Welcome back to Photo Friday - my little way of taking a break from San Francisco Real Estate and instead blogging about our great City’s past instead. All photos are published with permission from the San Francisco History Center and San Francisco Public Library.

Most of you know that the San Francisco Bay to Breakers is an annual tradition here in the City.  But what lots of you may not know is that the Bay to Breakers is the longest consecutively running footrace in the world.  The race was started in 1912 to try to cheer the City up after the destruction that 1906 brought upon us. 

While the race sees it’s share of serious athletes that actually run the 7.46 mile route, a majority of the participants take the race a little more leisurely, and the contest becomes less about who can get their the fastest, but rather who can look the best getting there, who can show the most skin on the way, or in some cases - who can get hammered the fastest.  And let’s not forget the big blowout party at the end of the whole thing. 

But long before the race became a costume contest, it was, well - a race!  Today’s photo had the newscaption:

OFF THEIR COURSE? Well, slightly perhaps, but to distance runners - and especially those in training for News Call Bulletin-sponsored Bay to Breakers Race, scheduled for Sunday, May 23 - know well enough grinding out the miles on the hills is the kind of practice necessary. With the University of San Francisco fielding a track team for the first time this year, Coach John Fry has entered John Sweet, left, and Rich League, both experienced distance runners, in the 55th annual Bay to Breakers, 7.6-mile run.

Oddly enough, even though I’ve lived in the City since I was two years old, I’ve never participated in the Bay to Breakers.  And I won’t be participating this year either - I’ll be taking a few days off to relax in beautiful Lake Tahoe!  But, since I plan on being in San Francisco for ever and ever, I’ll have plenty more opportunities to join in the festivities.

If you are participating in the race, make sure you stay good and hydrated and don’t forget the slather on a little extra sunscreen - this weekend is gonna be a scorcher! 

And since I’ll be in Lake Tahoe, I’ll be unplugging, and that means no blog posts for a few days.  But don’t worry, I’ll be back early next week. 

Happy Friday and have a great weekend!

But buying property during the foreclosure process is challenging.  Ask most people that have seen both good and bad real estate market and everything in between and they’ll tell you that buying foreclosures takes nerves of steel, an acceptance that there is risk involved and a strong stomach.  And of course, it takes being knowledgable about the foreclosure process.

Now I’m willing to give you a little lesson, but people teach entire multi-day seminars on foreclosures and the foreclosure process - so my little blog post here isn’t going to go too far in the way of your foreclosure education, but it should give you enough information to decide if your stomach is strong enough to attempt purchasing a property in some stage of foreclosure. 

So read on to learn about the various stages of the foreclosure process and the potential pitfalls of each. 

Short Sale - A short sale occurs when a property owner is upside down on their mortgage (they owe more than their home is worth) AND they can no longer afford the mortgage payments.  ,

Some lenders, rather than foreclose on a property are willing to settle for less than they are owed.  They aren’t really being kind or generous - it’s just that banks aren’t in the business of buying and selling real estate, but rather, buying and selling money.  They have no desire to keep homes in their portfolios, and in most cases, lenders would rather settle for a portion of what is owed to them and forget the whole thing ever happened.

The Short Sale purchase process starts rather simply.  You see a property that you like, you make an offer on it, and the seller accepts the offer.  Well - you still have another major hurdle to jump through.  The offer now must be submitted to the lender, or in some cases lenders, and this is where the meditation class you took in college pays off. 

Once the lender receives your offer, they rarely accept it right away.  Typically it takes weeks for them to approve it (or reject it) and I’ve even heard of it taking months!  During this time, the lender is reviewing the seller’s hardship package, they are reviewing your offer, and they are waiting, hoping and praying that another offer better than yours will come in.  Of course, you can add deadlines and such to your offer, but the reality is that the bank will decide only when it’s good and ready. 

Now, if the bank accepts your offer, then it’s pretty much like any other sale.  Unless of course, the seller had a 1st loan and a second loan that they can’t afford to pay off.  In this case, things get rather complicated rather quickly, because now you have two separate banks that have to agree to forgive part or all the seller’s debt rather than foreclosing on the property.  

