Back to the home-hunting story:
I let a month go by after the Mateo Avenue condo hit the MLS, and finally put in an official request to tour. Once again Matt took care of me; we had gotten to know each other pretty well by this point, to the degree that we started to reminisce about the first property I'd seen way back in the previous year.
Before the tour, I'd spent some time walking around the neighborhood at different times of the day and different days of the week. I was happy with what I had seen - it isn't as fancy as the streets west of Magnolia, but the area was kept up well, there was a good amount of activity on the streets, and overall I got a good vibe off of it. I wandered farther afield, across the tracks, then back again and around the other streets. My favorite aspect was still the access - it's a good walk to the train station, and even shorter to Safeway, Trader Joe's, and the excellent public library - but I dug the spot itself as well.
We learned that a tenant occupied the unit, and waited while she got the kids and headed out, then moved inside. Yup... definitely a tenant and not the owner. Even though the tour had been scheduled for a few days, the place was pretty messy, with half-eaten pizza (at nine in the morning?) and croissant all over the kitchen. Still, by this point I'd gotten pretty good at zeroing in on the important stuff and ignoring the rest. I'd learned to pay good attention to Matt, too, and picked up on some of his observations as well.
Overall, it was nice - not a dream unit, perhaps, but one that definitely fit everything I'd been looking for, and a lot of stuff that I'd been hoping for. It had two bedrooms, which is almost impossible at my budget in Millbrae. It also had two baths - not very useful to me, but the second would be handy if I ever got a roommate or long-term guests. The kitchen was good - it didn't have a spectacular gas oven like the newer condos I'd seen, but it had plenty of cupboards and counter space, which had been fairly recently renovated. It had a nice big balcony - the view is of the back of a big-box store, which isn't great, but on the plus side there's a lot of privacy (no windows facing me), a lot of sky (no other buildings nearby), and if you look up a bit, nice partial views of the Millbrae hills and San Francisco Airport.
I spent more time this go-around than I had on my open house, and Matt and I chatted a bit. We agreed that the unit was overpriced, but otherwise fine - considering that it was 30 years old, it was in quite good shape.
I kept on pondering everything, and eventually decided to go for it. I'd put in a fair offer for what I thought it was worth, and see what happened. At worst, the sellers would just say "no," and at least I'd know to give up on it. If that happened, I was ready to restart my home search or just resign myself to renting for another five years - like I said in a previous post, I'd taken a full inventory of the Millbrae condo market, and seen that there just isn't much out there.
Once again, I submitted the offer wizard on the website. This time Regina got the ticket. As a side note, the wizard is still a bit mysterious to me. From my early reading on the Redfin web site, I had been under the impression that when you start an offer, you can choose which agent will represent you. That never happened with me, though. I'm guessing that if you had someone who you really wanted to use in particular, you could enter that in the notes field and get them. I now think that by default they just hand out the requests to whoever is available.
Regina was also good - as with Sean, she contacted the listing agent to find out the seller's situation and figure out what the timeline would be like. She also sent me a list of comparable properties along with her analysis of the price. She had a higher price in mind than I did, and with some good reason - her comps included recent condo sales near 280, which I had discounted because of how far away they are, but since most people buy into Millbrae for the school district, it seemed valid to include them. I pointed out another sale that she hadn't included - one which was quite a bit bigger, but sold for noticeably less, and was closer to this property than the other comps. She agreed that that was a good comp. I re-ran my numbers taking all the data into account, and settled on a fair price that was about 7% under the seller's listing price.
There were a couple of odd things about this transaction. One early issue was the disclosures; on previous offers, I had received disclosures early on and been encouraged to review them prior to making an offer. This time around, Regina urged me to put together the offer prior to receiving the disclosures. Again, that seemed strange - if there was anything in there that was a turn-off, then I'd be wasting everyone's time by making an offer; and, from the seller's perspective, it seems like they'd want me to know everything I could up front. If I make an offer for $X, based on all the disclosures, and they accept, then I can't come back later and ask them to take off $Y due to issues that they had disclosed. On the other hand, if I make an offer for $X without any disclosures, then even after they accept, I can ask them to take off $Y to deal with things that they already knew about; this makes it harder for the seller to compare offers, since different buyers will grade issues differently, and they run the risk of accepting an offer that the buyer will end up backing out of altogether later on.
In any case, I did end up getting the disclosures just prior to when we were going to put in the offer, so I did get a chance to read them. This should have been a good clue of how the process would continue. Everyone on the selling side was somewhat removed from the transaction - the listing agent was a part-timer who was helpful but not always quickly responsive; the sellers didn't live in the property; and so on. I think that if they had been a bit more organized, I could have gotten the disclosures sooner and moved forward more quickly.
In any case, the disclosures were fine, far less scary than the Palm one. Bay Area disclosures are fairly long, with a good amount of boilerplate, but still well worth reading. The seller fills out a long list of questions, mainly yes/no with space for explaining negative answers. It covers things like structural defects, neighborhood nuisances, odors, and so on. I learned the details about some recent renovations, which was helpful. The disclosures also include observations from the listing agent as part of their walk-through. In my case, there weren't any bombshells here, just a few fairly minor things that we had noticed during my tour - a missing lock on the balcony door, for example. Nothing seemed like it would seriously ding my offer price, so I gave a thumbs-up, submitted the offer, then crossed my fingers and waited.
Friday, October 29, 2010
Friday, October 22, 2010
Freakish Depth
This is probably a good time to sing the praises of Property Shark. I should start by saying that Redfin has one of the best web sites, period - not just the best real estate web site, but best overall. It combines an almost comically broad range of useful information about homes, and somehow manages to present it in an engaging and highly readable manner. It's responsive, fun, informative, and incredibly addictive.
As I previously mentioned, I had attended a Redfin homebuying seminar late last year. It was very informative and helpful, and one of the things that pushed me toward working with Redfin. The presenter included an extremely useful list of helpful web sites, and made particular note of Property Shark, which she cheerfully explained had a lot of data that even Redfin doesn't have.
