With 15 years experience in the San Francisco real estate market, Pota Perimenis of Keynote Properties has seen her share of booms and busts. The “Brain” caught up with Pota recently to get her thoughts on the current state of San Francisco real estate and to tap her knowledge on the do’s and don’ts when buying/selling property in the often complicated San Francisco market. Pota was both forthcoming and thorough in sharing her insight. Thanks for chatting!
What are the key factors a homebuyer should consider when choosing an agent?
In today's market, finding and purchasing a home can be a very involved and complicated process. It is essential to find a Realtor who is qualified and dedicated to providing you with the best representation. Look for an experienced, full-time professional who knows the market in the area you are interested in. Determine if they know the available inventory in your location and price range. Ask for -and check- references. Your Realtor should have the time and energy to devote to you and your search for a home. Perhaps most importantly, choose an agent with whom you have a personal rapport. Buying a home is an intimate type of business transaction. Trying to go through the process with someone you can't relate to will not work. Find a qualified agent who you enjoy working with, one who matches your personality and meets your individual needs. This will make the home purchase experience much more enjoyable.
Here are some questions I am often asked by buyers:
1. I read the newspapers ads, search the Internet, and go to open houses on my own. Why should I work with an agent?
- Because an agent can systematically screen all the currently available properties for you. This saves you time by narrowing your search to the relatively few that meet your criteria.
2. Should I (the buyer) have as many real estate agents as possible working for me?
- No. Your interests are best served by entering into a working relationship with one agent and entrusting that person with the information needed to find the best property for you. As you look at buildings together, you and your agent will then develop a more detailed understanding of your preferences. Your agent can then examine new listings with a sharper picture of what you are looking for in a property. Every real estate agent has access to the same information through the multiple listing service, magazines, and newspaper ads.
3. What is my obligation, if any, to my agent?
- Simply, to make all offers to purchase through him or her.
4. When I visit open houses (without my agent) and the agent who is there tries to sell me the house, what should I do?
- First, tell the open house agent that you are already working with an agent. If you are interested in making an offer on the house, contact your agent immediately and have him/her pursue the matter. You have the right to use your agent to write up the offer.
5. How much does having a buyer's agent cost?
- Nothing. Sellers pay the real estate commission. If an agent from another company finds a buyer, the listing office splits the commission with the selling company. The great thing about this for the buyer is that you can have someone working for you at no charge.
What are the biggest mistakes you see buyers make?
The biggest mistake buyers can make is not doing their homework before purchasing, including not:
- Getting pre-approved for a loan and having a real world understanding of how much house they can truly afford.
- Working with their own realtor who can provide expertise in all aspects of the house purchase.
- Understanding the current market.
- Reviewing all comparable sales for the property they select.
- Researching any and all aspects of the property that may affect its intended use such as: the permit history, rental history, occupancy history, eviction history, land use, planning, zoning and any other use restrictions, to name a few.
- Having professionals thoroughly inspect the physical condition of the property.
- Carefully reviewing all disclosures.
- Reviewing the title history.
- Getting all agreements in writing.
What are the biggest mistakes you see sellers make?
As with buyers, inadequate preparation and not understanding of the current market can mean not getting the most money for their property, in the least amount of time with the fewest inconveniences. Examples of common mistakes include:
- Choosing the wrong agent. For example:
- Hiring an agent based on non-business factors, such as an inexperienced relative or friend.
- Hiring an agent based on the quantity of past sales rather than the quality of those transactions. Consider: How close to the asking price did the properties sell for? How many times did the prices of the properties need to be reduced before they sold? How many listings did the agent have that didn’t sell? Is that agent sacrificing quality of service in the interest of obtaining as many listings as possible?
- Hiring the agent who charges the lowest commission. Many times you get what you pay for.
- Hiring the agent who comes up with the highest estimated sales price. Although this price may indeed be accurate, sometimes agents try “buy a listing” by predicting an unrealistically high sales price. Look at the comparable sales and personally check out the currently available properties to get a realistic sense of the current market value of your property.
- Hiring an agent without checking references. Ask for, and check, references. Find out how the agent’s clients felt about their buying or selling experience.
- The best agent is the one who will do the most effective job of marketing the property, negotiating the most favorable terms and conditions, and communicating with the seller to make the process as smooth as possible.
- Overpricing: A home priced too high, relative to the market, takes longer to sell if it sells at all.
Maximum attention is focused on a property for sale during the first two weeks of a listing. During this time the greatest number of qualified buyers and agents will view a property. It is therefore extremely important to price a property correctly at the beginning of the marketing process. Properly pricing a property depends on knowing current market conditions, and knowing what is happening with comparable properties in the neighborhood.
As the price of a home rises, the number of potential buyers becomes smaller. A home priced high gets fewer showings. Buyers purchase by comparison, and a property priced above the competition does not “compare” favorably. Inviting a buyer to make an offer could indicate that a fair price has not been established.
