New appraisal standards went to effect for most loans as of September 1st.  Appraisers now have to take into account all the following factors:

• All the Days on Market including previous days that a property was listed even if removed from the market
• Offering Price as the original offering price despite price reductions
• Property Style now has to be classified by architectural design such as Victorian, Colonial, Townhouse, etc
• Condition must now be determined by predefined categories
• Quality of Construction has to be rated into one of six predefined quality levels

The impact on buyers is that it is going to make it harder to value properties and cause delays in appraisals so you should allow at least two weeks for an appraisal. 

There are great loans for purchasers looking at buying properties South of Market (SOMA) that only a few realtors and mortgage brokers are aware.  Features of these loans include:

• Loan amounts up to $729,750 in San Francisco
• 5% minimum payments down
• No PMI insurance necessary
• No FHA approval necessary/streamlined condo review process
• Low rates (on 9/7/2011 qualified applicants could obtain rates as low as 4.125%)
• The property must be in designated areas which includes much of SOMA
• Live Work Spaces also qualify

Borrowers do not have to be US citizens, but foreigners who are eligible must be able to show 3 years of income history and meet other requirements to qualify. 

If you are looking to acquire a property South of Market, I would be happy to assist you with taking advantage of this program and representing you as your realtor.  Feel free to contact me. If you want market information about SOMA real estate in San Francisco please visit our website GB and Associates.

I have been in the real estate business for many years and just thought I would write something that buyers should pay close attention to when purchasing a condominium that many realtors and buyers often overlook.

1. The Condo Plan or Tract Map
The Condo Plan and Tract Map will show you exactly what you own versus what is a common area. This should clarify what parts of the property you are personally liable for and what you have to pay in dues to your Home Owner Association (HOA) to maintain.

2. Covenants, Conditions and Restrictions (CC&Rs)
Make sure you have read through the CC&Rs and are comfortable with accepting all their terms before you close escrow. Once you have closed escrow you are legally assumed to have accepted each CC&R term.

3. Articles of Incorporation of the HOA
The Articles of Incorporation will give you an idea of what the HOA is authorized to do.

4. By-Laws and Operating Rules
The By-Laws and Operating Rules are important to you as they determine how the HOA members are elected and what your rights up front when dealing with your HOA.

5. Reserves
HOA Reserves are something you should pay special attention. Given the current economic environment, some HOAs are not receiving all their dues.  This is causing a short fall in revenues. Those that are not well funded are increasing their HOA dues or charging owners assessments. Also, many banks are no longer lending to potential buyers in buildings where there are significant HOA delinquencies or large assessments.

I hope these tips help you and if ever I can be of any assistance just contact me, Greg Bryan, your San Francisco Real Estate Solution Specialist.

So I was recently asked the question of is paying above 2009 prices normal for San Francisco.  I can tell you from experience here in San Francisco that prices vary considerably and that many different factors determine what a property sells.  Some of the factors that I consider when looking at a property for determining if it has been priced correctly are the following:

• Neighborhood/Location
• Condo v. Single Family Residence
• View v. Non-view Unit
• Price Range
• Condition and if it was recently updated or built
• Number of Bedrooms
• Parking
• Amenities/Unique Attributes

Every property is different and if your realtor should be able to provide you with numbers, trends and market conditions that let you decide for yourself that the value is there.  If they can't you should consider getting another realtor who can.

Unless Congress takes some action the FHA Conforming loan limits will drop from $729,950 to $625,500 by October 1st.  Banks however are already starting to take action and if you are currently out looking you may want to try and get into contract by the end of the month as that is when several banks will stop accepting as conforming loans in the $625,500 to $729,950 range.  This will result in the costs of financing going up by about 3/4 points significantly increasing monthly payments.

One of the toughest contractor jobs to hire someone for is roofing.  This is because there often times are huge price differentials in quotes for jobs and the quality of the work is largely unknown until after.  One thing you may want to do is go to a consumer site that rates contractors such as Checkbook.org.   Other things you should do are:

• Get bids for any contract and compare prices amongst contractors
• Arrange to make payments in installments as the work completes that way the contractors have an incentive to get their work done timely (note although many roofers may not agree to it, but if you can try to negotiate to make the last payment after the first major storm)
• Get proof of contractor's license, liability insurance, and worker's comp insurance
• Write up contract specifics about what exactly the roofing job should entail (ie old shingles to be removed, debris removal, whether flashings or weatherproofing is to be replaced, materials and types to be used, and warranties)
• Get an estimate of time lines, who is going to be in charge, how many people will be working on the project, and materials to be used
  
• Get a warranty in writing from the roofer guaranteeing that the roof will be free of leaks for 5 or 10 years baring accidental damage to it

I recently read an article about how the home market is creating a generation of renters.  Here in San Francisco there have always been a high proportion of renters. 

Apparently 33.6% of households are renters and that there are a total of 38 million household renters in the United States according to the Associated Press.  As more an more people are going bankrupt, facing foreclosures and facing unemployment, more and more people are turning to renting.  This is driving up the price of rentals in many cities throughout the United States.  I know here in San Francisco the supply for rental units in Pacific Heights and Presidio Heights is particularly limited with extremely low vacancy rates.

There is also a younger generation of people who no longer view home ownership as something desirable.  They have seen family and friends' home values deteriorate and are more and more turning to rentals.  The Associated Press' article stated that according to Moody's Analytics it is cheaper to rent in about 72 percent of the biggest metro areas than to carry a mortgage.