And, boy, does it ever. Property Shark isn't nearly as pretty as Redfin, but the amount of information it has is amazing, maybe even a little scary. You can search for properties in any supported area, and pull out an incredible amount of information from there. Things like:
As you can see, I'm a fan. I think Property Shark is a harbinger in the same way Redfin is: the real estate model is moving from the traditional closed, secretive, divided world that kept consumers at arms-length from the transaction, and moving towards a more modern Web-ish approach of empowered consumers who drive their own searches and be responsible for their own education. It will be fascinating to see how the real estate world I sell in will be different from the evolving world in which I bought.
As I previously mentioned, I had attended a Redfin homebuying seminar late last year. It was very informative and helpful, and one of the things that pushed me toward working with Redfin. The presenter included an extremely useful list of helpful web sites, and made particular note of Property Shark, which she cheerfully explained had a lot of data that even Redfin doesn't have.
And, boy, does it ever. Property Shark isn't nearly as pretty as Redfin, but the amount of information it has is amazing, maybe even a little scary. You can search for properties in any supported area, and pull out an incredible amount of information from there. Things like:
- The owner's name
- The owner's address (thus providing one of the only ways that you can determine the owner-occupancy ratio of a building or area)
- Complete sales price for the property. You might see that a house sold for $40,000 in 1945, for $120,000 in 1990, for $800,000 in 2006. If you see that it's on the market today for $700,000, you know that the seller is already accepting a major loss on the property.
- The loans on the property. So a house might show, for example, a $417,000 first loan from Wells Fargo, and a second $105,000 loan from Citibank. Again, this is amazing information. You can check to see whether the seller is likely underwater - if they bought in 2006 or 2007, have loans close to the purchase price, and are asking for something close to the last sales price, then they are probably already as low as they can go without negotiating a short sale. Conversely, if a home sold 15 years ago with a sensible loan and the owner is asking twice as much for it now, they may have considerably more flexibility.
- A ton of maps! There's a population density graph, which seems to operate on a neighborhood-by-neighborhood basis, that shows the number of residents per square mile in an area.
- There's a population age map, which shows the median age of each neighborhood. (This is an area where you can really visibly see Millbrae's strong dichotomy between young and old.)
- There's an environmental hazard map, which shows EPA-designated hazardous sites, which range from scary brownfields to innocuous photo development chemicals.
- There's an earthquake hazard map, which shows which areas are vulnerable to liquefaction, sliding, or other problems. (Lots of this in the Bay Area, but Millbrae is surprisingly safe.)
- A flood zone map. This was yet another incredibly useful find; usually, you can't find this out until near the end of closing or with a ton of legwork to track down paper FEMA maps from a government agency. The map breaks down areas in a 100-Year Flood Zone, a 500-Year Flood Zone, or other area of concern. Having access to this let me determine which areas I could feel safe about and which needed concern. Nearly all of Burlingame east of El Camino Real is in a flood zone, and a lot of the western area is as well; Millbrae had a few tendrils of 500-year flood zones, but none ran through the blocks where I was interested. Success!
- The public records for a property. This seems especially invaluable for FSBOs or older transactions; you can find out the official square footage, number of bedrooms, and so on. The Bay Area (and probably much of California) has a pretty significant problem with people performing unpermitted renovations, done without county approval, in an attempt to dodge a property tax increase; you can spot where a seller's statements don't line up with the official word, and be prepared to deal with the extra headaches involved with an illegal property addition.
As you can see, I'm a fan. I think Property Shark is a harbinger in the same way Redfin is: the real estate model is moving from the traditional closed, secretive, divided world that kept consumers at arms-length from the transaction, and moving towards a more modern Web-ish approach of empowered consumers who drive their own searches and be responsible for their own education. It will be fascinating to see how the real estate world I sell in will be different from the evolving world in which I bought.
Friday, October 15, 2010
Searching through the Rough
Around this time, I started to have a crisis of faith. By this point I'd been closely following the Millbrae-area market for about half a year; the more I learned, the more I liked the area, but also the more I realized what a difficult thing I was looking for. There just are not that many condo developments in the area. As a matter of fact, I had a complete list of every one in the whole city.
Burlingame had just a handful of options:
I decided to take a little break - after all, the commute wasn't killing me, and perhaps the situation would change. Along the way, I kept monitoring an interesting property. In addition to my Redfin emails, I also had subscribed to Craigslist RSS feeds that reported on condos advertised in Millbrae and Burlingame. Most of these duplicated information in the MLS, but some were FSBOs, and one in particular caught my eye: a FSBO condo on Mateo Avenue. It seemed overpriced, but otherwise matched what I was looking for. I decided to wait and see what would happen.
The property didn't seem to be advertised too heavily; after that first Craigslist post, nothing else came up, and I never saw it on any of the major FSBO web sites. About a month later, it popped up again, this time with agent representation but without being listed on the MLS. I decided to keep my distance - it still bore the same high price, and without the MLS connection I wouldn't be able to use Redfin. It also had mysteriously lost about 90 square feet between the time it was a FSBO and when an agent took it.
About a month after that, it finally hit the MLS. Still at the same price. I decided to wait for now - I didn't want to play my hand by seeming too eager, and by now I knew the market well enough to feel pretty sure that it wouldn't get snatched up at the current price. I knew from advice and observation that well-priced homes were selling quickly while overpriced homes languished for a month or more, so I figured that waiting for a while would give the seller time to adjust to more realistic expectations.
After a couple of weeks, the seller hosted an open house. I still wasn't ready to officially tour, but decided to drop by. It's kind of funny that I didn't do my first open house until towards the end of my search; I'd been scared off by warnings early on about attending open houses without representation. Listing agents can use them to scout for new clients, and if you aren't already represented by an agent and decide to make an offer after attending an open house, the listing agent becomes your agent, which leads to a conflict of interest. By now, though, I was happily represented by Redfin, and didn't think I'd have a problem.
