THE REAL ESTATE ANSWER MAN Kevin Birmingham

Q: How have the influx of tech startups moving to SoMa affected home pricing? Has this caused any appreciation? Have more residential buildings converted to commercial office space? - Liza

A: San Francisco has been home to a thriving tech industry for years. While the jobs this industry provides do attract a lot of young tech workers to SoMa, the companies themselves aren’t particularly interested in commercial space there. The SoMa neighborhood was historically an industrial district and so much of the housing available there is converted from these old buildings, which don’t lend themselves particularly well to traditional office space. Most of the new residential development in this neighborhood is built over ground-floor commercial space, but again, this usually ends up leasing to retail.

Q: Can my girlfriend co-sign for me if she has had a short sale in the last 2 years? - John

A: Generally, conventional financing allows a buyer with a repaired credit history to get a loan with 20% down 24 months after a short sale or pre-foreclosure. After 48 months, you should be able to get a loan with just 10% down. It takes up to 84 months for the short sale to stop affecting your ability to secure a loan.

Q: What are the best neighborhoods to avoid the fog in San Francisco? - Louis

A: Divisadero Street in San Francisco is so-named because it’s the line that defines the city’s sunbelt. The traditionally sunny neighborhoods are to the right of Divisadero, especially the Mission, Noe Valley, and Bernal Heights.

Ask local real estate expert Kevin Birmingham: kevin@kevinbirmingham.com

April 2014

Q: We just bought a house and we are planning to invest a lot in landscaping the yard. Does this add value to the property?

Donna L.

A:Anything you do to increase the curb appeal of your house will help to increase the value. Traditionally, however, interior renovations see a bigger return on investment. Re-doing kitchen and bathrooms can add a tremendous amount of value to a home when it comes time to sell it.

Q: Which party typical pays for the underground tank inspection and is it a part of an inspection contingency?

Martin D.

A: Typically an underground storage tank inspection is paid for by the seller, but this is negotiable between buyer and seller. Regardless of who pays for the inspection, if a tank is discovered it's the seller's responsibility to have it removed.

Q: When selling a home, is staging really necessary?

Daniel O.

A: Staging can add a great deal of buyer appeal to a house, but the decision of whether or not to stage depends on the property. If a home is in move-in condition, a stager can help design living spaces to show buyers each room's maximum potential. A well-staged home can excite buyers and often helps to fetch a higher price in less time. On the other hand, a home that needs a little more TLC may not benefit as much from staging.

Ask local real estate expert Kevin Birmingham: kevin@kevinbirmingham.com

March2014

Q: I want to sell my property that is currently leased to section 8 tenants. When I told the tenant my plans to sell, she became very upset. What do I do if she decides to intimidate potential buyers?

Bill Branchini

A: First contact the rent board, document your conversation and send her a letter by registered mail telling her what they say. Begin documenting ALL of your discussions with this tenant. If this fails, call an attorney who specializes in landlord tenant matters. You will need to disclose this tenant's hostility to potential buyers.


Q:
What is the difference between a real estate agent and a real estate broker?

Arianna

A:A real estate broker is licensed to act as a fiduciary for principals in a real estate transaction without supervision and can supervise licensed real estate agents. Many brokers, including myself, choose to work for real estate firms for support, technology and brand name recognition.

Q:I've seen these "No Down Payment" plans on late night television and want to know if they are real or just a scam?

Cindy Wu Leonard

A:People in infomercials make a lot of money, but not in real estate. Making money in real estate requires time and a lot of hard work. It isn't a "get rich quick" scheme. The primary 'no money down' option is for Veterans with the VA. The lowest down payment option is FHA, which requires 3.5% down.

Ask local real estate expert Kevin Birmingham: kevin@kevinbirmingham.com

February 2014

Q: What is the average price to remodel a bathroom?
Caroline D.

A:There are quite a few variables to obtain an accurate answer to this question. These include the condition of your bathroom, the finishes you prefer and the contractor that you choose. You may want to check out the new Real Cost Finder, www.houzz.com/remodeling-costs/bath that Houzz.com launched. It has costs for remodeling based on actual projects that homeowners recently completed - it shows a bath remodel in SF averages $25k with the most expensive 5% costing $69k.

Q: If I order a credit report, will it hurt my credit score? Also, if multiple lenders check my credit will that also reduce my score?
Rob P.