It is very difficult to obtain a reasonable offer on an overpriced property. The buyer feels he should be just as unreasonable in his offer as the seller is in his asking price.
By contrast, offers are much easier to obtain on a reasonably priced property. You can then choose which offer to accept with no obligation to one that does not meet your requirements.
It can cost the seller: Convenience, Time, Opportunities, and Money. Owners don’t set the sales price, agents don’t set the sales price….Buyers determine the market price of property.
Inadequate preparation: Buyers are likely to determine their interest in a property within the first few minutes. Properties that look their best sell faster and bring the highest price. The seller’s role is to make his/her home look as attractive as possible. Be as critical with your home as if you were the buyer.
Here are some suggestions to make a great first impression:
- Create curb appeal
- Trim landscaping and clean front property.
- Replace old doormat. Be sure lighting and doorbell are in good working order.
- The front entry is a great place for a potted plant or colorful annuals.
- Check exterior paint; touch up or power wash.
- The roof, gutters, and downspouts should be in good condition.
- Repair any fences, gates, or broken windows.
- Clean or paint walls.
- Clean carpets.
- Eliminate clutter to give your home a more spacious look.
- Clean your house thoroughly.
- Professionally wash windows inside and out.
- Arrange furniture to enhance space.
- Pack away collectibles, jewelry, money, prescription medications and other small valuables.
- Remove all personal photos and diplomas.
- Clean fireplace hearth.
- Leave one or two healthy plants, and a few large vases.
- Clear everything from kitchen counters.
- Caulk and regrout if needed.
- Fix leaky faucets and sticking doors and windows.
- Replace burned out bulbs. Replace bulbs with maximum wattage.
- Clean out closets to reveal maximum closet space. Hang clothes neatly.
- Clean and organize basement and garage.
- Stage the property, if appropriate.
DON'T OVER IMPROVE! While you should repair minor things like broken doorknobs, use caution in planning major mprovements.
Non-disclosure: Withholding information from potential buyers that could affect the value or desirability of the property can result in future legal disputes. Disclose, disclose, disclose.
Buying/selling a home is one of the most stressful decisions a person can make. Share with us what you do as an agent to help your clients through this process?
To help my clients through the process I will:
- Act as their full time professional; be a market expert.
- Listen to their requirements; help them clarify their priorities.
- Educate them about current market conditions
- Communicate with them regularly and often, return all phone calls, and keep all appointments.
- Provide extensive, in–depth knowledge of San Francisco real estate values, inventory, market conditions and trends.
- Tell them the truth, no matter how difficult.
- Give them a competitive advantage when negotiating their offer.
- Offer them the benefits of my established relationships with property inspectors, tax specialists, financial planners, bankers, title officers, insurance brokers, trades people, 1031 exchange specialists, attorneys, and referrals for realtors outside San Francisco.
- Review property disclosures with them.
- Coordinate escrow agents, financing, inspections.
- Guide them efficiently through the entire real estate transaction.
- Act as their full time real estate professional.
- Check and double-check every detail in the transaction.
- Provide exclusive professional services that are ethical and confidential.
- Represent their best interests. Give them a competitive advantage.
Specifically for buyers I will:
- Help them find an appropriate lender and financing package.
- Review comparable sales information for the home they select.
- Provide experienced counsel for writing a competitive offer
- Conduct a daily search for appropriate properties
Specifically for sellers I will:
- Analyze past sales and properly price their property.
- Help them prepare the home physically, including staging if needed.
- Make sure the necessary disclosures and legal paperwork are completed.
- Formulate and implement a smart marketing plan using state-of-the-art technology, including: professional photography, full-color brochures, magazine color ads, referral network, direct mail, internet exposure, virtual tours and the multiple listing service in the marketing plan.
- Assure maximum exposure to attract ready, willing and able buyers.
- Negotiate offers that are received, leaving no money on the table.
- Qualify all purchasers to the best of my ability.
- Review all terms and conditions of offers to purchase.
- Discuss options, strategies and procedures for: offers, contingencies, inspections, escrow, city ordinances, disclosures, and “possession”.
- Coordinate compliance with terms of purchase contract and with city and state ordinances and requirements.
- Monitor status of buyer’s loan to avoid closing delays.
- Keep them informed as to the progress of your transaction from the time of signing until the close of your sale.
- Work hard to handle any situation that may arise with lenders, escrow agents, appraisers, underwriters, insurance agents, inspectors, purchasers, and other agents during the entire escrow period.
- Go with them to the signing of your closing documents.
- Continue my exclusive service through close of escrow until all matters are settled.
- Ensure that they receive their check and settlement documents promptly after.
Any general advice to offer regarding financing?