As it turns out, I needn't have worried. I attended two open houses, and both were very pleasantly low-key, with no pressure to sign a register or do other stuff I was worried about. First I attended a house-house open house: an interesting, very old small house on Magnolia Avenue that had dropped by hundreds of thousands of dollars from its initial listing, and, if it dropped another two hundred thousand, would finally hit my range. It was nothing spectacular, but still intriguing: nice large lot, cute small house, a bathroom that had probably been renovated in the 1940's, an old-fashioned detached garage, very little set-back from the sidewalk. I thanked the agent and moved on to Mateo.
Once again, I had timed my visit to coincide with the arrival of Caltrain. The open house was on a Sunday, so I had a narrower window. The building is on the east side of El Camino Real, about a block from the tracks, but set much farther back than the California Avenue building had been. The agent greeted me when I arrived, then took a call while I wandered around. The train came by while I stood near an open window. It was audible, but infinitely better than the California Avenue one, and without any vibration. With time, I was confident that it would just become background noise, like a passing car; similarly, my current apartment is near a light rail line, and after the first few weeks I no longer noticed the sound.
The unit itself seemed crowded, but mainly because of all the furniture. It was occupied by tenants, and while it had been cleaned up, it didn't show as well as the other condos I'd seen. Still, nothing seemed wrong with it, and it was in better shape than the Palm Avenue unit that I had started making an offer on. I wandered around, checked for mold, looked under the sinks, played with the doors and light switches. Everything seemed in good order.
Still, the fact remained that it was overpriced. This wasn't just a subjective feeling, and wasn't taken from the popular online home estimation tools like Zillow and CyberHomes. I kept crunching possible values based on different methodologies, and kept coming up with a pretty consistent price range that was quite a bit less than the asking price. At the simplest end, I took the price per square foot for similarly sized and aged units in Millbrae/Burlingame that had recently sold, and adjusted it for this unit's size. I also took the most recent sales prices in the complex (which required going back to 2004-2005, during the boom but before the peak of the bubble), and tracked where those prices would go assuming that they followed the same overall price changes of Millbrae as a whole. Doing this quantitative work helped me gain a lot of confidence, and made me more secure in deciding to wait until I could get a better price.
- Park Broadway - Nice, but expensive, and too far away from the station and downtown for me.
- 88 South Broadway - Insanely expensive.
- Belamor - Too expensive, uncertainty around construction status.
- Palm Avenue - Perfect location and nice size, but worrying HOA situation.
- 15 Magnolia - Only 10 units, never available.
- 75 Magnolia - Only 4 units, never available.
- Mateo Avenue - Only 10 units, more on this later.
- 1396 El Camino Real - Too far away from the station and downtown, practically in San Bruno.
- Windwater Mills - On a busy street near the high school, plus some worrying online reports.
Burlingame had just a handful of options:
- California Avenue - Great units, but pricey and too close to the tracks.
- Ogden - In retrospect, I wish I had pursued the one-bedroom from here at the end of last year, but I had been too focused on Belamor. Nothing else entered the market during the spring or summer of my search.
I decided to take a little break - after all, the commute wasn't killing me, and perhaps the situation would change. Along the way, I kept monitoring an interesting property. In addition to my Redfin emails, I also had subscribed to Craigslist RSS feeds that reported on condos advertised in Millbrae and Burlingame. Most of these duplicated information in the MLS, but some were FSBOs, and one in particular caught my eye: a FSBO condo on Mateo Avenue. It seemed overpriced, but otherwise matched what I was looking for. I decided to wait and see what would happen.
The property didn't seem to be advertised too heavily; after that first Craigslist post, nothing else came up, and I never saw it on any of the major FSBO web sites. About a month later, it popped up again, this time with agent representation but without being listed on the MLS. I decided to keep my distance - it still bore the same high price, and without the MLS connection I wouldn't be able to use Redfin. It also had mysteriously lost about 90 square feet between the time it was a FSBO and when an agent took it.
About a month after that, it finally hit the MLS. Still at the same price. I decided to wait for now - I didn't want to play my hand by seeming too eager, and by now I knew the market well enough to feel pretty sure that it wouldn't get snatched up at the current price. I knew from advice and observation that well-priced homes were selling quickly while overpriced homes languished for a month or more, so I figured that waiting for a while would give the seller time to adjust to more realistic expectations.
After a couple of weeks, the seller hosted an open house. I still wasn't ready to officially tour, but decided to drop by. It's kind of funny that I didn't do my first open house until towards the end of my search; I'd been scared off by warnings early on about attending open houses without representation. Listing agents can use them to scout for new clients, and if you aren't already represented by an agent and decide to make an offer after attending an open house, the listing agent becomes your agent, which leads to a conflict of interest. By now, though, I was happily represented by Redfin, and didn't think I'd have a problem.
As it turns out, I needn't have worried. I attended two open houses, and both were very pleasantly low-key, with no pressure to sign a register or do other stuff I was worried about. First I attended a house-house open house: an interesting, very old small house on Magnolia Avenue that had dropped by hundreds of thousands of dollars from its initial listing, and, if it dropped another two hundred thousand, would finally hit my range. It was nothing spectacular, but still intriguing: nice large lot, cute small house, a bathroom that had probably been renovated in the 1940's, an old-fashioned detached garage, very little set-back from the sidewalk. I thanked the agent and moved on to Mateo.
Once again, I had timed my visit to coincide with the arrival of Caltrain. The open house was on a Sunday, so I had a narrower window. The building is on the east side of El Camino Real, about a block from the tracks, but set much farther back than the California Avenue building had been. The agent greeted me when I arrived, then took a call while I wandered around. The train came by while I stood near an open window. It was audible, but infinitely better than the California Avenue one, and without any vibration. With time, I was confident that it would just become background noise, like a passing car; similarly, my current apartment is near a light rail line, and after the first few weeks I no longer noticed the sound.