A: When you pull your own credit it does not reduce your score. When a 3rd party pulls your credit, it does reduce your score. Having your credit pulled by more than one lender will affect your score, but shouldn’t affect you qualifying for a loan.

Q: What should I know about asbestos?
Alison H.

A: Your question is best answered by an asbestos professional, here is a good resource www.dir.ca.gov/dosh/Asbestos.html

GotAsk local real estate expert Kevin Birmingham

December 2013

Q: I am purchasing a home with cash and was asked to provide proof of funds. I am uncomfortable with showing a bank statement. Is there another way?
Allison H.

A: Most often, people will black out their account number from the statement and then send it over. If you are uncomfortable doing this, have your bank manager write a letter confirming funds are available. I am sure you bank has done this for other customers as many people are uncomfortable showing a bank statement.

Q:Is it standard for a Landlord to ask for 1st month & security to secure said apartment before able to see?
Lisa R.

A: There is never a reason to pay anyone in advance of viewing the property. There are stories of people wiring money to someone purporting to be an agent, and it was completely bogus. Once you wire money, it is gone.

Q:Do you have to put low flushing toilets in a home to sell in San Francisco?
Tony D.

A: You need an inspection and must make any recommended changes – such as installing 1.6 gallon toilets or lower if yours are higher gallon-per-flush. The inspector then records a Certificate.

The Real Estate Answer Man, Kevin Birmingham, is a local real estate expert who answers your questions. He is also a broker and realtor. For more information please contact him at the following email address: kevin@kevinbirmingham.com

November 2013

Q: When buying a fixer-upper, what should I be aware of?

Brian Valandra

A: Besides a good property inspection report, have a contractor that is experienced with renovations have a look at it as well. Once all of that's done, you'll need to decide if you're paying cash to rehab the property or if you're going to need a rehab loan to facilitate this.

Q: What is the best approach to winning a real estate bidding war?

Betty Wong

A: The best approach is unfortunately not available to most people - and that's to buy with cash. This is hard to answer because every seller is different...some are looking for the top price; others care more about particular time frames and conditions. It also can help to create a personal letter addressed to the seller.

Q: My husband and I may be relocating to San Francisco Bay from Ireland; we have two daughters, 5 and 1. Where is the best, safest place to rent a house?

Annette Devine

A: In San Francisco, the majority of the Irish community is in Sunset District. In San Mateo County, the majority is in the city of Burlingame. The Irish Immigration and pastoral Center can be a big help, www.sfiipc.org. They often put out announcements for those looking for housing.

October 2013

Q:I would like to legalize my in-law unit. Is this possible?

Peggy Hirsch

A: One of the largest problems for the Building Inspection Department, Rent Board and home-owners continues to be in-law units. It is estimated that there are approximately 30,000 illegal secondary units in San Francisco. Currently there is no way to legalize these units; however they are regulated by the San Francisco Rent Stabilization Board. The Department of Building Inspection can require owners of property with in-law units to remove any and all non-permitted work, including kitchens.

The Board of Supervisors has tried three times in the past to create legislation to deal with in-laws, but nothing has come of it. It is very likely that legislation to legalize in-laws will be introduced at some point. This would be some sort of in-law amnesty or mandate, and would require broad support from members of the Board. There is no way that any potential legislation would not include input from the San Francisco Tenants Union, making this a powder keg that would pit home-owners against tenants' rights advocates.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevin@kevinbirmingham.com

September 2013

THE REAL ESTATE ANSWER MAN

Q: I have damage to my fence from a storm this winter. Is the damage covered by my homeowner’s insurance policy as a standard loss?

Francine Keogh

A:Fencing is usually covered by the other structures coverage on your policy. They will pay to replace the fence minus the deductible. You may want to get an estimate first to discover if it’s even worth making a claim. Every claim can raise your rates for 5 years so you want to make sure it is worth it.

Q:What are the market conditions are in this SF Bay area at present?

Paul Lynsch

span class="answer">A:It’s a great time to sell. Inventory is at an all-time low and multiple offers over the asking price are common. According to the SF Association of Realtors; about 30% of purchases are being made all cash. If you’re a buyer, you need to be aggressive with your price and terms and make sure you’re fully pre-approved with a local lender.

