Home Buying in 94110>Question Details

Pat, Home Buyer in San Francisco, CA

We're considering purchasing a SFH on Potrero Hill that has seen better days.

Asked by Pat, San Francisco, CA Thu Feb 26, 2009

Although it seems to be structurally sound ( it's not falling down!) we've found that it needs a new roof, knob electrical, new flooring ( but the owner covered it w/carpet, apparently 1 bathroom was severely damaged and made into a closet(?), oldr kitchen, newly painted.We feel as if some more damage is there, but we're just not certain. I know inspections will help but will they find all possible damage? If so, what kind of offer might be appropriate given this economic climate? Thanks!

Help the community by answering this question:


Hi Pat,

I am thinking that with the "cover-up", staging, and launch onto the market with an agent, that the seller is seeking top dollar. Whatever damages are in the home that this person knows about, he/she must disclose them. If not, they can be sued for non-disclosure and it is pretty serious business.

Since you are still interested in moving forward on this home, it will require some careful planning with your agent. You'll want to get an offer in before anyone else and see what the seller's reaction is. That will be your only way of knowing how your previous relationship with him/her is being perceived. It's very possible that they move forward with you, or, they could ignore your offer and see what the open market brings them. Either way you should have a plan!

I'd begin talking to agents as soon as you can and find one who you are comfortable with so you can start strategizing. You are correct that this is an atypical situation and you have some leverage with them based upon your knowledge of the property.

Any talk about reasonable fees is best taken off-line. You are welcome to contact me anytime and I certainly wish you well with it!

Web Reference: http://www.binningsteam.com
1 vote Thank Flag Link Fri Mar 20, 2009
Good Luck on your selection. I am just goig to focus on the HGTV part. The fact that this home has had all the work documented (I assume the HGTV comment was to say the staging was for a televised program) protects to some degree the seller from accusations of hiding damage. How hidden could the damage be when the before and after including the work was televised.

Most staging and the work they perofm is cosmetic (as is when it is done at every other residential resale). A good series of inspections and vigorous negotions are warranted.
Web Reference: http://bob2sell.com
1 vote Thank Flag Link Fri Mar 20, 2009
Hi Pat,

If the seller is encouraging you to NOT have professional representation that protects your best interests, that is a major red flag. Imagine if someone sued you then said hey, let's all save some money and leave out the attorneys! Would you play ball, or say "no thanks, I'd rather have my attorney represent me."

It sounds like you're a sweet, good-intentioned person who takes the "mutual friend" thing to heart. I can certainly understand. But when it comes to investing in a piece of property with your hard-earned dollars, you really need all the protection you can get. If I were you I'd tell them that you need some professional representation because you've never been in this situation before and you don't expect to gain an education in this over night (and like Michael said, a potentially costly one!). Tell them that you're flummoxed, that you're apprehensive, and that you don't feel comfortable moving forward without a real estate professional by your side. If they have the slightest shred of empathy that you clearly have for them, they will see your point, give in, and you can have your representation. If not, they simply care about their own interests and you have exposed their true motivations. Either way they react, you've discovered a lot, no?

It also sounds like value is your main concern, particularly since the home needs work. As an ex-appraiser, my clients find my expertise in this department invaluable. You are absolutely correct that valuation is a big challenge in this rapidly-changing marketplace. Sellers are chasing a moving target. Price is everything right now. I just wrote and article on my blog about how current conditions benefit buyers such as yourself - you may want to check it out here:


If you need advice and someone that will get into a very detailed analysis on whether or not purchasing this home is a good idea, please call or email me and we can discuss. My final thought is this: have representation no matter who it is! I wouldn't proceed without it. Wishing you all the best...