The unit itself seemed crowded, but mainly because of all the furniture. It was occupied by tenants, and while it had been cleaned up, it didn't show as well as the other condos I'd seen. Still, nothing seemed wrong with it, and it was in better shape than the Palm Avenue unit that I had started making an offer on. I wandered around, checked for mold, looked under the sinks, played with the doors and light switches. Everything seemed in good order.
Still, the fact remained that it was overpriced. This wasn't just a subjective feeling, and wasn't taken from the popular online home estimation tools like Zillow and CyberHomes. I kept crunching possible values based on different methodologies, and kept coming up with a pretty consistent price range that was quite a bit less than the asking price. At the simplest end, I took the price per square foot for similarly sized and aged units in Millbrae/Burlingame that had recently sold, and adjusted it for this unit's size. I also took the most recent sales prices in the complex (which required going back to 2004-2005, during the boom but before the peak of the bubble), and tracked where those prices would go assuming that they followed the same overall price changes of Millbrae as a whole. Doing this quantitative work helped me gain a lot of confidence, and made me more secure in deciding to wait until I could get a better price.
Friday, October 8, 2010
Too Slow, Too Loud
By now I was fully plugged in to the Redfin alert system. Every morning I would receive an email providing an update on the condo market in Millbrae and Burlingame: what properties had hit the market, which had dropped their prices, which had sold and at what price. This was incredibly useful, as it let me get a feel for the overall trends in the market, even beyond the (very) narrow area I was focusing on.
On a Tuesday morning, I saw a fascinating property hit the list: a small 1-bedroom condo at 88 South Broadway. I've been aware of this development for years, but hadn't thought that it had any 1-bedrooms. It was on the smallish size, but extremely well priced. A little too well priced. The only way I could imagine explaining the low price was if it was on the first floor facing directly onto El Camino Real. Still, I was sufficiently intrigued to request a tour.
I put in the tour request on that Tuesday. I got in touch with Matt, but we weren't able to schedule a showing before Saturday. When I showed up on Saturday, I found that it was more or less mobbed, with perhaps five or six parties squeezed into this small one-bedroom space, walking around and chatting. Matt was juggling me and another client. I really liked what I saw. The building is almost brand-new, having finished in 2007, and while this unit is less luxurious than most, it was still in great shape and had a really nice-looking kitchen.
So, why the low price? It was on the ground floor, but was at the back of the complex, facing onto South Broadway. Privacy was slightly limited, since a walkway came right outside the window. Matt had also learned from the listing agent that there were some complications with the unit - it was technically a "caretaker's unit," and theoretically intended for occupation by the property manager. Still, in practice, it could be freely bought and sold; the only restriction was that, if you rented it, you couldn't charge more than a certain amount for rent... I think that the limit was something like $1200 a month, pretty reasonable. So that helped explain the low price, but still, the restrictions didn't bother me, and this seemed like a once-in-a-lifetime chance to get into the development.
I'd toured the property Saturday. I started the offer wizard on Saturday night. Redfin agents have the weekends off, which I do not begrudge them, so I didn't hear from Sean until mid-Monday. He got in touch with the listing agent. On Tuesday, I learned that they had already accepted an offer and the property was no longer available. The next day, I saw it pop up as "Pending" in my email inbox.
That was probably the low point of my relationship with Redfin, although I don't know that it's necessarily their fault. For this very well-priced property with a lot of interest, getting in a few days earlier would have given me a shot at buying the property. Now, I don't know what price it ended up selling for, and it's totally possible that a bidding war would have pushed it beyond what I would be willing to pay for a small one-bedroom. Also, I don't know that a traditional agent would have been able to get me in to see it earlier, or been able to communicate my interest any more quickly to the sellers. Still, this was a case where Redfin's model seemed to suffer a little.
A little while later I toured a townhouse that was on the Burlingame side. This was the first townhouse I'd seen, and I have to admit to liking it. It had an integrated two-car garage, three stories, plenty of space, a balcony... lots of the stuff that I associate with traditional residential houses, but still at a (relatively) affordable price and in a great area.
The catch? As I had instantly noted on Google Maps, it was next to the train tracks. I went ahead and toured it since I wasn't sure if this particular unit was next to the tracks or farther back in the complex. Nope - it was front and center. I toured it in the morning during commuting hours, and paid attention as two Caltrains rumbled by. Nope... not happening. Even with the windows closed, it was quite loud, and while the floor didn't exactly shake, you could still feel the movement. I gave a sigh, and let that one go.
On a Tuesday morning, I saw a fascinating property hit the list: a small 1-bedroom condo at 88 South Broadway. I've been aware of this development for years, but hadn't thought that it had any 1-bedrooms. It was on the smallish size, but extremely well priced. A little too well priced. The only way I could imagine explaining the low price was if it was on the first floor facing directly onto El Camino Real. Still, I was sufficiently intrigued to request a tour.
I put in the tour request on that Tuesday. I got in touch with Matt, but we weren't able to schedule a showing before Saturday. When I showed up on Saturday, I found that it was more or less mobbed, with perhaps five or six parties squeezed into this small one-bedroom space, walking around and chatting. Matt was juggling me and another client. I really liked what I saw. The building is almost brand-new, having finished in 2007, and while this unit is less luxurious than most, it was still in great shape and had a really nice-looking kitchen.
So, why the low price? It was on the ground floor, but was at the back of the complex, facing onto South Broadway. Privacy was slightly limited, since a walkway came right outside the window. Matt had also learned from the listing agent that there were some complications with the unit - it was technically a "caretaker's unit," and theoretically intended for occupation by the property manager. Still, in practice, it could be freely bought and sold; the only restriction was that, if you rented it, you couldn't charge more than a certain amount for rent... I think that the limit was something like $1200 a month, pretty reasonable. So that helped explain the low price, but still, the restrictions didn't bother me, and this seemed like a once-in-a-lifetime chance to get into the development.
