & busy realtor. I want to shout and sing out about Bernal Heights. I live here! I love it. It’s sunny. It’s incredibly easy to get anywhere North, South, West, East from my neighborhood. I love Holly Park. I love Bernal Hill. Fourth of July there were thousands of people up there in the dark trying to see fireworks. We couldn’t, really, but it felt nice to be outside at night with a bunch of happy people just trying to celebrate our country, or maybe just to see things explode.  We have a cool new bakery (The Sandbox Bakery; serving up pastries and bento boxes!)  on Cortland, and a really neat new mini-mall that harkens back to the Middle Ages- which I find cool- it’s little stalls doing different artisanal foods and a knife sharpener. I half expect to find freshly milked cows or goats in there. Come see for yourself.

I want to mention a few great family homes under $700K while I am at it:

4145 Folsom St. is a 3 bed, 2 bath home with a sunny deck and yard listed for $699K. You can not see the highways; and it is walking distance to both the Allemany Farmers Market and Cortland. I will be holding this house OPEN Sunday 2-4pm. Come visit me!

Also interesting is 431 Joost Ave. While located in the less-sunny “Sunnyside,” it is also a great home, and priced aggressively at $619,000. It is a regular sale, and is close to the Glen Park Bart Station.

Happy Fourth of July to all my fellow citizens! I love the Fourth. I love the idea that we are all in this together, and that we make joint decisions with 400,000,000 other people about how we are going to handle our affairs.

Now Credit Scores. Let me gently inform you: if you are applying for a loan with someone else, say, your husband or wife, the bank will use the person with the lowest credit scores “middle” score. (there are three credit bureaus; the middle score is the middle number reported) The person with the higher score’s credit basically counts for nothing; zero; nada.  I firmly believed that the “Credit Score Repair” companies were massive frauds, but I have changed my mind. Many of them are, but not all. I recently have come across a company that can fix errors and do what’s called an Instant Repair with all three credit reporting bureaus. They can also work on real credit lapses depending on how old they are to have them removed, and you can possibly have an improved credit score within a week to ten days. And, as you know, the higher your score the better your loan rates. Happy Fourth and Be Careful With Your Credit! Please call me or email with questions on this topic or for a referral to a Credit Repair company. 415-279-0289 or charlotteerwin@zephyrsf.com.

  McLaren Park in San Francisco

People are strange, and I put myself right in the mix when I say that. The specific strangeness I refer to here is the general dissing that the Viz Valley neighborhood gets. As a matter of disclosure, I have no listings in Viz Valley, now or in the near future I know of, so I have no personal incentive to sing its praises.

I see home after home there like 231 Teddy Ave., which features 3 bedrooms, 1 bath, laundry, a large garage, and views of the San Bruno Hills and the Bay.  231 Teddy has unbelievably lovely, wide plank wood floors, with a living room and dining area off of the kitchen, plus is close to freeways and the Third Street Muni line for $475,000. The neighborhood is quiet. Its a few blocks away from Mansell Ave, The Grateful Dead Auditorium in McLaren Park, and, well, McLaren Park.  

660 Campbell Ave: $678,000 4 bed 4 bath built 2008; 2600 Sq. Feet per Seller

116 Teddy Ave: 3 Bed 3 Bath, 1050 Sq. Feet per MLS for $485,000

77 Cielito Dr. $380,000  2bed, 1 bath

These homes are all regular sales; not short or possible short; just great homes at great prices in a very nice neighborhood.

A posting I shall go. I have been wassailing, I have been ice-skating, I have been a-shopping and a-eating; I will be a-drinkin’ for New Year’s Eve, and I have been a-searchin’ for real estate dealios for my readers and my clients. Yes, low though it has been the holiday season, I have seen some amazing deals out there. How about a 5 bedroom condo in great condition that is NOT a short sale for $284,000? It is yours for the bidding. In San Francisco, no less. How about a two bedroom, 1200 square foot condo with new carpet and paint in Potrero for $387,000? Also not a short sale? It is yours for the bidding.

Or a two-bedroom, two bath home in Noe Valley with a legal in-law 1 bed 1 bath for $797,000? Yup. All there.

Pictures to be posted imminently. When everyone is heading for the exits, whether it be from financial panic or because they want to gorge themselves on holiday cookies and forget about housing for a while, this is the time to get a BARGAIN. My grandmother, Dorothy, who is 97 and with it as hell, loves to spell out words as she talks to you for emphasis. She would have said, “Get out there and find yourself a B-A-R-G-A-I-N while everyone else is pigging out for the holidays.” That is indeed how she would express it. Sellers know there are precious few buyers at the holidays (who wants to move now?) and are much more likely to make a deal with you.

And as the New Year begins, can we also please review the kinds of SHORT SALES I Like? I want you to only look at Short Sales if they are BANK-APPROVED. Call me if you need further clarification on Short Sales or on why a Bank-Approved Short Sale is indeed worth your time.  What else do we like? REO’s. That right, R-E-O’s. And that does not stand the Band REO Speedwagon, although I nor anyone I know can tell you what the heck REO stands for. It means Bank-Owned, and these properties, though sometimes needing repair, are usually discounted to the comparable homes in their area. Why? Because there’s only one thing banks hate more than having loans go bad is becoming landlords. They do not want to own real estate. Trust me, they’ve got plenty.

For help with your real estate questions, please call or email me: charlotteerwin@zephyrsf.com; 415-279-0289.

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Financial Contingencies must be a part of any offer to purchase real estate. As we all know, Banks are not our friends. Toasters and “What are you doing for fun this weekend” from the endlessly perky Wells Fargo tellers aside, any lender’s job is to protect the bank from risk. This may include changing the rules of the road, or the loan requirements pertaining to your loan even after you’ve gotten your approval letter.  But let me back up, in case you would like a review of what the Loan Contingency means.