Web Reference: http://www.binningsteam.com
1 vote Thank Flag Link Fri Feb 27, 2009

the easy solution is to hire an agetnt to work for you. You agree to pay the agent what ever you negotiate with the agent. The agent does as much as you need them to do and you pay them. The seller doesn't need to pay anything and doesn't need to part of your decision to have an agent or an attorney or anyother kind of advice.
You, as the buyer are bringing the money to the table and if you want to pay for representation do it. Most importantly you need to be sure you are not being snookered by the seller. A seller might want to avoid agents to avoid disclosure. Fortunately for the buyer is California they have a legal responsibility to disclose.

Put it this way, if you feel the other side is getting hinkey get out. You don't need to give this guy your money and get his headache.

What offer is appropriate? If we give you that we have established an agency relationship. Implied or assumed agency carries as much liability. If we said offer X you did and got the property, then found out you'd been snookered our brokerage would be on the hook.

Make any offer you want. But ask yourself first, who is the seller trying to save the brokerage fee for, you or himself?
1 vote Thank Flag Link Thu Feb 26, 2009
Jed Lane, Real Estate Pro in San Francisco, CA
Hi Pat,

If you think it’s awkward now, just imagine how awkward it may become if you try to renegotiate your price & terms after the results come in from your inspections or worse if there is some surprise that is discovered after escrow closes that was inadvertently not disclosed.

Working with a Realtor helps to keep the emotional aspect away from the negotiating table, especially important when there is this type of personal relationship with the seller. Not only do we make appropriate inspection recommendations but we ensure that each party is shielded from liability through proper disclosures.

If you decide to go it alone, make sure to also get a tank inspection (I’m assuming this is a pre-1950’s property). Tanks are incredibly expensive to remove as I’ve learned first hand (prior to being licensed).

I completely understand your friend’s goal of saving on commission costs (which are negotiable). As Michael has pointed out, there is a lot of risk in handling a purchase without the skills and insight of a Realtor. The ideal is that each side has their own representation. Your Realtor will also give guidance as to market value of this property.

You could make the suggestion to the seller that making a property purchase is a very expensive & complicated endeavor and that you’d feel more comfortable with the process having your own representation.

Good luck!
Web Reference: http://www.cbower.com
1 vote Thank Flag Link Thu Feb 26, 2009
I see said the blind man...

Well - having purchased my first investment property in the same manner... Sellers and buyers think they 'get a better deal', but more often is the case of caveat emptor. Pretty much all I can say on this one is that the tuition at the University of Hard Knocks oftentimes runs higher than any commission an agent would charge. I've found these kinds of transactions typically wind up costing everyone more in the end.

Naturally Buyers and Sellers would expect agents to say that, to which my answer is simple; anyone can enroll in the many continuing education courses of the University of Hard Knocks, they have an effective sliding scale fee. The more at stake - the more you pay.

If you want a cheaper education, give me a call offline and I'll see if I can point you in the right direction.
1 vote Thank Flag Link Thu Feb 26, 2009
Apologies as the HGTV comment was not a serious comment.... it was just a joke. It's just that most consumers these days are avid watchers of HGTV and believe that "staging" is the ticket to ride to a high price ... along with fresh paint and carpeting over damaged older flooring. So then is this considered cosmetic? I would think so ....

By way of one other example however, if there is serious water damage as a consequence of a pipe rupturing in an upstairs bathroom ... and then someone rips it out and quite literally covers up the now vacant space with walls, patched floor and lower floor ceiling, as well as fresh paint ... is that considered cosmetic?

This is where the negotiations enter the picture would be my guess ...

thanks for you comments!
0 votes Thank Flag Link Fri Mar 20, 2009

The seller has now decided to put this on the market - in Potero Hill - with an agent - after we refused to agree to his terms of a deposit of a non-refundable $50,000. We had understood that was not a standard practice in a realtor to realtor contract. So everything that people have said thus far rang true!

Rumors have it that he has done a cover job ( covering up the water/floor/ceiling skylight/etc.etc. damage and is, of course, staging the property ( courtesy of HGTV!)