I'd toured the property Saturday. I started the offer wizard on Saturday night. Redfin agents have the weekends off, which I do not begrudge them, so I didn't hear from Sean until mid-Monday. He got in touch with the listing agent. On Tuesday, I learned that they had already accepted an offer and the property was no longer available. The next day, I saw it pop up as "Pending" in my email inbox.
That was probably the low point of my relationship with Redfin, although I don't know that it's necessarily their fault. For this very well-priced property with a lot of interest, getting in a few days earlier would have given me a shot at buying the property. Now, I don't know what price it ended up selling for, and it's totally possible that a bidding war would have pushed it beyond what I would be willing to pay for a small one-bedroom. Also, I don't know that a traditional agent would have been able to get me in to see it earlier, or been able to communicate my interest any more quickly to the sellers. Still, this was a case where Redfin's model seemed to suffer a little.
A little while later I toured a townhouse that was on the Burlingame side. This was the first townhouse I'd seen, and I have to admit to liking it. It had an integrated two-car garage, three stories, plenty of space, a balcony... lots of the stuff that I associate with traditional residential houses, but still at a (relatively) affordable price and in a great area.
The catch? As I had instantly noted on Google Maps, it was next to the train tracks. I went ahead and toured it since I wasn't sure if this particular unit was next to the tracks or farther back in the complex. Nope - it was front and center. I toured it in the morning during commuting hours, and paid attention as two Caltrains rumbled by. Nope... not happening. Even with the windows closed, it was quite loud, and while the floor didn't exactly shake, you could still feel the movement. I gave a sigh, and let that one go.
Friday, October 1, 2010
Scared Off
Like I said: far too little happened, then far too much.
I'll skip my description of the remaining units at Palm Avenue. I eventually did decide to start an offer on one of them, a short sale. It seemed perfectly situated - top floor, corner unit, views of the hills and the park - and I thought it would be worth the hefty price and HOA fee, despite the fact that it wasn't in great shape. (It wasn't decrepit or anything, but the doors stuck, and was really cluttered.)
I did the Redfin offer wizard thing. This works pretty well. Because this was a short sale, it wouldn't fit into the normal Redfin model - typically they refund up to 50% of their commission, but it's only 15% for short sales. Their web site says that these deals are handled by special affiliated agents, but in my case it was a Redfin team member, Sean Sullivan. He was extremely nice and helpful, like everyone I met at Redfin. He talked me through the process, got the disclosures, and sent them over.
Well.
I'd been cautiously optimistic before, but after reading the disclosures, I was ready to run away screaming. The seller seems to have been barely conscious while filling it out. Not only were many sections indecipherable, but many were just blatantly wrong. I mean, yeah, I can see why a seller might not want to admit certain things, but why on earth would you say "No" to the question "Is this property a condominium?" when, uh, it's a condominium? Are you trying to fool someone, who things that your single-family house happens to be elevated thirty feet in the air and surrounded by other single-family houses?
I chatted with Sean, and we mutually agreed that it wasn't worth pursuing. In addition to the "haphazard" (to use Sean's wonderfully understated phrase) manner in which the seller had filled out the disclosures, the seller's agent's disclosures also listed some serious stuff that I had overlooked, like mold and some encroachment issues. Sean's basic message was, "If you want to move ahead with this, we can, but personally I'd recommend against it." I agreed, and from that moment on felt confident that Redfin was on my side.
I'll skip my description of the remaining units at Palm Avenue. I eventually did decide to start an offer on one of them, a short sale. It seemed perfectly situated - top floor, corner unit, views of the hills and the park - and I thought it would be worth the hefty price and HOA fee, despite the fact that it wasn't in great shape. (It wasn't decrepit or anything, but the doors stuck, and was really cluttered.)
I did the Redfin offer wizard thing. This works pretty well. Because this was a short sale, it wouldn't fit into the normal Redfin model - typically they refund up to 50% of their commission, but it's only 15% for short sales. Their web site says that these deals are handled by special affiliated agents, but in my case it was a Redfin team member, Sean Sullivan. He was extremely nice and helpful, like everyone I met at Redfin. He talked me through the process, got the disclosures, and sent them over.
Well.
I'd been cautiously optimistic before, but after reading the disclosures, I was ready to run away screaming. The seller seems to have been barely conscious while filling it out. Not only were many sections indecipherable, but many were just blatantly wrong. I mean, yeah, I can see why a seller might not want to admit certain things, but why on earth would you say "No" to the question "Is this property a condominium?" when, uh, it's a condominium? Are you trying to fool someone, who things that your single-family house happens to be elevated thirty feet in the air and surrounded by other single-family houses?
I chatted with Sean, and we mutually agreed that it wasn't worth pursuing. In addition to the "haphazard" (to use Sean's wonderfully understated phrase) manner in which the seller had filled out the disclosures, the seller's agent's disclosures also listed some serious stuff that I had overlooked, like mold and some encroachment issues. Sean's basic message was, "If you want to move ahead with this, we can, but personally I'd recommend against it." I agreed, and from that moment on felt confident that Redfin was on my side.
Friday, May 14, 2010
New Condo Tours
So, exactly what have I been up to since my last post back in December? That is, almost six months ago?
Waiting and seeing, mostly. I'd become increasingly interested in Millbrae as my target area, but had also come to realize that there just weren't a lot of options out there in my price range. There are very few older condos in Millbrae, and the newer ones are darn expensive. Since I wasn't in a big rush to move, I decided to wait until the Millbrae Paradise units came on to the market; if they were reasonably priced, as seemed likely, then I would proceed. I was worried that, if I picked something else in the meantime, I'd feel like a dud when Millbrae Paradise came online if it turned out to be a better deal.
