PRACTICAL ADVICE

Cutting Through the B.S. of Real Estate

Practical Tips for Buyers and Sellers of Today’s Market

Buyers and sellers alike are placing a lot of belief, optimism and capital into the City’s real estate market.  This makes sense of course. San Francisco is at the heart of the technology and data-driven economy with precious little developable land, a diverse population, mild climate, proximity to Asia and Latin America, access to nature, wine, world-class universities and much more.

And we are a market flush with cash — tech-derived, international or borrowed thanks to low mortgage interest rates. All of this wealth is being funneled into our neighborhoods. Demand continues to far exceed supply but it could be worse. Compared to other international cities San Francisco properties are still only priced a third or at half of a Paris, London, New York or Hong Kong.

Buyers and sellers regularly ask me and my partner Jonathan about how they can make the most out of this market. Our experiences representing both buyers and sellers has given us some perspective that may help you.

This article originally appeared in the June 2015 Hatch Beat newsletter

Top 5 Tips for Better Buying.  

1. You’re competing to win a property not just to buy it

There are 5-6 offers on an average property in the City these days. So, rather than spin your wheels you’ll need to be armed with the best data, terms and understanding of how the market works in San Francisco in order to get that next home because most agents are really using teaser prices today — but then again, some of them aren’t!

2. Work with a bona fide, full-commission realtor.

Would you ask your doctor for a discount? Would you ask your flight’s captain if you could fly the plane yourself? In this most important of all purchases in this rarest of all places, you need the best professionals working on your behalf to help you win your next home. We’ll provide you with accurate and updated information that far exceeds what a Zillow or Redfin will tell you so you make the best decisions.

3. Save more money.

With modern 20-percent-down-payment loans, any amount of extra money you save toward a down payment will be worth 5x its face value. So, cutting out that latté every day may make all the difference from losing out to another buyer and winning your next home. But cash talks of course, so if you’re going that route, save as much as you can so you can make the offer that no one can refuse!

4. File Your Taxes.

If you’re financing your purchase then file them early … or not. Lenders will look at 2 years of taxes. So, if you had a great year that was better than the last 2 then file as soon as you can. Conversely, if you had a worse year, then file later so you can take advantage of the best two years you can.

5. Pay down credit cards but don’t close accounts.

Mortgage lenders will expect to see at least 3 lines of credit open for at least a year before considering you creditworthy. Your FICO score should be at least 680 — if not 740 or 765 — to get the best interest rates and terms. To boost your score, you should check for reporting errors regularly and use your credit card regularly but pay off your statement every month. But don’t go overboard as closing a credit card will harm your score!

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Top 5 Tips for Better Selling.  

1. Package the Product, i.e., Your House

Think of your home as a product that needs to appeal to the most people. Apart from location, buyers are willing to pay more money for a home with great curb appeal, kitchens and bathrooms. Similarly, appraisers apply that same logic when doing their job, so make it easy for them.

2. This is not a do-it-yourself project — hire a professional.

Our experience shows that folks who try to sell their house with a discount broker or by themselves leave far too much money on the table. The money left on the table far exceeds any perceived savings on commissions. Realtors not only give you market context and practical guidance to ensure you’re complying with fair housing laws and sale requirements, we know how to enhance and showcase your property to the most people in the best light possible.

3. Talk to an accountant.

Selling a home will have all kinds of tax implications especially if you’ve owned your property for longer than 2 years. While you might be able to shield up to $500,000 worth of gains from capital gains taxes, that kitchen or bath remodel might reduce that burden too and there may be other benefits available to you too.

4. Setting the stage up for success by moving out.

Painting and having a property filled with staged furniture from a professional stager will add immense value to a property that is otherwise owner-occupied. While it may be a pain to move out in the short term your bottom line may make the hassle worth it.

5. Recognize you have more latitude in a sellers’ market.

If moving out and staging isn’t an option or if you don’t want to advertise the fact you want to sell, many other sale options exist. By working with an agent you’ll be able to get to the right buyers for your property even if you’re not on the open market. As a seller, you may insist on terms such as being able to reside in your current home after the sale closes to enable you to find a replacement home as an extremely well-qualified, cash buyer.

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Home Found: Guiding Buyers to their Dream Home

Prior to meeting Kevin, my wife and I felt lost as we started the process of looking to purchase our first home.  Kevin was an excellent coach throughout the journey, holding our hand through every step, always available to answer any question (big or small).  Kevin’s guidance is the reason we ended up winning the offer on our new home and we would highly recommend him to anyone looking to navigate the SF home buying process.

 

— Taylor and Carolyn, Buyers, Medical Startup & Attorney, Glen Park

Kevin was instrumental in helping me find the right place for me and writing a winning offer for my new condo in Alamo Square.

When I started looking for a place at the start of the year, I knew the San Francisco market was competitive, but I had no idea how fast-moving and short on supply it was. Kevin was the perfect agent to handle these difficult conditions. He was always very responsive to texts, had great connections to all sorts of people, and constantly shared photos and documents relevant to the places we visited.

When it came time to make an offer, Kevin really pulled through at coordinating all the necessary parties to get the offer ready on a last-minute schedule. He followed through in ensuring that we closed escrow within an aggressive 17-day timeline.

With Kevin I know, I have someone I can continue to rely on for future advice and needs in real estate. Plus, he’s a super friendly dude.

— Mike, Buyer, Social Media Company Engineering Manager, Alamo Square

Professional Success for Buyers as Sellers 

Kevin’s enthusiasm with his profession was apparent when I first met him at an open-house he was hosting. When we were ready to work with a new agent, I had no hesitation to engage him. Kevin not only helped us find a new home in the ideal neighborhood, he also managed to sell our condo (very shortly after) way above asking. He is very knowledgeable with the SF market and has a vast network to provide insights to off-MLS availability. In fact we found our current place off-market from his contacts, and even worked with his recommended Mortgage Broker to secure our loan. He was a great resource for us during both the confusing buying & selling processes. I highly recommend him to help you procure or sell your property.

— Ron & Rick, Sellers & Buyers, CRM Manager & National Retailer Corporate Manager, Dogpatch & Eureka Valley

Kevin K. Ho, Esq. + Jonathan B McNarry
San Francisco Real Estate Experts
+1-415.297-7462 (Kevin)
+1-415.215.4393 (Jonathan)