Lies, Damn Lies, Statistics

Unless you know about the data behind the data, most SF real estate charts probably doesn’t mean what you think they do. For example: Is a condo or a single family home in San Francisco more expensive?

We love data! We wrote a neighborhood by neighborhood guide to 2013 sales prices, crunched the numbers to compare MLS and off-MLS sales, and just today posted our 2014 Luxury Condo building survey. At this week’s sales meeting, the below graph was shared by the management team and I think it is a great example of how a chart usually raises more questions than it provides answers:

Condos vs SFR: Accurate or Not....?
Condos vs SFR: Accurate or Not….?

I had a few quick thoughts when I saw the above chart:

  • What about district 10?
  • How big?
  • BMRs?

District 10 is the most southern part of San Francisco, and essentially is the area south of 280 and north of the county line. It is home to some of San Francisco’s poorest and least-safe neighborhoods. The housing stock in District 10 is also almost exclusively single-family homes – I can think of one big condo project in the entire district….

The chart above also doesn’t take into account that single family homes are often larger than condo homes. Which leads to my charts!

Finally, I wasn’t sure if the above chart filtered out BMR and senior-only condos that have price or other restrictions that would weigh down the average condo price…

In my years of being a San Francisco Realtor, I’ve seen plenty of people actually prefer a condo to a single family home for a variety of reasons, and while I work with plenty of buyers that want a single family, I work with just as many people that are indifferent to condo or single family and a sizable number that don’t want a single family home.

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Based on my calculations, the median price for a condo is slightly higher than Zephyr computed – so those BMR and senior condos had brought the average down by a bit (about $20,000). And look – single family homes are bigger than condos! And look – if you take out district 10, it reduces the number of single family homes by 45, while the number of condos is only reduced by 4. In other words, District 10 is all about single family homes, and often single family homes at the lower end of the price range.
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In absolute price dollars, a single family is more expensive than a condo. But if we look at price per square foot, condos actually are more expensive. Across the city, the median price per square foot for a condo is about $917/square foot while a single family home comes in at $785/square foot.
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When we take out District 10, single family homes get a lot more expensive and condos are unchanged:image (4) On a price per square foot basis, taking out District 10 puts single family homes and condos almost on price parity. But condos still come out slightly more expensive on a price per square foot basis. image (6)

 

What you Need to Know About: Agent’s Visual Inspection Disclosure (AVID)

As one of my favorite brokers once joked, an agent visual inspection disclosure (AVID) is a visual inspection that an agent can do in heels. The point being that both individual sales agents in a transaction (the listing agent represent the seller and the selling agent representing the buyer. If it is dual agency, both individuals must still produce their own visual inspection disclosures, if one individual is representing both parties, you would only expect to see one AVID form) are required to perform a visual inspection of the property, but neither is expected to show up in overalls, ready to crawl through crawlspaces or stick their head in attics or in downspouts.

// This post is a part of our series: Your Guide to a San Francisco Disclosure Package. //

The Agent Visual Inspection Disclosure (AVID) is a *property specific* disclosure. Read it as soon as it is available.

AVID - Agent Visual Inspection Disclosure Form
AVID – Agent Visual Inspection Disclosure Form

Here’s the thing to remember about an agent’s visual inspection: We aren’t licensed contractors, which means we aren’t qualified to diagnose what we see. Our job is to note what we see at the property that is unusual or stands out to us – the idea being that since we see lots of homes as part of our job, the things that stand out might be important things for the buyer or seller to be aware of.

That said, at every risk management seminar I’ve ever been to I’ve pretty much heard the same instructions/advice from a variety of real estate attorneys: describe, don’t diagnose. Which means a good AVID will state things like “cracks visible along wall” instead of something like “hairline cracks caused by settling visible along wall.” An agent isn’t typically qualified to diagnose the underlying cause of a visible issue.

It is also important to remember that an agent doesn’t move furniture, look underneath things, move piles of stuff or otherwise try and take apart the home.

An agent’s visual inspection is not a substitute for an inspection by a contractor or other licensed home professional – it is simply a “once-over” list of things that were readily apparent to the agents involved in a residential real estate transaction. It is also important to remember that if you are purchasing/selling a condo home, the AVID does not include any of the common areas – it covers the condo home itself, not the common areas that accompany ownership of the condo.

What You Should Know About: Seller’s Supplement to the Real Estate Transfer Disclosure Statement

The Seller’s Supplement to the Real Estate Transfer Disclosure Statement is a local supplement that works in conjunction with the Transfer Disclosure Statement (TDS). It varies by area in California, here in San Francisco we use a local supplement that is created by the San Francisco Association of Realtors.

// This post is a part of our series: Your Guide to a San Francisco Disclosure Package. //

The Seller’s Supplement to the Transfer Disclosure Statement is a *property specific* disclosure. It is designed to be read in conjunction with the Transfer Disclosure Statement (TDS) and we absolutely suggest it as one of the most important documents you review in a disclosure package.

Page 1 of the San Francisco Seller's Supplement to the Real Estate Transfer Disclosure Statement
Page 1 of the San Francisco Seller’s Supplement to the Real Estate Transfer Disclosure Statement

Section A of the seller’s supplement to the TDS asks additional questions about the property and neighborhood, and just like the transfer dislcosure statement it consists of a series of “Yes/No/Don’t Know” questions, with space provided for the seller to provide narrative detail when the answer to the question is “yes.”

Section B has additional questions about the property and improvements made to the home, including questions about permit history, animals, deeaths on the property, and other items.

Section C is an area where the seller can list additional home reports that are available. Even when additional reports are available, in San Francisco the seller may or may not remember to list them in this section. The cover page of the disclosure package in San Francisco is the best index you can typically use to keep track of reports provided by the seller.

Section D of the seller’s supplement to the real estate transfer disclosure statement has questions that pertain to homes that are in condominiums, cooperatives, common ownership or neighborhood associations. It contains some general questions, and then also questions that are specific to property type.

Section E is dedicated to the property eviction history, because in San Francisco eviction history can play a key role in helping determine the value or desirability of a home for sale.

Section F is for multi-unit or tenant-occupied properties, and contains additional questions that pertain to local San Francisco landlord/tenant laws.

Section G, the last section of the San Francisco seller’s supplement to the real estate transfer disclosure statement, is a free-form response area that a seller can use to provide any additional comments, notes, or information about the home they are selling.

What questions do you have about this document or SF disclosure packages?

 

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 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: