Oh my goodness, I have been selling real estate since 2002, but the last time I bought a property was in 2005. Right now I am representing a number of buyers in their search for a new place to call home in San Francisco, and I am also representing myself in an attempt to buy a place. I don’t remember it being this stressful.
First I was buying a tiny place in San Francisco with no parking that needed a remodel. Everything was going along fine, I thought, but I had nothing in writing from the lender. Finally, the mortgage representative told me that he had never made a mistake like this, but that he had misinterpreted the bank’s guidelines and could not do the loan. I jumped to a new lender and started again. I was dealing directly with the seller, no commissions to be paid, and I was honest with the seller, telling them that I was over my contingency period and that although I did want to complete the purchase, that they had the right to kick me out. They took some time to think about it and decided they didn’t want to sell after all, and canceled the contract on the same day that my new loan was approved. I was very disappointed! A few weeks later I found out that the garbage chute in the building had been shut down and that an intrusion of cockroaches had invaded the common areas and individual condos. That made me feel a little better.
I believe owning a home is one of the most important things I can do, and I feel very strongly about it, so I hustled and within a day had settled for a place in Marin, about 20 miles North of San Francisco. I’ve been in contract for about three weeks on this property and the appraisal just isn’t coming back. It’s been 5 days and they promised Friday at the latest, but Friday is here and no appraisal. Time is passing so slowly. The lender approved my loan but came back with about 30 conditions, the satisfying of which can be a bit like a treasure hunt meets a to-do list. Once you think you have all the conditions met, the whole package gets sent to the lender and they have 24-48 hours to review. They can then ask for more stuff. (Every lender is different.) Anyway, the conditions can’t be cleared until we have the appraisal. Every day I have to update the seller’s agent about the situation and I’m embarrassed because I’m an agent and I feel like I should know more about what is happening and why. It’s horrible to have so little information and so little control.
One of the things that makes trying to buy a property so difficult is that for every place I thought about buying, I entertained a lengthy fantasy about remodeling and what my lifestyle would be like once I had completely improved the property. If I was looking at cute, funky houses in Marin, I thought about outdoor wood-fired ovens where I would be making my rustic pizzas. If I was worried about cost I thought about how I would rent out one room furnished and maybe another longer term. I even thought about how I would rent out the whole house and live in the garage (after turning it into a modern industrial-chic/music studio masterpiece of course). And my fantasy would also turn dark: since the whole house was crooked and built on a post and pier foundation on a hill made of loose soil, maybe it would cost $150K+ to shore up. I imagined after months of pile driving the neighbor would probably sue, claiming that my pile driving had disturbed their foundation.
If thinking about the Art Deco condo, it was all about taking out the old mirrors (circa 1970, not 1930), ripping out the carpet, knocking down a wall and making it lush with its decor, then enjoying cocktails in the beautiful lobby of the building while wearing a party dress. I would consider getting rid of my car and taking the bus or cabs everywhere. For that place I worried about the costs of the HOA, the electrical situation in the building and the possible spiraling out of control of my remodel costs.
One of the things that I think makes me a good agent is my near psychic ability to see into the future about certain aspects of property acquisition and ownership. Well, I guess I’m also just a worrywart.
Anyway, it wears on you- month after month of fantasy, concern, worry, dreams, and disappointment when you find that it won’t work out with your new life and home after all.
I try to crush the dreams of buyers up front out of kindness. I don’t want them going through all that because I know the San Francisco market well, and I hate to see people disappointed. Sometimes buyers get heartbroken and stop looking, which doesn’t work for me, so I try to handle it delicately, without seeming like a totally negative downer. I do have to be careful because I can be wrong and also I can make assumptions about what my buyers want from me. Some people want to be talked into buying a place, not out of it…
It’s hard for many people to come to terms with the different pricing strategies in San Francisco, but they seem very obvious to me at this point. When it’s the sort of property that is scarce and in high demand (2 bedroom Victorian with a Bay View in North Beach), seems reasonably priced and has lots of showings over a week or two, plus an offer date, it’s probably going to sell for higher than asking with multiple offers. If it’s sitting on the market accumulating days and the price is high, it’s probably going to sell for under asking or not at all. Sometimes it means the seller is not reasonable or they can afford to hold the property until somebody is willing to pay their price. Once buyers have been looking and really trying to buy something for a few weeks, they do start to get the hang of this, but some only think they want to buy in SF, and they are just casual about it, never coming to understand the reality of the situation.
Just like my sellers who canceled the deal, many people in SF don’t have to sell and don’t want to sell. So even if it’s supposedly not a perfect selling environment, you tend to have ongoing scarcity in San Francisco (with a few areas and property types excepted). The bottom line is that you really have to want to buy a place if you want to buy in San Francisco. If you want that one property that ten other people also want, you may have to overpay for it. Maybe that will make you happy and maybe you have money to burn, but maybe that’s going to make you feel bad and maybe you are going to have to go after a property that everybody else doesn’t want. I love to help people shop in that manner: Look for the ugly place that’s been on the market too long and that everybody thinks there is something wrong with. I like to tell people that. But I know most people who daydream about their new home don’t fantasize about spending $1,200,000 on a dump with no view, no parking and 40 steps from the street to the threshold. So it’s hard to strike a balance. I want to help people go for the places they really love, but I also want to avoid heartbreak. Some of it is luck, as well as being patient. The key is to keep trying!