Q:Last year we tried to sell our home but the potential buyers cancelled because of extensive termite work that needed to be done. Must we disclose this report if all repairs have been made?

Evelyn

span class="answer">A:The law is clear on this, you must disclose this report. You can let buyers know that this work has been completed. It would be a good idea to have the property re-inspected by the pest control company that issued the report prior to putting the home on the market.

The Real Estate Answer Man, Kevin Birmingham, is a local real estate expert who answers your questions. He is also a broker and realtor. For more information please contact him at the following email address: kevin@kevinbirmingham.com

July-August 2013

Q:What is the difference between list and sales prices?

Natalie Greene

A: The bottom line is that list prices are just the first thing that a buyer sees; when it sells, the prices are often going to be higher or lower. Lower list prices tend to attract more buyers and higher list prices tend to do the opposite. Many sellers are listing lower and rejecting the lower offers and taking the last and highest standing offer.

Q: Do builders negotiate prices in this marker?

Anthony Lucas

A: Builders are just getting back into the market so there is a lack of new construction housing. At most you can negotiate for a city transfer tax or an appliance or flooring upgrade. Most of time it’s “take it or leave it.”

Q: What happens with a trustee sale?

Ben Hui

A: The final step is an auction of the property at the courthouse steps. Highest bid wins. It used to be 10% in cash or equivalent and the rest within 7 days. For the most part, they are all cash now. There is no clean title guarantee. It’s not uncommon for liens to show up, so do your due diligence.

The Real Estate Answer Man, Kevin Birmingham, is a local real estate expert who answers your questions. He is also a broker and realtor. For more information please contact him at the following email address: kevin@kevinbirmingham.com

June 2013

Q: Besides a mortgage payment, what other costs should be factored into my monthly payment?

Samantha Lingsch

A: PITI which stands for principal, interest, taxes, insurance. Also if the property is a condo or in certain neighborhoods like St Francis Wood, there are also HOA dues.

Q: What is the best approach to winning a real estate bidding war:

Cindy Davis

A: I have had clients write heartfelt letters and even include photos of the family in order to gain an edge. The fact is that price and terms mean more to getting an offer accepted than any letter can. More and more buyers are writing offers without inspection contingencies, which is a dangerous strategy. If you really love the home and the seller allows, you can order a home inspection prior to submitting your offer.

Q: Is it legal for my landlord to have a shared PG&E meter with my apartment and the apartment below me?

Jeff Hughes

A: It is legal for a landlord to have a common/single utility service for multiple units. What is required is that there is an objective way to divide the bill. It need not be fair or equitable, but hopefully it is.

May 2013

Q: Is it better to buy a house at the end or beginning of a year?

Allison Anderson

A: Traditionally it was best to buy from Thanksgiving until February. This is because less people were looking and sellers were thought to be more motivated. In our current market, the competition is fierce no matter what time of year you are in.

Q: what is the reason to consider a second mortgage?

Tony Yuen

A: Often interest on a 2nd mortgage is tax deductible, and many times the payment on the 2nd loan is actually less than the mortgage insurance payment would have been. Use caution because even though the interest rate may be tax deductible, it’s not a good idea to accumulate more debt than necessary.

Q: What are good questions to ask when interviewing a potential Realtor?

Keith Aeby

A: That depends on if you are hiring them for the buying side or selling side. Your questions should focus on what is most important for you. Experience is important, but so is availability. Ask yourself if you want to work with the area’s top agent if that means working mostly with their assistant. If there is a situation that concerns you, ask the agent how they would handle that situation.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

April 2013

 

Q: Which home update will give you the most return when you sell your home?

—Jeff Hubinsky

A: Paint and staging - they are far cheaper than remodeling, and will provide the most bang for the buck. The stager will often have other suggestions depending on your home - maybe your light fixtures need updating, or your floors refinished, etc. If you’re going to go beyond that and remodel then focus on your kitchen and/or bathrooms.

Q: What is the most tax efficient structure through which to buy residential real estate?

—Sasha Jones


A:
As real estate professionals, we’re constantly advised to not give advice on this subject, but to refer anyone who asks a question like this to a qualified CPA or attorney.

Q: What’s the difference between a loan originator and mortgage broker?

