What’s in a Typical San Francisco Disclosure Package?

At some point during the home buying process in San Francisco, you’ll most likely find a home that you like a lot. As in, you like it so much you could see yourself living there! In San Francisco, in strong seller’s markets, most of our property disclosures are provided to buyers prior to their submission of an offer. The disclosures are contained in a “Disclosure Package” which contains all of the various disclosure documents (almost always as a PDF file, when I first started they were paper… tons and tons of paper!). This is what people are talking about when they say they are “asking for disclosures” or are advised to “review disclosures prior to making an offer.”

A sample cover page from a San Francisco disclosure package.

A sample cover page from a San Francisco disclosure package.

The documents that are contained in a disclosure package vary based on the property type (condo, single family, tenancy-in-common), the type of sale (regular sale, short sale, trust sale, probate sale, bankruptcy sale, etc.), and several other variables (the age of the building, for example, affects whether or not some disclosures are required – examples would be lead-based paint and earthquake hazards disclosures). We are going to walk through a typical disclosure package for a single family home in San Francisco, explaining all of the documents as we go along.

To make all of this a little more concrete and a little less hypothetical, we are going to use the disclosure package for a recent listing of ours at 119 Bridgeview in the Silver Terrace neighborhood.

Below is the table of contents for the disclosure package – click on each document to learn more about it (and if the item doesn’t have a hyperlink, the article hasn’t yet been written. This is a work in progress for now!)

  • Disclosure Regarding Real Estate Agency Relationship
  • Real Estate Transfer Disclosure Statement (will be available after Wednesday 7/30)
  • Sellers Supplement to the Real Estate Transfer Disclosure Statement
  • Agent Visual Inspection Disclosure
  • 3R Report
  • 3R Disclosure
  • Preliminary Title Report
  • Preliminary Title Notice
  • JCP Report & Tax Data
  • Inspection Info & Scheduling
  • Buyer’s Inspection Advisory
  • Buyer’s Inspection Elections
  • Pest Inspection
  • Property Statement
  • MLS Printout
  • Underground Storage Tank Disclosure
  • Underground Storage Tank Inspection
  • Carbon Monoxide Saves Lives Brochure
  • SF Gen Info Acknowledgement of Receipt
  • Combined Hazards & Mandated Booklets Receipt
  • Energy and Water Brochure
  • General Information for Buyers and Sellers
  • Lead Based Paint Hazard Disc.
  • Residential Earthquake Hazards Report
  • Recorded Water Affidavit
  • Recorded Energy Work

Disclosure packages generally start with a table of contents that potential buyers are asked to sign. Depending on the property and agents involved, you may be asked to return the entire disclosure package with your signatures, or just the cover page with an agreement to return a fully executed package upon acceptance of your offer.

For our purposes, I’m going to classify the documents into two categories: Property Specific and General Disclosures. The documents that are property specific are often the *most important* because they contain information that is specific to the property you are interested in. Documents that are general disclosures are still important, but provide more general information that is usually applicable to real estate transactions and may or may not apply to the specific home you are interested in purchasing. While it is important to review all disclosures, if you find yourself with limited time, our advice is to always start with the property specific disclosures.

Freeways Ruin Neighborhoods

Once upon a time, urban planning meant destroying neighborhoods and replacing them with freeways. If you don’t believe me, do some googling and you can find the plans for a central freeway in SF that would have gone through Golden Gate Park! I don’t know the story of the 101 or much about the construction of 280, but the residential streets they abut near Bayshore Blvd. feel like a strange island of residential homes isolated by all of these major barriers.

Take a look at Patricia’s Green in Hayes Valley, as well as all of the awesome pop-up businesses (not to mention new condo buildings) in Hayes Valley, and you can see just how alive Hayes Valley is now that it is more than a freeway terminus. While I’m not suggesting tearing anything down (although, to be fair, I’m totally behind tearing down a chunk of I-280, but that’s not my idea. It’s the Mayor’s.) I think these streets are a fascinating (personally speaking - desolate and  a bit depressing) contrast to what life is like in Hayes Valley . So…

A drive to our current listing at 119 Bridgeview took my by a couple of streets that I had always been very curious about. I was early to the showing which meant on the way back I could make a detour to the area. The light was still good on the way back so I took these pictures along both Boutwell and Waterville streets.

On a real estate map, Boutwell and Waterville, as well as Charter Oak Ave., Elimara St., Augusta St. and Conkling St.  would show as being part of the Silver Terrace neighborhood, but to me they feel like a strange island that belongs to no neighborhood other than itself… (and no, I’m not suggesting a new neighborhood name. Someone else wrote that post already.) But how about we crowdsource/discover a more realistic new name – I’d love to hear your ideas in the comments!