A loan contingency is fairly straightforward, initially. It states that you are not obligated to purchase a property unless you are able to obtain a loan in the amount that you’ve said you need to borrow. So far so good. Your agent will usually put a loan contingency removal date of somewhere between 20 and 30 days as a part of your offer. During that time, the bank is ordering the property appraisal and demanding lots of information from you to verify income, assets, and the like. What has become the new normal and what troubles me deeply, is that your loan is actually never guaranteed to fund by your bank until it does. Really. A Bank of America loan officer who must remain nameless cheerfully agreed with me that my buyer is hugely at risk without the contingency in place and that Bank of America absolutely does not provide written assurance that any loan will fund.

 At any point in the process, up to the day you’re supposed to sign the documents, they can and do bring up new issues that may or may not be resolved to their liking. And if they aren’t, then no loan. Meanwhile, you signed off on the loan contingency waiver after you got the verbal go-ahead from your loan officer or mortgage broker and you are now on the hook to buy that property. Well, that’s ridiculous, says you, because obviously I can’t buy the property without the loan. Right. So the Seller is now entitled to keep your Good Faith Deposit. Now, an arbitrator may ultimately decide in your favor, but your cash can be tied up for months while the whole thing gets arbitrated. Ouch!!!

I asked Ilse Cordoni, President of the San Francisco Realtor’s Association what to do about this seemingly unfair degree of risk being born by you, the Buyer. She says that while most of the time things work out and the loans fund, it has happened that they do not and there’s not much we can do about it. The best suggestion is an offer that had a loan contingency that remains in place until the loan funds, but unfortunately that’s not an offer many sellers would accept.

What’s a Buyer to do? Stall! Stall stall stall. I avoid releasing the financing contingency until there’s some degree of mutual understanding between the loan officer and I that unless Hell Freezes Over and The Crick Runs Dry, the loan’s gonna fund.  Until I am at risk of being “kicked out of contract,” I want to make sure that you are as approved as you can be. Please don’t tell anyone!

For more information on writing offers, protecting your deposit, or purchasing real property in San Francisco, please email me at charlotteerwin@zephyrsf.com.

http://online.wsj.com/article/SB126022588878780861.html?mod=WSJ_hpp_RIGHTTopCarousel

The upshot of this in-depth piece on buying homes at Auction is that it is not easy nor necessarily profitable. I received a call from a teacher here in San Francisco who was convinced that the only thing that makes sense is buying foreclosed property at auction. Never having bought a foreclosed property at auction, all I could do was tell her what I’ve been told. So I was happy to see it in print in the WALL STREET JOURNAL, which still carries a fair amount of weight for me. Here’s a sampling of the obstacles in your path should you want to try this:

1.) You will be competing with full-time professionals.

2.) Those professionals most often are buying for groups of investors, and they have lots of cash.

3.) You need to pay cash, as in, for all of it. No loans.

4.) You can not inspect the property prior to the auction, so you have no idea what shape its in. And here’s a clue: People who have lost their homes are often unhappy about that fact. Otherwise good people sometimes do bad things when confronted with complete financial meltdown and the loss of their home.

5.) Legally, the previous owners have anywhere from six to eighteen months to leave, during which time they can, in some cases, bring their mortgage back to good standing. If the home is occupied, good luck getting those folks out.

6.) And here’s the piece that makes the least sense to me: Do you really think you can buy a house at auction and flip it next week after painting it and earn $45,000? If that were true, why wouldn’t the current owners sell it themselves and avoid being foreclosed on? Even the Journal article makes it sound like people everywhere across our great land are buying foreclosed property and flipping houses at great profit. After having bought, fixed, and sold 7 properties in four different major cities, I beg you not to think you’re smarter than the market is. You may get lucky once or twice, but it is tough to make money doing this.

In summary, I believe this is a form of gambling no different from betting the tables at Vegas. There is a high people get from buying at auctions. If you want to gamble, I recommend taking whatever amount you can afford to lose, going to Vegas or the Casino town of your choosing, and gambling until your money is gone. At least you will have a blast doing it and not wind up with toilets full of cement.

For questions on real estate, or for help buying or selling your home, please contact me at charlotteerwin@zephyrsf.com

I am going to diverge from my normal subject matter to comment on this weekend’s box office experience at “New Moon.” Having missed the Beatles, I had not experienced the raw power of teenage girls going batty (pun intended) over vampires and werewolves or anything else until seeing “New Moon” with my fiance and his daughters over the weekend. It was an amazing experience, though not due to cinematic excellence. It was the screaming, the hyperventilation, the giggling, the raw desire that those 14 year old girls were experiencing that was the EXPERIENCE.  While in the loo, a gaggle of girls came in whom I honestly thought needed medical attention, so shallow their breathing, their crys of anguish so jaggedly real. It was only their hysterical laughter that made me snap back to reality and the understanding that it was not impending death but Taylor Laughtnor’s abs and Robert Pattinson’s smolder that had the girls whipped into their oxygen-deprived frenzy.

How do I say this without sounding like a snob? Well, probably there isn’t a way, so I’ll just say it: Stephanie Meyers is no Shakespeare. She most likely will not become a regular contributor to The New Yorker anytime soon. But perhaps the message is that box office success does not require a Masters in Fine Arts or Creative Writing. Perhaps we all need to listen to our dreams and risk the foolishness of a few months “wasted” writing them down.

Bill Gross, the lauded fund-manager of Pimco Funds, is a good writer. He also has consistently outperformed the market with his family of funds. Here’s his take on why interest rates are going to stay low for the forseeable 12-18 months:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2002/IO_03_2002.htm