—James Klein

 

A: A mortgage loan originator is defined as one whom, for compensation or gain (or in the expectation of...), takes a residential mortgage loan application or offers to negotiate terms of a mortgage loan. This individual may work for either a bank or a brokerage, or an institution that facilitates both banking and brokering of mortgages.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

March 2013

Q I want to sell my property that is currently leased to section 8 tenants. When I told the tenant my plans to sell, she became very upset. What do I do if she decides to intimidate potential buyers?

Bill Branchini

A First contact the rent board, document your conversation and send her a letter by registered mail telling her what they say. Begin documenting ALL of your discussions with this tenant. If this fails, call an attorney who specializes in landlord tenant matters. You will need to disclose this tenant’s hostility to potential buyers.

Q What is the difference between a real estate agent and a real estate broker?

Arianna

A A real estate broker is licensed to act as a fiduciary for principals in a real estate transaction without supervision and can supervise licensed real estate agents. Many brokers, including myself, choose to work for real estate firms for support, technology and brand name recognition.

Q I’ve seen these “No Down Payment” plans on late night television and want to know if they are real or just a scam?

Cindy Wu Leonard

A People in infomercials make a lot of money, but not in real estate. Making money in real estate requires time and a lot of hard work. It isn’t a “get rich quick” scheme. The primary ‘no money down’ option is for Veterans with the VA. The lowest down payment option is FHA, which requires 3.5% down.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

February 2013

 

Q: Where is the best place in Bay Area to buy a second home as an investment property? I am looking at a price of $300K or less. Jerry Keys

A: Santa Cruz is one place you might consider. With state cutbacks in UC housing and a need for UCSC student housing, they have a strong rental market. Santa Cruz has a significant number of homes for sale in your price range and I can refer you a reputable agent there or throughout the Bay Area.

Q: Does a landlord have to allow a handicapped person to make modifications to a rental unit? Alicia

A: Landlords are required to allow modifications for handicaps as defined by the Americans with Disabilities Act. If the modification is one that can’t be easily removed, have an attorney write a clause in the lease for your specific situation.

Q: We plan to make an offer on a condo with no inspection reports and the seller wants to sell it AS-IS? Ed Wu

A: “AS-IS” is simply means that the seller would rather not make repairs. Both the local and statewide Realtor contracts allow for inspections. If you find a problem while in contract, you can cancel the escrow.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

December 2012

Q: My daughter wants to buy a house and rent it to me. Is there any legality we should be aware of? Danita Gravelle

A: The “legality” is your daughter’s purchase will be classed as an investment for her, instead of as an owner occupied purchase. If she claims that this will be her residence and the lender finds out that it is not, it is considered mortgage fraud.

Q: How do I find a place to rent that will allow a pit bull? Bruce Arendsen

A: As a dog owner myself, I can sympathize with your problem. Call a few property management companies to see if they have general pet policies that prohibit dogs (and pit bulls in particular) or if it varies with each property.

Q: I am currently trying to purchase a short sale property. It’s been 2.5 months so far waiting for an answer. Angelica

A: Unfortunately, there’s really nothing a buyer can do to expedite the process, but your agent should check with the listing agent frequently and make sure that the listing agent calls the lender(s) regularly. You may also want to look at other houses that may fit your needs as there’s no guarantee that the lenders will approve the short sale.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

November 2012

 

Q: Should I expand or buy a larger home? Prop 13 keeps me stuck in my home.

.................... Grace Fahey

A: Before you make your decision whether to expand or move, make sure you look into propositions 60 and 90. These two propositions were designed for seniors who would like to move but are otherwise trapped by their low tax base.


 

Q: If I buy a home for my own primary residence that is tenant occupied, do I have to pay the tenant to leave?

.......................................................................... Lance

A. I know from over 10 years of experience in dealing with rentals that there is no such thing as exemption from eviction controls in San Francisco and it is very common to have to pay a tenant. The good news with a single family home is it’s much easier to get tenants out than other types of properties.


 

Q: I am relocating to San Francisco. I am undecided whether to rent or buy?

............................................................................ Rose Yuen

A: Your decision should be based on your individual goals both short and long term. Do a cost analysis of buying vs. renting. Many people rent in the short term to figure out exactly where they want to buy. Whatever you decide, this is the best time to buy as prices and rates are relatively low.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

October 2012

Q:Do you recommend paying for an inspection on a new construction home?—Aaron Chantal

A:It’s interesting what a good inspector can find in a new construction inspection. Recently a new condo I sold had a broken dishwasher and a bathtub that was not installed property. The tub was repaired without removing it and the dishwasher was replaced.