I’m sure there’s a story of how this all came to be, either from neighborhood residents or friends of friends of… our readers (that’s you, nudge, nudge)! So if you’ve got the scoop or can connect us to the sctoop on how this particular area of SF came to be the way it is today, we’d love to hear from you. Give us a call, send us an email, catch us on FaceBook or tweet it all out to us!


What you should know about Agency Disclosure

A disclosure package in San Francisco almost always starts with a “Disclosure Regarding Real Estate Agency Relationship” form like the one pictured in this article. It’s a document that is filled with small type and lots of legal language – in other words, it is a document that tends to make the eyes immediately gloss over, which is unfortunate because of the importance of the agency relationship.

A typical agency relationship in the purchase or sale of a home in San Francisco (or California) follows the three following steps:

  1. Disclosure – this consists of presenting a buyer or seller with information about the three types of agency relationships in California Real Estate – Seller Agency, Buyer Agency, and Dual Agency. It is important to note that disclosure does not create an agency relationship. When a buyer or seller signs this form, they aren’t agreeing to any particular type of agency relationship – they are simply acknowledging that they have been provided with the information about the various types of agency relationships and the differences in each of the three types of agency.
  2. Election – There isn’t usually a form for this, but I’m sure one exists somewhere. Election of agency is typically created through the actions of the parties. In other words, if I tell you I’m going to write an offer with you after you’ve disclosed the various types of agency to me, my actions demonstrate that I have elected to work with you as a (fill in the blank with the appropriate form of agency).
  3. Confirmation – In San Francisco, this final step typically happens in the purchase contract where there is a paragraph that spells out who the brokerages are that are involved in a transaction, and in what capacity they represent the buyer and seller.
Agency Disclosure Picture

A typical Agency Disclosure form in San Francisco

Agency is one of the most important topics in real estate that gets far less attention than it deserves. That said, we’ve written about agency in the past, including the following three articles:


Single Family Homes in San Francisco Appreciated 20% in 2013

2013 was a good year to be a single family home in San Francisco – or, at least, the seller of a single family home in San Francisco!

The top line data is below, and in the coming days and weeks you can expect us to drill much deeper into the data. But here are some highlights:

  • Sales of single family homes were essentially unchanged, with 2,618 sales being reported through the SFAR MLS in 2013, compared to 2,633 in 2012. Inventory was essentially unchanged, but the number of buyers in the market was up dramatically, which leads to…
  • The median list price in 2013 was $829,000 and the median sales price was $915,000.
  • The average (mean) list price in 2013 was $1,211,642 and the average (mean) sales price was $1,295,601.
  • Depending on if you think the median average or the mean average does a better job of representing home sales, the typical single family home sold for between 7 and 10% over asking in 2013.
2012 and 2013 Single Family Home Sales in San Francisco

2012 and 2013 Single Family Home Sales in San Francisco

If we look at year over year trends, the high level data says that:

  • Median sales price was up from $760,000 to $915,000 – a year over year increase of 20%.
  • Average (mean) sales price was up from $1,103,974 to $1,295,601, a year over year increase of 17%.
  • The typical single family home in San Francisco appreciated in value between 17% and 20%, depending on how you like to measure things.

For those who have been following the market, none of these numbers should come as much of a surprise. 2013 was an incredibly strong year for San Francisco real estate, and all signs seem to point to more of the same (although, with interest rates slowly rising and the Fed finally tapering, the general expectation is for the market to remain strong but not unsustainably so).

As usual, all of our data is from the SFAR MLS, using data for single family homes in MLS districts 1 – 10 (San Francisco proper). What are your thoughts?


3 Out of 4 Homes Sell for Over Asking in San Francisco

Earlier in the week we took a look at what the largest overbids for single family homes in San Francisco were in 2013. While the numbers provide some interesting perspective, I also wanted to take a look at how common overbids have been in the 2013 SF real estate market. While most buyers are unlikely to find themselves in the position of making the largest overbid, I think their frequency can shed some light on the SF real estate market and how listing agents price properties.

San Francisco 2013 overbids for single family homes

3 out of 4 single family homes in San Francisco sold for over the asking price in 2013.

As you can see from the pie chart above, 3 out of 4 homes in San Francisco that have sold this year went over asking. Of the remaining 25% of homes that sold, just shy of 5% went for the asking price, almost 10% went for under asking by 0 – 5% of the purchase price, about 7% went for under asking by between 5 and 10% and just shy of 5% went for more than 10% under asking.

As you can see from the graph, the reality is that home buyers who have been shopping in San Francisco this past year have encountered at least one home they were interested in being in a multiple offer/over asking situation.

I’m going to dig down into the over-asking numbers in a future post to get a handle on just how far over asking most homes went, because there is certainly a psychological difference between offering $50,000 over the asking price and offering more than $1,000,000 over the asking price. In a perfect world, I’d also be able to slice and dice this data by neighborhood, but unless I get an intern for the holidays, that’s probably more number crunching than is realistic.

