Luba Muzichenko

San Francisco Realtor

Buy San Francisco Foreclosure

People Are Actually Reading!

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As more and more people swing by this here little real estate blog, I find myself getting more and more emails from readers.
Sometimes the readers are home buyers, sometimes the readers are home sellers, sometimes they’re other Realtors from across the country, sometimes they’re people with random questions about real estate.
The other day, I received a letter that was a little inspiring and reminded me that I don’t just write my blogs and my newsletter for myself.  It reminded me that people actually read what I write, and it made my day so much so that I thought I’d share it with the rest of you readers.
Here it goes:

Hello Luba,
You may or may not remember me, but I emailed you asking for a canvas bag a couple months ago. Firstly, I want to say thank you for that. I use it quite religiously every week I walk to the local produce store and it leaves me with a great sense of pride in enabling me to feel I am doing every small part I can in living green (and also saving myself and the grocer money. After all I am working towards a house here!). This initial contact with your voice leads me to my second statement of gratitude.
I have been reading your newsletters and I want to say good job, not only for informing me the buyer, but also for showing us that you are a true entrepreneur and doing everything within your power to help us and in turn help you thrive in this questionable state of the economy. First it’s the bag promotion and then the newsletters. I am looking forward to continued updates and other projects that will keep us excited about our dreams and futures.
By reading your newsletters I have motivated myself to take night classes in real estate at CCSF. It is only the first week and I am already drowning in the possibilities of the economy and learning so much about how real estate is woven within the fabric of our lives, from trends in loans and interest rates related to population spikes, rising oil prices, inflation of commodoties, and the local and federal politics and laws that shape our societies. I hope that by the end of this semester at the very earliest, I will have become an educated property seeker and have this initial spark of motivation to thank you for almost entirely. I look forward to the day when I or another young buyer can financially patronize your services and you might see a financial gain from your hard work, which I am certain you will reinvest in our futures.
Thanks again!
Grant Inaba

Grant’s letter really made me smile!  As a Realtor, I know that I often have an impact on the lives of my clients.  But what I often forget is that anything that I say might even have an effect on people that aren’t yet my clients – and are (for at least the time being) total strangers!  Writing my blogs and my newsletter gives me a great way to share information and insights with people I haven’t met yet – and it’s great to know that someone, somewhere is able to get something out of it! 🙂
Thanks for writing Grant!  :-)   Good luck with the real estate classes!  🙂

Chris Daly Strikes Again – 2 Unit Buildings Targeted

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I’m really not sure what Chris Daly has against homeownership in San Francisco.
Don’t get me wrong.  He’s done a few decent things for affordable housing in San Francisco.  But he’s focused all of his housing energy on the rental sector of the market and has done everything in his power to keep homeownership unaffordable for San Franciscans. 
In addition to opposing much of the new development in San Francisco, Daly’s always had it out for TIC’s and their ability to condo convert.  Even though the ability to convert TIC’s to condos in San Francisco allows middle-income people to buy here in the City, Daly attempts to put up brick wall after brick wall to stop the process in it’s tracks. 
His newest thing - Chris Daly wants to stop the fast-track condo conversion status that vacant 2 unit buildings now hold in San Francisco.  Apparently, there’s just too many conversions occuring for Daly’s taste. 
What does that mean to current owners of 2 unit buildings?  Your dreams of fast track condo conversion may be shattered by the one and only Chris Daly.
What does that mean to potential buyers of TIC’s in 2 unit buildings?  You may want to rethink your long term plans.  You’ll need to make the decision now, to either be OK with the lack of fast track conversion potential in your future home, or to decide to buy a condo instead which means less space and less amenities for the same money. 
I’ll try to keep you posted of any news with this whole situation, as well as opportunities to voice your opinion on the topic as I hear about them.  And if you have comments on the topic, feel free to voice them here on the blog – I’d love to hear your opinions.
The full scoop, per the San Francisco Realtors Association:

Last week, what was merely a possibility became a reality. Supervisor Chris Daly introduced a proposed ordinance that would place two-unit buildings in the condominium lottery and exempt two-unit buildings that are owner occupied as of August 1, 2008. The full text of the proposed ordinance appears below.