So, for the most part, I've been monitoring Redfin and Craigslist - or, rather, reacting to the subscriptions that I have set up on those sites for notices of new listings - but hadn't been actively touring anything. Finally, Millbrae Paradise started touring, so I got back in touch with Redfin and set up a tour; along the way, I also decided to visit Park Broadway, which had always been a marginal choice for me but seemed like a good basis for comparison since it's the newest nearby construction.
I first discovered that, thanks to the vagaries of Redfin's territory division, the area I was interested in (southern Millbrae and northern Burlingame) was divided between two totally different offices. Burlingame is covered by the Peninsula team ("Redwood City to San Mateo", though they do handle points north and south as well), while Millbrae is covered by the San Francisco/Marin team. I didn't just have a new field agent, but a whole new office as well. I just sort of shrugged it off and went with it, though. I was happy to see that, even though it had been more than four months since my last Redfin tour, they still had all my approval stuff on file and I didn't need to give them anything more to keep going.
Millbrae Paradise isn't listed on the MLS, so I submitted a tour request for a Park Broadway loft that was listed, and in the tour notes also requested a tour of Millbrae Paradise. I indicated my flexibility for tour times. This was towards the end of April, so I was kind of pushing to do it soon; in the best case, I figured, I'd check out Millbrae Paradise, it would be totally awesome and affordable, and I could quickly get in an offer and do a double-dip on the federal and state tax credits as a first-time homebuyer of a new construction condo.
First up was Park Broadway. It ended up being much nicer than I had thought. They've dropped the prices of these 1-bedroom loft units substantially, most recently another $50k. I had never bothered to visit because I was weirded out by the fact that they directly face onto El Camino Real at street level. I was pleasantly surprised to note that, at least in the model unit, the noise was practically unnoticeable, and with the demo window treatments, you got a lot of light without feeling like you were sitting next to a highway. It helps that these units are set a bit below street level, behind a railing that separates them from the street and public sidewalk. Plus, they're just huge; even though they are only one bedroom, they are extremely spacious. Despite my reservations, I found myself actually considering grabbing one; it fit within my price range, looked great, and was freaking huge. Ultimately, though, I decided that the siting was just a non-starter for me. If I'm going to pay Bay Area prices for real estate, I want to be able to enjoy Bay Area weather, and it was depressing to think that I'd need to always keep the windows shut and stay indoors when I was home.
Next up came Millbrae Paradise. I'd patiently been waiting a long time for them to finish, and was glad to finally get inside, but they clearly have a lot more left to go; even though the model units are ready, there's a lot of construction happening throughout. After a little initial confusion over exactly where the sales center is (a sign points into an adjacent parking lot, while the actual trailer is farther up the street), I met the very pleasant sales associates. I was turned off by how unforthcoming they were about the prices on the units; apparently this is fairly typical for new construction, but still, I would have really appreciated a straight answer regarding how much something costs. I eventually figured out that even their cheapest 1-bedroom unit (a smallish condo on the second floor) would be going for a cool $100k more than my maximum budget. Yikes! I felt glum - I'd staked too much on a couple of words on their website, which boasted about "Affordable Elegance"; I guess we have different definitions of "affordable." As long as I was finally there, though, I went ahead and did the tour.
The models do look really nice. They are just a little slap-dash - I thought that their cabinets were extremely modern, but it turns out that the contractors just had forgotten to attach the knobs. On the whole, I could really see myself living there, which just made me more bummed that they were outside my range. Even though the rational part of my mind realizes that the quality of finishes and appliances are the least important aspects of a home, far behind the importance of location and solid construction, there's still an undeniable visceral reaction that I experience when I walk into a place that just feels really nice and high-quality.
We finished the tour, went back to the sales trailer, I sat down, we chatted just a little longer, I asked about a particular unit, they again wouldn't tell me the price, but said that they could speak with the manager. I said "No, thanks," and left.
All in all, a bit of a bummer. I spent the next day moping around; I hadn't realized until then just how thoroughly I had convinced myself that I would end up living there.. Still, what was done was done. I decided to make a clean break, put Millbrae Paradise (which, inexplicably, has now changed its name back to Belamor again) out of my mind, and decided where to go from there.
Waiting and seeing, mostly. I'd become increasingly interested in Millbrae as my target area, but had also come to realize that there just weren't a lot of options out there in my price range. There are very few older condos in Millbrae, and the newer ones are darn expensive. Since I wasn't in a big rush to move, I decided to wait until the Millbrae Paradise units came on to the market; if they were reasonably priced, as seemed likely, then I would proceed. I was worried that, if I picked something else in the meantime, I'd feel like a dud when Millbrae Paradise came online if it turned out to be a better deal.
So, for the most part, I've been monitoring Redfin and Craigslist - or, rather, reacting to the subscriptions that I have set up on those sites for notices of new listings - but hadn't been actively touring anything. Finally, Millbrae Paradise started touring, so I got back in touch with Redfin and set up a tour; along the way, I also decided to visit Park Broadway, which had always been a marginal choice for me but seemed like a good basis for comparison since it's the newest nearby construction.
I first discovered that, thanks to the vagaries of Redfin's territory division, the area I was interested in (southern Millbrae and northern Burlingame) was divided between two totally different offices. Burlingame is covered by the Peninsula team ("Redwood City to San Mateo", though they do handle points north and south as well), while Millbrae is covered by the San Francisco/Marin team. I didn't just have a new field agent, but a whole new office as well. I just sort of shrugged it off and went with it, though. I was happy to see that, even though it had been more than four months since my last Redfin tour, they still had all my approval stuff on file and I didn't need to give them anything more to keep going.
Millbrae Paradise isn't listed on the MLS, so I submitted a tour request for a Park Broadway loft that was listed, and in the tour notes also requested a tour of Millbrae Paradise. I indicated my flexibility for tour times. This was towards the end of April, so I was kind of pushing to do it soon; in the best case, I figured, I'd check out Millbrae Paradise, it would be totally awesome and affordable, and I could quickly get in an offer and do a double-dip on the federal and state tax credits as a first-time homebuyer of a new construction condo.