Sale Day (Courthouse Auction) - Let’s assume the bank rejected the short sale.  Instead, they opted to file a notice of default followed by a notice of sale which led up to the Sale Day, where we are now.   Sale Day occurs on the courthouse steps in the county where the trust deed was recorded.  You can find out in advance which properties will be auctioned off on which day by looking in the local newspaper, going to the local courthouse, or contacting a REALTOR familiar with foreclosures.

The first thing to keep in mind is that your credit is no good on Sale Day.  In fact, if you don’t have the money, either in cold hard cash, or in the form of a cashier’s check, you have no hope of winning the property on Sale Day. 

In addition to the ALL CASH policy, you don’t have the opportunity to do any inspections, you don’t get title insurance, you don’t have disclosures from the lender, you don’t have crap.  You may as well be throwing the dice.  Why am I being so dramatic?  Well - your property might come with LIENS ALREADY AGAINST IT - including various unpaid utilities or mechanic’s liens.  If you buy the property, the liens come with it and it’s YOUR duty as the property owner to take care of them.

What about the price, you ask?  Well - the lender is going to want to make back what they were owed by the former homeowner - so the starting bid will likely be the amount of the first note.  Once again, you can get this information from a REALTOR.

Sale Day is frankly kinda scary.  You might walk away with a ridiculous bargain, but you might walk away with a HUGE liability on your hands.

REO (Real Estate Owned) - So Sale Day often comes and goes with no offers on the courthouse steps.  The bank is left with the property on their books - and as I’ve mentioned before, banks aren’t in the business of buying and selling real esate, so they want to get these properties off of their books rather quickly. 

Now this is the time to find bargains!  Banks usually unload these properties at a significant discount because they don’t want to hold on to them.  The bank’s representatives usually respond to the offers rather quickly, and while you’re unlikely to find a property in pristine condition (former owners often take anything of value in the house from appliances to lightbulbs and doorknobs), you are likely to find a damn good deal.

But as with all things, there is a catch - you need to be ready to hustle!  You have to move fast to grab one of these deals and you won’t have time to think long before you make an offer.  However, if your offer is accepted, you often have the ability to do inspections (although in a competitive situation, you may not have that opportunity either.)  Again, you should be working with a savvy REALTOR to make sure you don’t miss out on one of these deals.

I hope you found today’s foreclosure lesson helpful.  If you want more information about Short Sales, Courthouse Auctions or REO’s, contact me.  I’m always happy to help!

Luckily SF Citizen is on the lookout!  While I was trying to guess just how hot it was going to be in the rest of the City (at my house on Great Highway, it was about 10 degrees cooler than it was in the rest of the City all day long!), SF Citizen was already reporting that Google is now showing San Francisco real estate listings on its map feature!

SF Citizen reports that Google says:

Google Maps is evolving from a driving directions and business search tool, to a comprehensive representation of all the world’s information, on a map.” That’s why Google Maps started to integrate different layers of information when you search for an address and it added a new “More” button to enable layers for photos and Wikipedia articles.

While it ain’t no MLS Property Search, it’s a start.  I’m guessing that soon enough, Google will figure out a way to make the search even more comprehensive. 

Thanks to SF Citizen for being on the ball while some of us were lacking focus due to the current heat wave.  And if you were melting just like me, grab yourself a hunk of ice to cool yourself down, because Thursday is supposed to get ever hotter!

Stay cool San Francisco, stay cool!

Here’s the latest Fast Facts update from the SFAR. Updates are provided almost weekly and each week is a different sector of the market (ie. Condos, Single Family Homes, 2-4 unit dwellings, etc.).

Check back next week for more statistics.

Occasionally, I like to invite a guest blogger to share some insights about their field of expertise. Sometimes it’s about San Francisco real estate, and sometimes, it’s just about stuff that San Franciscans care about. Today’s guest blogger is Chris Connors of San Francisco’s Design Solutions, a team of Certified Green Building Professionals. He’s been kind enough to post here before in “How to Save Money by Remodeling Green” and “How to Keep it Green Underfoot”. But this time, well be discussing what’s in demand in the world of green building. Read on for Chris’s commentary about “Greening” your remodel.

