Buying a home is typically the largest, most complicated, and often most emotional financial transaction of one’s life. There is a lot at stake, not just money but also issues such as security, happiness and everything else wrapped up in the concept of “home.” One of the main reasons why it can be so stressful is that one’s agent never explains how the process actually works step by step, what the decision points will be and the options one has at each step. When one understands the process and has a sense of control over how it will proceed, much of the stress is alleviated.

Below is a simple graphic that generally outlines how one thing leads to another from first beginning the search for a new home to having the keys to the front door put into your hands. It’s relatively self-explanatory, but will make even more sense when reviewed with your agent. Remember that you are the sole decision-maker throughout the process: a good agent renders honest, experienced counsel and helps manage and coordinate everything that needs to happen, always with an eye to protecting your interests, but never presumes to make decisions for his or her client.

The quality of the agent working on your behalf, his or her competence, integrity,
work ethic and commitment to your interests can make an enormous difference
in the outcome of your home purchase.

Later this week on Parascope we will feature our New Home Developments Interactive Map –stay tuned!

This map of San Francisco neighborhoods is according to the San Francisco Association of Realtors district and sub-district, Multiple Listing Service (MLS) specifications. Real estate values and prices, property types, age of construction, architectural styles, views, amenities, commercial districts and home sizes can vary widely between different neighborhoods. Indeed, San Francisco is more a collection of delightfully different neighborhoods than a homogenous entity.

If you adjust your screen view to a zoom of 125%, the map will be that much easier to read. If you click on the “Explore” tab above you will find more information about SF neighborhoods; if you click on “Home” you can quickly search for properties by neighborhood; and if you click on ”Market Dynamics” and then “Neighborhood Values” you’ll find analyses of home prices by neighborhood. Please use the “Contact Us” link if you have any questions.

SAN FRANCISCO REALTOR DISTRICTS

District 1 (Northwest): Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain

District 2 (West): Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights

District 3 (Southwest): Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview

District 4 (Central SW): St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands

District 5 (Central): Noe Valley, Eureka Valley/Dolores Heights (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights

District 6 (Central North): Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights

District 7 (North): Pacific Heights, Presidio Heights, Cow Hollow, Marina

District 8 (Northeast): Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin

District 9 (East): SoMa, South Beach, Mission Bay, Potrero Hill, Dogpatch, Bernal Heights, Inner Mission, Yerba Buena

District 10 (Southeast): Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission

Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which includes both Russian Hill and the Tenderloin.

Many items that may be done cost comparatively little, and yet may dramatically enhance market response and value. However, from basic cleaning to full staging, anything that appears likely to add significantly more value (in achieved sales price) than what it costs to perform is worth your consideration.

Remember that most buyers and agents have little imagination: If a property looks appealing, they respond well, and if it doesn’t, they simply walk away without even thinking of simple remedies.

The options below range from items that every seller should undertake or at least seriously consider – because the return on investment is so clear – to options that may or may not apply to specific properties or make sense to specific sellers.

• Thorough, professional cleaning of the entire house, including carpets, hardwood floors and windows. The kitchen and bathrooms, in particular, should look pristine for all showings.

• Fresh interior paint, especially of main rooms, with light, neutral colors. Perhaps the best investment a seller can make.

• Flower boxes for steps, walkways, patio, deck and/or exterior windows: it is incredible the effect this makes on buyers and the value this can add.

• Remove clutter from shelves, tables, counters and desk tops, closets, refrigerator, bathroom cabinets, garage, basement and attic.

• Remove unneeded or unattractive furniture to open up the room and make it appear larger.

• Set the dining room table as if for an elegant dinner party.

• Maximize light and enhance views as possible: new lamps, brighter light bulbs, adjustments to drapes and blinds, tree trimming. Minimize unpleasant views with decorative screens, window treatments or glazed windows.

• Change the use of rooms to enhance value—for example, from child’s bedroom to adult’s bedroom, exercise room to media room or office, recreation room to den/library, basement to workshop.

• Replace selected pieces of furniture or area carpets.

• Fully stage selected main rooms, such as living room, formal dining room and master bedroom—a less expensive alternative to staging the entire house.

• If necessary, consider wholesale carpet replacement, or the addition of area rugs. If there is hardwood flooring under carpeting, consider carpet removal and floor refinishing. Purchase new doormats and carpet runners.

• Stage back patio, terrace or deck to look inviting; power wash or re-stain decks.

• Stage the fireplace, bookshelves, hutches, coffee tables and end tables.

• Order pre-sale pest and contractor inspections: remedy specific deficiencies as reasonable and cost effective. Get estimates for those major repairs you will not be undertaking. (Reports and estimates will be provided to prospective buyers.)