First up was Park Broadway. It ended up being much nicer than I had thought. They've dropped the prices of these 1-bedroom loft units substantially, most recently another $50k. I had never bothered to visit because I was weirded out by the fact that they directly face onto El Camino Real at street level. I was pleasantly surprised to note that, at least in the model unit, the noise was practically unnoticeable, and with the demo window treatments, you got a lot of light without feeling like you were sitting next to a highway. It helps that these units are set a bit below street level, behind a railing that separates them from the street and public sidewalk. Plus, they're just huge; even though they are only one bedroom, they are extremely spacious. Despite my reservations, I found myself actually considering grabbing one; it fit within my price range, looked great, and was freaking huge. Ultimately, though, I decided that the siting was just a non-starter for me. If I'm going to pay Bay Area prices for real estate, I want to be able to enjoy Bay Area weather, and it was depressing to think that I'd need to always keep the windows shut and stay indoors when I was home.
Next up came Millbrae Paradise. I'd patiently been waiting a long time for them to finish, and was glad to finally get inside, but they clearly have a lot more left to go; even though the model units are ready, there's a lot of construction happening throughout. After a little initial confusion over exactly where the sales center is (a sign points into an adjacent parking lot, while the actual trailer is farther up the street), I met the very pleasant sales associates. I was turned off by how unforthcoming they were about the prices on the units; apparently this is fairly typical for new construction, but still, I would have really appreciated a straight answer regarding how much something costs. I eventually figured out that even their cheapest 1-bedroom unit (a smallish condo on the second floor) would be going for a cool $100k more than my maximum budget. Yikes! I felt glum - I'd staked too much on a couple of words on their website, which boasted about "Affordable Elegance"; I guess we have different definitions of "affordable." As long as I was finally there, though, I went ahead and did the tour.
The models do look really nice. They are just a little slap-dash - I thought that their cabinets were extremely modern, but it turns out that the contractors just had forgotten to attach the knobs. On the whole, I could really see myself living there, which just made me more bummed that they were outside my range. Even though the rational part of my mind realizes that the quality of finishes and appliances are the least important aspects of a home, far behind the importance of location and solid construction, there's still an undeniable visceral reaction that I experience when I walk into a place that just feels really nice and high-quality.
We finished the tour, went back to the sales trailer, I sat down, we chatted just a little longer, I asked about a particular unit, they again wouldn't tell me the price, but said that they could speak with the manager. I said "No, thanks," and left.
All in all, a bit of a bummer. I spent the next day moping around; I hadn't realized until then just how thoroughly I had convinced myself that I would end up living there.. Still, what was done was done. I decided to make a clean break, put Millbrae Paradise (which, inexplicably, has now changed its name back to Belamor again) out of my mind, and decided where to go from there.
Tuesday, May 11, 2010
The Pre-Approval Aeneid
Well!
It's been a while, hasn't it? I apologize. For a long time, nothing much was happening on the condo front. Then, too much was happening. I'll try and work through the backlog here, in roughly chronological order, to the best of my recollection.
First topic: financing!
I previously described getting pre-approved for a mortgage. You can get pre-approved from any lender at all; you aren't obligated to get a loan from them, and in fact, many people will get pre-approved from a traditional bank or broker that gives them great service, and then get their final loan from a cheaper source. However, I wanted to go ahead and get pre-approved from the lender I was most likely to close with, so I shopped rates for two weeks, and ended up with San Mateo Credit Union.
Because this is the first time I had gotten pre-approved, I assumed that my experiences were typical. In particular, I was surprised that, contrary to my expectations, they asked for a deposit and would only pre-approve me for a specific amount, one I had to guess myself. Well, it turns out that that isn't the way everyone operates!
A pre-approval is only good for a certain time, in my case 2-3 months. After that, you should renew it. In my case, though, I really didn't want to. Every time you renew a pre-approval, the lender pulls your credit again, which causes your credit score to drop a little more, which makes it harder for you to get a loan. Yeah, I know, crazy, right? As a result, I let my pre-approval lapse a few times, only renewing it when I thought there was a good chance that I would be making an offer soon.
Most recently, that was in early May. I had decided to slightly change the range of properties I was looking at, which required a bump up in my pre-approval limit. I felt comfortable going above it; I had chosen the original amount more or less at random, based on my comfort level at the time and expecting that my lender would automatically adjust it up or down to the "real" limit. Since then, I had just been refreshing the same amount, but now I wanted to hit a specific target; my finances have improved since my first round, and I felt comfortable with a bigger figure.
Since it had been so long since my original submission, the folks at the credit union asked me to start my application over again. Which was fine; because I was asking for more, I wanted to be sure that they saw my most recent paycheck, bank statements, etc. I got to the end of the application, and came to an ugly realization - they were asking me for a $250 deposit, but unlike the last time, this was non-refundable. If I went ahead with a loan, they would apply it to my closing costs, but otherwise, they would just keep it.
Needless to say, I was peeved. This was a pre-approval! I understand that they incur a cost to pull my credit, but even so, if they're going to charge me for it they should just charge for the pull. And really, this should just be part of the cost of them doing business. "Is this customary?" I wondered, and I dusted off my old list of links from summer 2009 when I first went shopping rates.
Well, well, well... turns out that things can change in a year! In 2009, San Mateo Credit Union was hands-down the best lender for my type of loan (conforming mortgage on a condo, 20% down). Both their fees and their rate were lower than anyone else, across the multiple weeks that I monitored things. Now, though, Provident Credit Union had come roaring back. Provident is another regional credit union, although they cover the entire Bay Area and not just the Peninsula. Their fees were now just a little larger than SMCU's, where before they were about $5000 more expensive. And, their rates were .15% less... not huge, but enough to make a difference. I did some quick calculations, and realized that Provident's rates would more than make up for their higher fees in the first year.