Finally, a note about our data. All data is from the San Francisco Association of Realtors multiple listing service. Many new construction developments are not entered either at all or completely in the MLS, however most new construction in San Francisco is for condos, so this data is pretty representative of the single family home market. The data only looks at homes located in San Francisco, so homes outside of SF that were entered in the SFAR MLS are not included in the data.

The Number One Overbid of 2013

Would you pay $1,355,000 over the asking price for a home in San Francisco?

Would you pay 292% of the asking price for a home in SF?

Over the past year, overbids have returned to the San Francisco market, and in absolute dollar terms, the largest overbid was for a single family home in Pacific Heights (Lyon at Pacific). The home has 6 bedrooms and 3.5 bathrooms, and sits on a large lot that has both views and is level enough for a basketball court. The home was also designed by a noted architect. It listed in the fall of this year for just shy of $3,900,000 and sold for $5,250,000. It sold for $1,355,000 more than the list price, which earns it the distinction of the 2013 sale with the highest overbid in absolute dollars.

This Pacific Heights home sold for $1,355,000 over the list price.

Another way to calculate the overbid is based on percentages. If we slice and dice the data to compare list price to sales price, the home in Pacific Heights is out-bid by a home in the Bayview that sold for 292% of the list price. Located on a charming street in the Bayview (yes, there really is such a thing, thank you very much), this winner listed for $189,000 early this year and sold for $551,700, which means is sold for almost triple it’s original list price!

This Bayview home sold for 292% of its asking price.

So there you have it – the homes in San Francisco with the two highest overbids in 2013. One in Pacific Heights, the other in the Bayview, two neighborhoods that rarely are mentioned for having something in common.  Although, since it is only December 9 we still have a few more weeks to see if any other monster sales come close to competing with these two homes.

I’d love to hear your thoughts about these two SF homes and the market in the comments below.

diedinhouse.com Guarantees… Nothing!

Whether or not someone has died in a home is a very legitimate question. In California, disclosure of a death on the property is required, the specific timeframes and requirements vary based on the type and nature of the death, but the general rule I learned and continue to follow is: disclose, disclose, disclose.

So you can imagine my interest when I saw a press release for a new website – diedinhouse.com – that advertises itself as “We help answer the question… Has Someone Died in Your House?”

Do Ghosts inhabit your house?

However, a little digging on the site reveals what you are actually paying for. Which, turns out, is pretty much nothing given the enormous disclaimers and terms of service that you agree to if you use their site.

Under their “terms” section they state that:

c. Site Results

The products on the Site come with a limited guarantee. You acknowledge that the service is provided “as is.” You are paying for us to conduct a search, not to return any specific result. [emphasis mine, added] The information presented on the Site is often obtained by third-parties. As such, we cannot guarantee the accuracy of information you receive on the Site. Please use caution when interpreting results from the Site. Died in House ™ does not guarantee to have all deaths that have occurred in or at a specific address; it is an informational use only type of service.  They do have over 118 million records from various sources and that number continues to increase daily.  Diedinhouse.comis merely a great tool to use to assist you with finding out if someone has died at a specific address.  It is always recommended that before anyone purchases or rents a used home, to run a Died in House ™ Report, ask the seller if they are aware of any deaths, speak with neighbors, search the address online and check government records for any information related to the property.

and the disclaimer from the website states:

he materials appearing on any Simply Put Solutions, Inc. the creators of Died in House ™ found at www.diedinhouse.com(DIH) web site and/or owned application could include technical, typographical, or photographic errors.  DIH makes no representation, implied or expressed, that all information placed on any DIH web site or application is accurate. DIH does not warrant that any of the materials on its web sites or applications are accurate, complete, or current. The information contained in the DIH websites and applications are obtained from multiple sources. DIH does not, make any commitment to update the materials. DIH prohibits anyone to use information found on any DIH web site or application to devalue or prevent any sale of property. DIH is not responsible for any loss in property value or real-estate sale of any properties.  Information contained on any DIH web site or application provides no representation as to the presence of any ghost, haunting or any other paranormal activity; or the nature of any such future activities. Died in House ™ does not guarantee to have all deaths that have occurred in or at a specific address; it is an informational use only type of service.  They do have over 118 million records from various sources and that number continues to increase daily.  Diedinhouse.com is merely a great tool to use to assist you with finding out if someone has died at a specific address.  It is always recommended that before anyone purchases or rents a used home, to run a Died in House ™ Report, ask the seller if they are aware of any deaths, speak with neighbors, search the address online and check government records for any information related to the property.  If you believe that information on any DIH web site or application is incorrect please contact DIH at info@diedinhouse.com.