 …the thing that makes me think the numbers are somewhat useless [in a market like San Francisco], is that (as Socketsite.com pointed out) the index only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation, and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the “San Francisco” index… which in my mind is their greatest error.

So when the two economist (that would be Karl Case and Robert Shiller) predicted gloom and doom in every real estate market across the country, including the San Francisco real estate market, I had a tough time swallowing that pill.  And indeed, while that “pill” did ring true for much of the US real estate market, cities like San Francisco, Seattle and New York held strong and weathered the storm, and proved that Case & Shiller’s predicions didn’t ring true across the board.

And every month, when their index is published, I am bombarded with questions from clients and blog readers about my opinion on what’s happening with SF real estate and where it’s headed because the Case Shiller Index shows a drastic decline in San Francisco.  I curse the day that those two guys met each other.  Their index forces me to (calmly) explain (over and over and over) that San Francisco, San Mateo, Marin, Contra Costa, and Alameda are all lumped ino the “San Francisco” data and that they don’t track SF condo sales, which make up half the market here.  (I have thought about creating a recorded message that I can just play that repeats the above facts so that I don’t have to answer questions about the index ever again.)  >:-<

In the previous post that I mentioned, I stated:

To be honest, there are too many indexes, and too many experts to keep up with all of their opinions, which by the way, are typically all contradicting each other… sometimes subtly, and sometimes much less subtly.

And to my great surprise, I found an article in the Boston Herald, where the two experts that actually developed the damn index (if you’re following along, that would be Karl Case and Robert Shiller) can’t even agree on the state of the market!  HA!

The article was titled “Real estate market ready for a rebound” and went on to talk about Karl Case’s opinion that the real estate market has hit bottom and that now is a good time to buy. 

Meanwhile, Karl’s buddy Robert Shiller has predicted that “the decline in home values would exceed that of the Great Depression.” 

Now, I ask you, when two of the country’s most respected “experts” on the state of the real estate market can’t agree on the state of the real estate market, who can you turn to?

Well, for starters you can turn to your Realtor.  Your real estate agent has access to cold hard facts that you can then interpret together.  Some cold hard facts as of today for the San Francisco real estate market are that sales volume is MUCH lower than it was last year, meanwhile, median prices (depending on neighorhood and type of home) are either stable or increasing. 

What does all this mean?  Are we at the bottom?  Are we falling?  Are we on our way up?

I can’t say.  I don’t have a crystal ball and I can’t tell you what the future holds.  But I can say what I’ve said time and time again…

If you are looking for a short term investment with guaranteed return, real estate has really never presented that.

But…

If your objective is long term there is very little support for a theory that you will lose in real estate, especially in the San Francisco real estate market.

Thanks for stopping by, and if you have questions about the state of the market, please contact me, I love to talk about SF Real Estate.

“Tread” Carefully [Apartment Therapy]
Another Example of a “Savage” Pit Bull (note sarcasm) [Bad Rap]
That IS Rather Hideous! [Curbed SF]
Can this Really be Safe? [Laughing Squid] 
Is that a Mini-City Driving Down The Street? [What I’m Seeing dot com]

A while ago I noted that San Francisco had put a ban on plastic grocery bags. Since then, many cities have followed suit, or at least have contemplated following suit.

The problem is that stores aren’t using the biodegradable starch based bags and instead are using paper bags - a big problem for tree lovers and trees alike. The problem is that while a paper bag won’t sit in landfill for thousands of years like a plastic bag will, it actually takes more energy to make a paper bag than a plastic bag.

My suggestion, although probably controversial, is stop selling paper bags too.

Stores can then charge anywhere from $0.10 to $0.25 a bag for the starch based bags. People will learn that you either need to pay up or bring your own bag. And stores can stop bitching that the starch based bags are too expensive and cut into their profits.