I have found that lenders can be willing to lend more than a borrower can comfortably afford. An honest assessment of your personal budget—income and expenses—can help you determine how much you can outlay for a mortgage each month. If possible, have some savings reserves for rainy days with which to pay the mortgage. I suggest:
- Find a good lender or mortgage broker
- Get pre-approved
- Assess your personal financial situation and make sure you can afford the loan
- Compare rates
- Determine which type of loan is best. Fixed rate, adjustable, interest only, negative amortization, etc. If your interest rate is adjustable, ask about its adjustment frequency, maximum annual adjustment, highest rate, index, and margin.
- Ask about the discount points and origination fees.
- Ask about all the costs--appraisal, credit report, lender’s title policy, document preparation fees, any other fees that the lender might charge, etc.
- Ask about rate locks- are they available and if so, what do they cost? How long are they good for?
- Ask about any prepayment penalties.
- Ask how much time is needed to fund.
What are the common misconceptions people have regarding real estate agents?
One misconception is some people feel that real estate agents set property prices. Owners don’t set the sales price, Agents don’t set the sales price…Buyers determine the market price of property. Another misconception is that all realtors take the same exam and are therefore the same. As with any profession, there are differences amongst Realtors regarding skill, knowledge, competence, experience, ethics, and quality of service. This is why it is most important to find a Realtor who has a high standard of ethics, is competent and knowledgeable, who cares about his/her clients, and who bases his/her business on establishing quality, dependable, long-term relationships with clients.
San Francisco is notable for its unique neighborhoods. Is there a specific neighborhood in which you know particularly well or specialize?
Yes. I have several areas that I work in:
- Two-unit buildings, including experience with tenancies in common/condominium conversions.
- North Panhandle properties.
- Condominiums, single family homes, and multi unit buildings in the following areas: Pacific Heights, Lower Pacific Heights, Lake District, Jordan Park, Cow Hollow, Marina, Russian/Nob/Telegraph Hill, North Beach, Downtown, Civic Center, Hayes Valley, Lone Mountain, SOMA, South Beach, Inner Mission, Duboce Triangle, Noe/Cole Valley, Bernal Heights, Sunset, Richmond.
What's your opinion on the San Francisco real estate market for 2007?
I see it as a typical year in SF real estate. Maybe some blips where the inventory sits for a while and doesn’t get overbid, but overall a strong demand for well positioned properties that are priced right.
Why should someone choose to use a real estate agent over doing it themselves (i.e. "For Sale by Owner")?
Why does a person NEED an excellent real estate agent? Why do you need a good stockbroker, doctor, dentist, teacher, or lawyer? Because your financial well being and intellectual and physical well being depend on the QUALITY of your support team. In my personal experience as a Realtor for over 15 years, I can site example after example where the sellers have benefited by having me on their team due to my marketing, preparation advice, real estate knowledge, expertise, diligence, ethics or negotiating skills. Considering the small upside cost and the large downside risk, it doesn’t make sense to NOT hire a Realtor.
TIC ownership is increasingly more common. What are the mistakes to avoid for people considering TIC?
It’s important to make sure the TIC agreement contains ALL the terms and conditions of the arrangement. Here are a few suggestions:
- Work with a qualified attorney.
- Read the document prepared by the attorney thoroughly (items can be omitted or not written as the owners intended).
- Account for how the property can be used and by whom—don’t forget garden, storage, garage, and attic spaces.
- Decide the pet policy and the noise policy.
- Decide the policy for adding improvements by the group and by individuals.
- Decide the policy for managing the TIC group and the physical building itself (who’s going to be the treasurer? Who is going to sweep the hallways? Change the common area light bulbs? etc)
- If there is to be a conversion, decide what happens during and after the conversion process (e.g. how will the property tax percentages be appropriated to each individual unit, how will the proceeds be divided from the sale, how will the conversion costs be divided up, to name a few).
- Understand the resale reality of a TIC. While lenders are trying to make TICs more attractive with individual financing, these may not continue to exist in the future thus affecting an owner’s ability to resell their interest in the building.
What do you like most about being a San Francisco real estate agent?
If I could write my ideal job description it would be: “helping to improve the lives of people in a tangible way by using a variety of personal skills and resources”. This is exactly what I do as a Realtor and I love my work. I help my clients fulfill their dreams, express their lifestyles, and obtain financial benefits by successfully buying and selling San Francisco residential and investment property. To do this I use my intelligence, creativity, problem solving/analytical skills, passion, experience and superior customer service.
You can reach Pota Perimenis at:
(415) 407-2595
pota@sfcityhomes.com [1]
www.sfcityhomes.com
[2]
Note: The above material is the personal opinion of Pota Perimenis and is for informational purposes only and does not constitute a recommendation or endorsement with respect to any company or product. Pota Perimenis makes no representations and specifically disclaim all warranties, express, implied or statutory, regarding the accuracy, timeliness, or completeness of the content. You should seek the advice of a professional regarding your particular situation.