• Make miscellaneous small repairs, especially those that improve appearance: replace broken windows and old light-switch plates, fix leaky faucets, touch-up paint.

• Yard, lawn and garden work: weed, plant flowers, mow, trim shrubs and hedges; if necessary, re-sod lawn.

• Fresh exterior painting, especially of the front of house, front door and/or front fence.

• Re-glaze sinks and bathtubs; fresh grout in bathrooms.

• Make pet arrangements for showing times and open houses; if possible, relocate pets for duration of showing period. Hide litter boxes and pet beds.

• Have your home photographed by a professional real estate photographer once preparations are completed. The vast majority of potential buyers will first see your home through its photographs, and then decide whether to come see it in person.

• To consider, if feasible: moving out for first week or two of intensive showing—sometimes sensible for Sellers with young children.

You might consider hiring a staging consultant, whose entire experience and only job is to help sellers identify options to enhance value.

One of the classic seasonal trends in real estate is the decline in the number of luxury home sales in the first and third quarters, because the higher end of the market has a greater tendency to check out for the holiday seasons. This is a major factor behind the typical decline in median sales prices during these periods, as referred to above. Though luxury property sales were far above recent years, this decline in unit sales occurred in this past quarter as well. If market conditions and seasonal trends hold true, we should see a big uptick in luxury home sales in the new quarter just begun.

3rd Quarter Home Sales Snapshot
These statistics for the third quarter indicate a market that is still extraordinarily strong by any historical measure: 87% of home sales sold quickly without price reductions, at an average of almost 8% over asking price. It did cool down somewhat from our insanely frenzied spring season, but part of that is explained by the typical summer slowdown dynamic. How the market performs in the next two months will tell us a lot about whether the market is settling down, transitioning to a new phase or continuing to race along in high gear.

San Francisco Median Home Sales Prices
It’s not unusual for median prices to fall in the first and third quarters (affected by winter and summer holidays) and rise in the second and fourth quarters (prime spring and autumn selling seasons). This is what happened in this past third quarter and it typically has more to do with seasonal factors than changes in market values. One has to look at the longer term trend, not monthly or quarterly fluctuations, to determine what’s really happening in the market. For the last 6 quarters, the overall trend in home prices has been upward. For median price by district, visit our interactive map.

Inventory of Homes for Sale
The inventory of active homes for sale gives an idea of the choices a homebuyer has on any given day. September did see a spike in the number of new listings, but it wasn’t anywhere as big as we had hoped for.

Months Supply of Inventory (MSI)
MSI did climb in September due to the increase in the number of new listings — which is typical for September. Usually, MSI drops again in October as buyers snap up those new listings. Even with the increase, the reading signifies a strong “sellers’ market.”

Depending on your circumstances, plans and current market conditions, renting one’s home instead of selling it may certainly be an option worth considering. Owning rental property may be a viable investment choice for you. However, there are additional factors to keep in mind as you make your decision.

1. In San Francisco, renters often reduce property value for the following reasons:

• Rental properties rarely show as well as owner-occupied properties and renters often neglect basic upkeep and maintenance.

• If your property is subject to SF rent control/eviction limitations – which most properties built before 1979 are – evicting tenants or paying them off to move without eviction in order to sell the home later may be prohibitively expensive, take long periods of time or even be impossible. (You should consult a landlord-tenant attorney.)

• SF tenants under the rent control ordinance are now owed relocation fees upon eviction – thousands of dollars per tenant. Buyers will want to be compensated for that cost.

• If it’s impossible to evict the tenants, then you have to show it while tenant occupied, which can bring up multiple issues pertaining to appearance, showings, open houses, and tenant resentment and lack of cooperation. It also makes it virtually impossible to perform any staging of the home to make the property show in its best possible light.

• Many buyers don’t want to buy tenant occupied homes and those buyers willing to deal with the issue usually expect a significant discount on the price.

2. Managing a rental property and tenants can be a hassle—the calls about broken plumbing on Thanksgiving Day may not be something you wish to deal with. And if you hire a professional property manager, there will be a significant additional expense to deduct against the rental income.

3. If you are able to get the tenant to vacate the property prior to the listing period, a vacant house will have to be staged to show well. It costs money to stage an empty property and it costs money to keep the house vacant during the listing and sale period.

4. Renting for an extended period may affect the $250,000/$500,000 exclusion from capital gains tax for owner-occupied properties upon sale.

5. If you want to own rental property, you will typically get a better return on investment from multiple-unit properties than from single family dwellings.

6. You may need your proceeds of sale to purchase your new home.

Note: If you do decide you wish you rent out your home, Paragon has a very able rental department which specializes in this exact situation.