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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

Rainy days are good days for home buyers

Posted on Patrick Lowell

If you’re a home buyer, the thought of touring beautiful homes on a gorgeous sunny spring day sounds like a dream, right? I mean, who wouldn’t want to visit beautiful homes basking in sunshine, surrounded by blooming flowers and chirping birds? But hold onto your umbrellas because I’ve got a hot tip for you: if you are searching for a home to buy, touring properties in the rain might just be the investigative adventure you need to try. Here’s why a rainy day tour could be your secret weapon in the home-buying game.

Generally speaking, rain should slide off the roof, down the gutters, and away from the house, right? Well, sometimes water doesn’t go where we expect it to go and you end up with ponding – basically water without a getaway plan. That water can sneak into all sorts of places it shouldn’t, like walls, foundations, garages, and basements. Nobody wants that! So, while you’re scoping out your potential new home, keep your eyes peeled for any suspicious puddles lurking around the place.

Rainy days are like a truth serum for spotting leaks. Just glance up at the ceiling and skylights as you wander through. If you notice any funky patches or paint variations, it might be worth asking about.

When the weather is wet, that usually means fewer crowds, so you can explore the home without feeling rushed. Plus, the seller’s agent is more likely to be free to answer questions.

Remember that you’re stepping into someone’s home on a rainy day so be mindful of your muddy shoes.  Most listing agents will have a spot for wiping your feet or even some snazzy shoe covers.

I’m not a home inspector, but I’ve attended more inspections than I can count, and I’ve picked up some things along the way. If you’re hungry for more house-hunting wisdom, please reach out. I’m here to provide guidance and help you get your dream home. Let’s make this journey fun and stress-free!

Buy now or wait?

Posted on Patrick Lowell
When is the right time to buy a home?

The Federal Reserve recently announced that rates are expected to decline in 2024. This is very welcome news for the many prospective buyers who have been sitting on the sidelines waiting for mortgage rates to drop below 7%. Experts believe that those buyers will come flooding back to the market as soon as mortgage rates get to the 6% range. This means that buyer demand for available homes will increase significantly, which in turn will drive up home prices (again), especially in inventory-strapped areas like Northern California.

Before that happens though, some saavy buyers are realizing that now may be the right time to make an offer on a property while most of the competition are waiting for rates to drop. Although it is true that mortgage interest rates may be higher at the moment, the purchase price will probably be much lower than it would be after rates decline and demand goes back up. Many mortgages can be refinanced after 6 months, so it may make sense to lock in a good deal on a purchase price now and refinance in 6 months. Call me or talk to your mortgage pro to discuss this strategy. It’s always tough to time a market, but for those who are watching, I believe that there are signs along the way that indicate where the opportunity may be. Whether you are considering buying a home in San Francisco or Sonoma Wine Country, I’m here and ready to help.

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.