In Europe, everywhere I went I wasn’t handed a bag unless I asked for it, and paid for it. And no one complained.

My suggestion - bring your own grocery bags to the store with you.

What? You say you don’t have any reusable grocery bags? Give me a holler - I’ll hook you up with a free canvas grocery bag while I’ve got ‘em.

I apologize, but I am no longer shipping the bags outside of the San Francisco Bay Area. (I actually no longer ship the bags – I either drop them off locally, or leave them at my office for people to pick up.)

The bags are to help people “go green” but the amount of energy it takes to ship something as small as a canvas bag across the country is very wasteful, as is the packaging required to ship it.

I hope you understand and I apologize for any inconvenience.

Welcome back to Photo Friday - my little way of taking a break from San Francisco Real Estate and instead blogging about our great City’s past instead. All photos are published with permission from the San Francisco History Center and San Francisco Public Library.

So I have been keeping up with the news about the Golden Gate Bridge toll increases, and thought I’d see if I could find some fun photos of the Golden Gate Bridge. 

Lo and behold - I found a photo of from September of 1955 when the toll was actually decreased to $0.25!

The newscopy read:

“HERE’S GOOD NEWS FOR MOTORISTS–Gale Bei points to new toll which goes into effect on the Golden Gate bridge at 11 o’clock tonight.”

When the bridge first opened for transit in 1937, toll was 50 cents each way, $1 roundtrip, with a 5 cent charge if more than three passengers.  Over the next several years, toll slowly decreased until it had dropped to a mere $0.25 in each direction! 

Remarkably, that low toll was in place for 13 years until the policy was changed to $0.50, but that was just Southbound (like it is today).  It remained at that low price for another 6 years, until 1974 when toll started to creep upward ever faster. 

Today - the Golden Gate Bridge, Highway and Transportation District is moving towards a plan that will (they say) decrease traffic during peak times and encourage people to either go to work earlier or later, or to take public transportation. 

However, with bus fares and ferry fares not exactly being dirt cheap, I don’t forsee North Bay dwellers giving up the convenience of their vehicles to avoid paying the increase in toll and riding taking public transit instead.  (Although I can think of lots of other reasons to take public transit, especially with the reduced impact on the environment public transport can have, the high gas prices and  the fact that the ferry is just plain fun!)

For now though, frequent bridge crossers need not worry.  The increase isn’t scheduled to kick in until September 1st, so for now, you’re free to cross for the bargain price of $5. 

If you’re reading this and dreaming about the weekend - we won’t be having record breaking temperatures, but the forecast calls for sunshine and temperatures in the low to mid 60’s, which is still nice enough to back away from the computer and get outside and play!  Have a great weekend!

This is what Monica sent out yesterday:

The government has sponsored a program that allows homeowners with a loan amount above $417,000 and up to $729,000 to be able to refinance below market rates.  Many of you have emailed me to ask me where these rates are currently.  Today, you could refinance into a 30 Year Fixed Amortized Loan Program up to $729,000 and lock into a rate of 6.75% with no points and prepayment penalties.  This may be a good opportunity for those that are thinking of remaining in their property for a longer period of time or those that have an interest only loan and want to start paying down the mortgage.

 

The current rates for a Regular 30 Year Fixed Jumbo Loan are very high.  They average 7.625% with all lenders.  6.75% is definitely a great rate for a Jumbo Loan these days.

 

If you have any other questions, please don’t hesitate to contact me and we can put together a strategy that makes sense for your financial plan.

Today, the Government Sponsored rate has decreased to 6.375 if you have the following elements:

 

720 FICO SCORE

Loan amount of $728,000 or under

20% Equity in the property

NO CASH OUT

Rate and Term Refinance

Single Family Residence ONLY

Amortized loan ONLY

Must have 6 months of reserves in the bank (Your retirement account is sufficient)

All of your monthly debt must be 40% of your gross monthly income

 

If you are interested in shifting to an Amortized 30 Year Fixed Jumbo please let me know and I will email you a to do list.

 

Have a great day!