So – at $11.99 per search, you are guaranteed to learn… absolutely nothing.

October Market Stats: Up!

How did the San Francisco real estate market do in October? Well, let’s just say that our weather wasn’t the only warm thing this past month. As you can see below with the narrative and statistics provided by the San Francisco Association of Realtors (SFAR), the market continues to be very strong, with low inventory and low interest rates continuing to drive demand.

Now that the baton is in grasp of the final quarter of our annual relay, it’s a good time to look back and reflect. This year has been spectacular for residential real estate. Robust gains in sales and prices were felt throughout San Francisco’s 10 Residential Districts, with median single family home prices cresting the $1 million mark in both April and May. Homes have also been selling at a fast clip, with an average of 37 days on the market.
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While consumers have felt empowered by lower interest rates, sellers are starting to regain their footing. Seller confidence is crucial to refill inventory bins, which are still relatively sparse.

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New Listings were down 7.7 percent for single family homes but increased 0.3 percent for Condo/TIC/Coop properties. Pending Sales decreased 13.6 percent for single family homes but increased 20.9 percent for Condo/TIC/Coop properties. The Median Sales Price was up 11.1 percent to $921,945 for single family homes and 13.8 percent to $865,000 for Condo/TIC/Coop properties. Months Supply of Inventory decreased 20.0 percent for single family units and 25.0 percent for Condo/TIC/Coop units.

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The economy continues to snail forward. The government shutdown had a modest impact on borrowing – mostly centered on USDA and VA borrowers. Consumer confidence is central to ongoing recovery, and confidence was hindered by the shutdown. Consumer spending accounts for roughly 70 percent of U.S. economic activity and impacts the likelihood for big-ticket purchases like homes and cars. Future shutdowns are unwelcome.

We’d love to hear your thoughts and experiences with the market below

Who the buyers are in San Francisco

A week or so ago we got an interesting question from a software engineer who was curious about where all the buyers in San Francisco are coming from?

We have a pretty good handle on who our buyers are and what they do, but we also know that just sharing our experience would make for a really anecdotal answer. We wanted to provide something more than that, but we don’t have a way of asking the entire Realtor community about who their buyers are… so, instead, we reached out to our own brokerage and agents we know… which leads to an answer that is probably still anecdotal, but hopefully less anecdotal and more fact based than if we were just sharing information on our own clients.

What do home buyers in San Francisco do for a living?

What do home buyers in San Francisco do for a living?

In the word cloud above, the more frequently a word is mentioned, the larger it appears. As you can see from the word cloud above (thanks, wordle), there are two basic sources that are funding buyers home purchases in San Francisco:

Technology & BioTechnology Industries

The tech and bio-tech industry is the largest source, with tech engineers, Apple, Genentech, Zynga, and plenty of others getting mentioned enough times that their words are significantly larger than many others. Attorneys, physicians, and business owners also rank pretty high on the list.

Wealthy Individuals

The second pool of money that is funding home purchases in San Francisco is individuals with pre-existing wealth, be it a trust fund, family wealth, or some other form of income that is unrelated to a “9 to 5” type of job situation. In my personal experience, I would say that buyers in this category include both those people who don’t live in the US as their primary residence and are looking for a secondary home in San Francisco, as well as non-foreign buyers looking for either a primary or secondary residence.

What are your thoughts about who the buyers are in San Francisco?

Is the Market Shifting?

I’ve said it before, and I’ll say it again: The San Francisco real estate market shifts on a dime. Or, to channel Heidi Klum, one day your hot and the next day you’re out.

Are things coming up roses in San Francisco?

Are things coming up roses in San Francisco?

All of which isn’t to say that the market has imploded like it did in late 2008/early 2009. But for the first time in months, I got an email from an agent with a property that didn’t receive any offers on the offer date and is now taking the offers as they come.

Before you get your hopes us as a buyer that suddenly you can start submitting offers below asking that will be accepted, there are still plenty of homes with offer dates that are getting numerous offers and going well over the asking price. In fact, I can think of a home in the Corona Heights neighborhood that went for almost $400,000 over the list price just a few days ago.

What does it mean for you as a buyer, or for you as a seller?

If you are a seller, it means correctly pricing your property is critical. Your list price needs to be realistic and grounded in comps, and preferably towards the low end of the supported value range. Price it at the high side and you’ll most likely scare off buyers who are already mentally adding a chunk of cash to your asking price…

If you are a buyer, it means that you and your agent really need to do your due diligence to determine how much interest a property actually has, and how many offers are likely to materialize. You also need to do one solid dive into comparable sales, so you can understand both what values the market is supporting and what numbers the seller and listing agent most likely have in their head.

Opportunities are out there, and as we move towards a more “balanced” market, it can create some awesome opportunities for savvy buyers!