Under city law, ordinances must undergo a 30-day waiting period before they may be heard in committee. This is to allow interested parties an opportunity to study ordinances and take positions on them; so the first hearing on Supervisor Daly’s proposed ordinance will not occur until early July, at the earliest.

ARTICLE 7

SEC. 1359. PARCEL MAP.

(a) The requirements of Subsection (c) of Section 1356 of this Code shall apply to Parcel Maps.

(b) The Parcel Map shall conform to the requirements of Chapter 2, Article 3 of SMA and to the Subdivision Regulations regarding detailed format and contents.

(c) In the case of Conversions where a Tentative Map is not required, the requirements of Section 1314 and the requirements of Article 9 on Conversions shall apply, provided that hearings as provided in Sections 1313 and 1332 shall not be required, and the 10-percent low and moderate income occupancy as provided in Section 1341 shall not be required, and provided further that Article 9 shall not be applied to two-unit buildings only where both units are owner-occupied for one year as of August 1, 2008 and where both units remain owner occupied by the same owner occupants as on August 1, 2008 up until prior to the application for Conversion. The Director of Planning, however, shall make the determination pursuant to Section 1385 concerning preservation of low and moderate income housing.

(d) In addition to the requirements of Subsection (c), the owners of record of a two-unit building conversion that qualify for the exemption from Article 9 must certify under penalty of perjury and the Department must verify with the Rent Stabilization and Arbitration Board, and with the Human Rights Commission as applicable, that since November 16, 2004, no eviction as defined in San Francisco Administrative Code Section 37.9(a)(8)– (14) of a senior, disabled person, or catastrophically ill tenant as defined below has occurred, or if an eviction has taken place under Administrative Code Section 37.9(a)(11) or (14), that the original tenant reoccupied the unit after a temporary eviction. For purposes of this Subsection a “senior” shall be a person who is 60 years or older and has been residing in the unit for 10 years or more at the time of the lottery; a “disabled” tenant is defined for purposes of this Subsection as a person who is disabled within the meaning of! Title 42 U.S.C. Section 12102(2)(A); and a “catastrophically ill” tenant is defined for purposes of this Subsection as a person who is disabled as defined above, and who is suffering from a life threatening illness as certified by his or her primary care physician.

(e) If the owners of record cannot satisfy the requirements of Subsection (d), then the owners of record shall comply with Article 9, including its Section 1396.1(g)(3), prior to submitting an application for Conversion.

(f) If the Department determines that an applicant has knowingly provided false material information under Subsection (d) above, the Department shall immediately deny the application, or if the applicant has submitted an application for conversion, shall immediately deny the application for conversion. Moreover, the Department, the Director, or other authorized person or entity may also enforce the provisions of this Subsection under Section 1304 or any other applicable provision of law as warranted.

Good News In Real Esate?

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Who woulda thought that someone out there was willing to report good news about the real estate market?
It seems that every other day I’m getting a call from my mother asking me how I can possibly afford to eat because the real estate market is doing so horribly.  And when I’m not trying to convince my mother that I do indeed have enough money to eat, and pay for housing and gas and work expenses and (gasp) actually enjoy life and take vacations, I am talking to clients and strangers about the condition of the real estate market here in San Francisco. 
I’ve mentioned in previous posts that it’s far from being all bad here in the City.  There are plenty of homes that are selling quickly if they’re desirable and priced right.  And while those that bought a year or two ago may not see any return on their investment if they are trying to sell today, those that bought 3 years ago, in most cases, are doing pretty well.
So after reading all of the real estate doom and gloom that constantly innundates the media – it was refreshing to stumble on Happy Real Estate News.  They list all of the positive changes that are going on in real estate markets across the country from decreases in days on market to increases in prices to increases in sales volume. 
And (drumroll please….)
… San Francisco is mentioned on every list.  Prices are heading up, days on market is heading down, volume is heading up…. the gloom and doom hasn’t taken us down here in SF. 
So if you’re feeling a little glum about the market, swing by Happy Real Estate News and take a little breath.  Things aren’t as bad as the media makes them out to be. 

How to Buy Foreclosed Homes In San Francisco

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So you want to take advantage of the whole mortgage meltdown that’s been going on.  Who can blame you?  You want a deal!  Deals are good!  We all like saving money. 
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! 🙂