Q:What are the risks of a reverse mortgage? —Pauline

A:reverse mortgage is a complex loan that lets homeowners borrow money against the equity in their home. It can be a good option for someone low on cash with a lot of home equity. The risk is that roughly 9 percent of homeowners were at risk of foreclosure because of having depleted the equity and not being able to service the loan.

Q:How do we determine renovation/remodeling cost for a home we are interested in buying?—Peter Yee

A:In general contractors do not like giving estimates on homes that are not owned by the potential client. This is because the estimating process takes time and a good contractor does not have much time to spare. Remember that for every $100 a homeowner spends on remodeling there is about $80 worth of increased value.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

September 2012

 

Q: I want to rent my house in SF, what do I
do first? — Wendy

A: It is important not to rent two sections of your house with two different leases, or else you will be defined as a two unit rental and be subject to eviction control and rent control. The SF Apartment Association can recommend property managers for leasing only or full management.

Q: Is there a reason to replace a working water heater with a new tankless water heater? — Lynn Anderson

A: With a standard water heating system, you always run the risk of running low on hot water. With a tankless system, this does not happen. You may want to get estimates now and install the new system when your current water heater breaks.

Q: Should I pay all cash for a SF home? — Gregg S.

A: It is in your best interest to consult a financial advisor and a tax person. Can you use some deductions that the interest on a mortgage loan can give you? If you do buy all cash, you can obtain a mortgage after you own.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

July-Aug 2012

Q: Before selling, how does one decide on what to remodel

Alan Chu

A: Remodeling can be very expensive and does not always create a great return on investment. Generally the best thing you can do is get rid of the clutter, refinish hardwood floors, replace worn carpet, and apply fresh interior paint. Also it is a good idea to obtain a pest report to see if there is dry-rot damage that should be cleared.

Q: I am trying to sell my property with a bad section 8 tenant inside; she intimidates all buyers by asking for drivers licenses from buyers and agents

Bill

A: Do not do anything further without hiring an attorney that specializes in landlord-tenant disputes. The value of an income property is based on location, condition of the property and the inhabitants. The tenant you are describing will have a serious impact on the value of this property. You may want to take the property off the market until the issue is resolved.

Q: We are looking to buy a single family house with an unwarranted “in law” unit. Will we get in trouble for renting it?

Ms. Holman

A: “In law” units are generally un-permitted units. The building department can come in and require the kitchen be removed if a violation is reported. Keep in mind that when you rent an In-law unit, the Rent Board considers the property to be multiple units even if it is a single family home. While single family houses are exempt from rent control, multi-unit buildings are not.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

June 2012

Q:How often should you have a house located in such a foggy, wet climate that can change to such a warm climate, checked out for dry rot due to the elements?

John Demakas

A: The western side of San Francisco has a foggy climate, which allows moisture to penetrate into various parts of the home. Front and rear stairs, bays and the bases of door jams are the areas where dry rot is most likely to occur. Most homeowners obtain inspections only when they buy or sell a property.

Q: If you have OK credit not perfect not bad but somewhat OK, what are the chances of buying a house? Is my down payment going to be a lot?

Jessica Traylor

A: FHA loans are the perfect solution for the first time buyer with OK credit and a low down payment. With an FHA loan your down payment is as little as 3.5%. Most large lending institutions as well as local mortgage brokers offer FHA loans.

Q: Is it common to have a tree inspection before buying a home? We didn’t do it and it cost us 8K - YIKES!

Shura Kelly

A: The two inspections most homebuyer use are a pest/dry-rot inspection and a home inspection (known in SF as a contractor’s inspection). The home inspection may look at landscaping items but only if there is something that stands out. In San Francisco trees that are within 12 feet of a sidewalk need a permit to be removed. Tree removal is expensive and if you have a concern with a tree’s location, it is best to contact a local arborist prior to the close of escrow.

Kevin Birmingham is a licensed real estate broker, have a question for the Real Estate Answer Man? Submit them to kevinb@zephyrsf.com

May 2012