I dug a little more. Both Provident and SMCU use the same back-end service for loan application/pre-approval, but Provident doesn't charge a bogus $250 deposit. Score! I happily took my business elsewhere. The process was a breeze, and unlike my initial SMCU experience, they completed the whole thing online and furnished me with an initial pre-approval letter in my browser. Success!
The good times didn't end there, though. I was soon contacted by a loan officer from Provident who asked me to send him my proof of income and assets. I complied - I already had my letter, but would need to do all that stuff if I went ahead with the loan anyways, so why not get it over with? He was great, keeping in touch via email, and went ahead and told me the maximum I qualified for, without me even asking. He even sent me an Excel spreadsheet, personalized for my type of loan, where I could play with different figures to see what my monthly payments would be. That's the sort of thing you can find online, but still, it was a great convenience, a nifty use of technology combined with a personal touch. He also went out of his way to tell me that he could re-generate a loan approval letter for me when I'm ready to make an offer (to avoid tipping my hand in negotiations).
As you can probably tell, I'm now a fan of Provident. I went ahead and became a member, and, assuming that their rates stay at about the same spot relative to their competitors, will most likely take my final mortgage from them. The whole thing is kind of funny - because San Mateo Credit Union tried to get $250 out of me, they'll end up missing out on hundreds of thousands of dollars in interest that they could have collected out of the life of my loan. I suppose a business person could draw some sort of conclusion from that.
It's been a while, hasn't it? I apologize. For a long time, nothing much was happening on the condo front. Then, too much was happening. I'll try and work through the backlog here, in roughly chronological order, to the best of my recollection.
First topic: financing!
I previously described getting pre-approved for a mortgage. You can get pre-approved from any lender at all; you aren't obligated to get a loan from them, and in fact, many people will get pre-approved from a traditional bank or broker that gives them great service, and then get their final loan from a cheaper source. However, I wanted to go ahead and get pre-approved from the lender I was most likely to close with, so I shopped rates for two weeks, and ended up with San Mateo Credit Union.
Because this is the first time I had gotten pre-approved, I assumed that my experiences were typical. In particular, I was surprised that, contrary to my expectations, they asked for a deposit and would only pre-approve me for a specific amount, one I had to guess myself. Well, it turns out that that isn't the way everyone operates!
A pre-approval is only good for a certain time, in my case 2-3 months. After that, you should renew it. In my case, though, I really didn't want to. Every time you renew a pre-approval, the lender pulls your credit again, which causes your credit score to drop a little more, which makes it harder for you to get a loan. Yeah, I know, crazy, right? As a result, I let my pre-approval lapse a few times, only renewing it when I thought there was a good chance that I would be making an offer soon.
Most recently, that was in early May. I had decided to slightly change the range of properties I was looking at, which required a bump up in my pre-approval limit. I felt comfortable going above it; I had chosen the original amount more or less at random, based on my comfort level at the time and expecting that my lender would automatically adjust it up or down to the "real" limit. Since then, I had just been refreshing the same amount, but now I wanted to hit a specific target; my finances have improved since my first round, and I felt comfortable with a bigger figure.
Since it had been so long since my original submission, the folks at the credit union asked me to start my application over again. Which was fine; because I was asking for more, I wanted to be sure that they saw my most recent paycheck, bank statements, etc. I got to the end of the application, and came to an ugly realization - they were asking me for a $250 deposit, but unlike the last time, this was non-refundable. If I went ahead with a loan, they would apply it to my closing costs, but otherwise, they would just keep it.
Needless to say, I was peeved. This was a pre-approval! I understand that they incur a cost to pull my credit, but even so, if they're going to charge me for it they should just charge for the pull. And really, this should just be part of the cost of them doing business. "Is this customary?" I wondered, and I dusted off my old list of links from summer 2009 when I first went shopping rates.
Well, well, well... turns out that things can change in a year! In 2009, San Mateo Credit Union was hands-down the best lender for my type of loan (conforming mortgage on a condo, 20% down). Both their fees and their rate were lower than anyone else, across the multiple weeks that I monitored things. Now, though, Provident Credit Union had come roaring back. Provident is another regional credit union, although they cover the entire Bay Area and not just the Peninsula. Their fees were now just a little larger than SMCU's, where before they were about $5000 more expensive. And, their rates were .15% less... not huge, but enough to make a difference. I did some quick calculations, and realized that Provident's rates would more than make up for their higher fees in the first year.
I dug a little more. Both Provident and SMCU use the same back-end service for loan application/pre-approval, but Provident doesn't charge a bogus $250 deposit. Score! I happily took my business elsewhere. The process was a breeze, and unlike my initial SMCU experience, they completed the whole thing online and furnished me with an initial pre-approval letter in my browser. Success!
The good times didn't end there, though. I was soon contacted by a loan officer from Provident who asked me to send him my proof of income and assets. I complied - I already had my letter, but would need to do all that stuff if I went ahead with the loan anyways, so why not get it over with? He was great, keeping in touch via email, and went ahead and told me the maximum I qualified for, without me even asking. He even sent me an Excel spreadsheet, personalized for my type of loan, where I could play with different figures to see what my monthly payments would be. That's the sort of thing you can find online, but still, it was a great convenience, a nifty use of technology combined with a personal touch. He also went out of his way to tell me that he could re-generate a loan approval letter for me when I'm ready to make an offer (to avoid tipping my hand in negotiations).
As you can probably tell, I'm now a fan of Provident. I went ahead and became a member, and, assuming that their rates stay at about the same spot relative to their competitors, will most likely take my final mortgage from them. The whole thing is kind of funny - because San Mateo Credit Union tried to get $250 out of me, they'll end up missing out on hundreds of thousands of dollars in interest that they could have collected out of the life of my loan. I suppose a business person could draw some sort of conclusion from that.
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