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Rainy days are good days for home buyers

Posted on Patrick Lowell

rainy

It’s been so rainy lately!  This is obviously good news since California is in a major drought. We simply need the rain.  If you are in the market to buy a new home or condo though, there’s another benefit to the wet stuff falling from the sky. Touring your dream home on a rainy day can tell you a lot about your prospective home before you submit an offer.

Probably one of the last things you want to do is go out and look at homes in the rain. If you’re like most people, you want to see houses on a sunny spring day, where flowers are in bloom and birds are singing. Visiting a house on a rainy day however can sometimes be much more informative, here’s why:

Ideally when rain falls, it runs off the roof in to the gutters and eventually flows away from the house through a drain or pipe to the street or sewer. Given the hilly terrain in San Francisco, older housing stock, and densely packed neighborhoods, heavy rain in San Francisco sometimes leads to “ponding” or standing water with no place to go. Standing water tends to seep in to places it should not be (like walls, foundations, garages, or basements). Keeping water away from your home is important to help prevent issues like dry rot, wood boring beetles, foundation deterioration, termites, and mold. So while checking out your new prospective house, always keep your eyes open for standing water around the outside of the home or in the garage or basement.

If the roof or skylight needs repair, there will probably be some visible signs of a leak. Be sure to look up at the ceiling occasionally as you are walking around. If you see signs of a previous ceiling repair or variations in the ceiling paint, it may be worth asking about. There is  another bonus of visiting open houses on a rainy day…it’s likely that there will be fewer buyers milling around. That gives you a chance to take your time and look around without the crowds. The seller’s agent may also be more available to speak with you and answer questions since there will be fewer people around.

(Pro tip: Remember to be courteous and not track in mud or rain when you enter an open house on a rainy day. The seller’s agent likely will provide a spot to wipe your feet or have shoe covers handy).

I’m not a home inspector, but I’ve been at hundreds of home inspections with clients and have picked up a few tips along the way. I have many more home buying tips to share. Feel free to get in touch!

What is a disclosure package?

Posted on Patrick Lowell

If you  have spent more than a day searching for a place in San Francisco, you have probably heard the term “disclosure package”.  When a seller prepares their home for sale, they are guided by their listing agent through an important but rather lengthy disclosure process. As the name implies, disclosures are documents that give prospective buyers more information about a particular property. If the seller knows of a material fact about a home, they are obligated to tell the prospective buyer about it.

The contents of a disclosure package usually include a variety of statements and mandated reports.  Often these include: home inspection report, termite inspection report, preliminary title report, history of permits, natural hazard report, condo rules & restrictions, underground tank inspection, seller’s transfer disclosure statement, and many more.  Most residential sales in SF are “AS IS”, meaning that the buyer is taking the property in it’s current condition and accepts the disclosures as they are, including the imperfections.  It is therefore very important for buyers to read and understand the entire disclosure package before submitting any offer.  Sellers are wise to disclose everything to buyers in advance to avoid any re-negotiation resulting from undisclosed issues during the inspection and sale process.

If you have found a property you love, your agent can get the disclosure package for you, just ask.  Keep in mind that packages can be 100-300 pages in length, so you may want to be careful how many you request.  Interestingly (at least to me), SF is one of the few cities where sellers and agents prepare a disclosure package up front before a home hits the market. Real estate custom in most other cities is that agents and sellers wait until a buyer is in contract before they prepare the reports and disclosures.

A sample disclosure package cover sheet:

sample dp cover sheet

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.