Watch our Buyer Get Keys to her family’s new home

Our client, Ceci, opens the door to her family’s new home for the first time in this video. Watch our client a home buyer get keys:

Thank you to Ceci for documenting and sharing your family’s journey with us. I feel privileged to have you as a client but also as a dear friend. Oh, the memories…!

I can’t wait to be a part of a few beautiful-moments-yet-to-arrive at your family’s awesome new home.

With deep affection,


PS – This really was an incredible team effort. Thanks to the phenomenal SF mortgage broker team at Opes led by Tracy Andreini and also to a consummate listing agent, Alan Khoo with the JODI Group.

San Francisco Leads the Region as Top City for Rental Real Estate Investment

It is undeniable that San Francisco is a great place to live. Vibrant neighborhoods, an exceptional art and cultural scene, fantastic restaurants, world-class shopping and a stunning natural landscape have all helped San Francisco secure a place among the top cities in the country. With the release of the All Property Management Q2 2014 Rental Ranking Report, the City by the Bay can also add being the No. 1 city in the region – and No. 3 in the country – for rental real estate investment to its list of accolades.

Saving money

The Q2 2014 Rental Ranking Report looks at metrics including vacancy rates, capitalization rates, home value appreciation, annual job growth, rental rate variance, and average days a property sits on market for 75 Metropolitan Statistical Areas to determine the top U.S. cities that are poised to give investors the highest return on their rental real estate investment. San Francisco took the top spot regionally, beating out cities such as San Jose, Seattle, Denver, and Los Angeles, while coming in 3rd only to Grand Rapids, MI (No. 1) and Poughkeepsie, NY (No. 2) in the country.

San Francisco Boasts High Rental Rate Variance to Secure Top Ranking 

With rising San Francisco rental rates a main topic of conversation in the community, it will come as no surprise to locals that the city does quite well in the rental variance metric. In fact, with an 8.44 percent increase in year-over-year rental rates, San Francisco takes the No. 1 spot for rental variance among the 75 cities studied, according to the report. While performing generally well in most categories, this rental rate variance certainly helped San Francisco clinch the top regional spot.

San Francisco also boasts one of the lowest vacancy rates in the report at 4.9 percent (giving it a 10th place ranking in the country) and a good home value appreciation rate of 4.95 percent year-over-year. What might surprise you, however, is the city’s relatively low capitalization rate. The “cap rate,� which compares average property value to average rental rates to determine how profitable a rental may be, is 4.07 percent in San Francisco. This is the second-smallest cap rate in the report. By comparison, Grand Rapids, the No. 1 ranked city in the U.S., offers a cap rate of 9.64 percent. The low cap rate is partially fueled by San Francisco’s high property values.

If you’ve been sitting on the fence toying with the idea of buying San Francisco rental real estate, the All Property Management Q2 2014 Rental Ranking Report suggests you should make a move. Opportunity is waiting – will you take advantage?

This is a guest post from All Property Management.

Founded in 2004, All Property Management helps property owners maximize their rental income potential by connecting them with the largest network of property management services on the Internet. As part of that work we track a number of different metrics, from rental vacancy rates and home values to regional job growth, for 75 different metro areas in 5 regions of the country. We use that data, along with input from our nationwide network of over 5,000 property managers, to produce our quarterly Rental Ranking report, which measures a city’s attractiveness for real estate investment.

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.
image (3)

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.
image (5)

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 Should Know About the SF 3R Report

The 3R report is issued by the San Francisco Department of Building Inspection (DBI) and provides a building permit history for a San Francisco property. It is a required disclosure for almost every purchase/sale transaction in San Francisco, with the exception of brand new construction, in which case the CFC (certificate of final completion/certificate of occupancy) usually fills in.

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

The SF 3R report is a *property specific* disclosure. Read it as soon as it is available, even if the city doesn’t stand behind the information it provides.

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A 3R Report issued by the SF DBI

The 3R report is a report of residential record, and it contains information about original and current use, as well as a list of building permits and their status (I = issued, N = no job card found, X = permit expired (work not started or not completed, C = completed). Here’s a handy explanation of terms used in the 3R Report by DBI. It is important to note that the 3R only contains a record of building permits. It does not include plumbing or electrical permit information.

SF DBI has an online portal where you can view a lot of property information online. The DBI website allows you to view building, electrical, and plumbing permits that have been issued since the mid-1980’s (roughly), but does not include any permits older than that. Because the city is incredibly slow at processing 3R requests (inefficient or understaffed, depending on who you ask), it can often be helpful to look up a property online. But be aware that the online record history is not complete.

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The boilerplate warning about inaccuracies in the 3R

The 3R report comes with a warning document that doesn’t inspire much confidence in DBI. Even though the report costs $165 (as of August 2014) and is mandated by city law, the building department has no obligation to get anything on the 3R report correct. In addition, DBI does not warrant the data that they do provide, and as the warning document says:

“Buyers of residential real property in San Francisco should never rely on information contained in 3-R Reports.”


In a perfect world, the 3R would provide a buyer with an accurate and complete permit history (so that buyers can understand what work was done with or without permit), as well as accurate information about the current use (it matters for unit buildings that want to condo convert, to name just one example) of the property. But our world is far from perfect – we have a variety of strategies for helping deal with 3R issues and the questions the document generates, we hope this overview gives you a better understanding of this important disclosure document.


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?