Now that he has an agent, my thoughts are that this could be good in terms of having an ethical ( not to mention possibly legal ) viable negotiation, as we plan to secure an agent ( within the next week) to represent us as possible buyers.

My concern is, of course, in this unusual situation, how will our earlier experience with the seller influence our possible purchase. We know what was the condition of the place a month or so ago and now there is a cosmetic overlay masking the real more structural issues ( which I know will be expensive ) as we had a contractor inspect it.

Also, what would be a reasonable fee ( percentage) for a realtor in such a situation - when the house is already selected and the function of the realtor would be a sole focus on this sale.

Thanks again for all of your excellent opinions and advice.

0 votes Thank Flag Link Fri Mar 20, 2009

It seems we all agree that represntation is best. To answer your question directly about what to offer. Just remember that all sales happen when a buyer is willing to buy at a price the buyer is willing to pay. Till then all you have in intention and talk.

So now understand that your question is more about market knowledge, which you feel you lack. You need to spend time gaining the market knowledge or buy it from an expert. Are you going to do the repair work yourself over time? Are you going to hire a contractor? Do you require a profit or income from the project to support the time you put into it? All of this and more will help you put a number on exactly what the property is worth to you. After you reach that number and make your offer, the only thing left is sell the seller on accepting it, making sure that everything that is supposed to happen in escrow happens on time to keep the contract in place (hopefully the seller doesn't get a higher offer and you miss a deadline) and then you can have a succesful transfer of ownership.
Let's analyze the situation. You feel that you will get a better price if you don't have represntation because the sller doesn't want to have agents involved. You believe that the seller is going to accept a lower price from you. Do you really think that if you have an agent or not the price accepted is going to be lower? The only thing the seller doesn't want to do is pay an agent out of his proceeds. Am I right? Then simple solution, you pay your agent yourself.
A very simple misconception is at play here. Who pays the brokerage fees? The typical answer is "seller pays". Reality is that the money brought to the table is the buyers money. It is the buyers money that 's used to to pay off the seller loans and the brokerage fees.
The psycholgy of a seller that doesn't want to pay fees is based on selling at "market price" and saving the fees. I've never encountered a seller that is willing to discount "market price" to save the buyer the cost of the fees that would be paid from the sellers proceeds. Also know that the seller knows the market price of the property. They have benefit of watching the market on that properties comparables for as long as they've owned it. Of course they sometimes have an inflated idea of the value.
0 votes Thank Flag Link Sat Feb 28, 2009
Jed Lane, Real Estate Pro in San Francisco, CA
Clearly, the seller wants to sell this property, regardless of whether an agent is involved. It is in your best interests to have an agent represent you so that they can share their experience in a transaction as important as this. Based on the circumstances, it should not be difficult to negotiate the use of an agent. I have represent many buyers in the same situation.

It is important for you to identify an agent that has the necessary market knowledge, construction related experience, vision and negotiating abilities to get you the best deal possible. Trust that you will end up getting the lowest price in the long term by working with an agent.

Shaban Shakoori
TRI Coldwell Banker, SF's #1 Office
0 votes Thank Flag Link Fri Feb 27, 2009
Please understand.... it's not that we do not want to bring a realtor in. We think it prudent to do so. The "awkwardness" enters the picture in relation to the owner of the property. The owner is not a friend - we know him through a mutual friend.

We see the wisdom of bringing a level of expertise and, perhaps a mediator (!), especially as it appears that the owner is attempting to cover up earlier damage - water damage, leaks, etc. He put on a coat of new paint and new carpet ... and covered the damaged areas.

But given all of this, we still would like to know how "not quite fixers" are valued in this uncertain market when everything seems to be in a state of flux -

Thanks again,
0 votes Thank Flag Link Thu Feb 26, 2009
Exactly .... which is why we are suspect.... to use naother hoily - penny wise/dollar foolish. However, we don't even know how to bring a realtor in this situation. Obviously, its a bit of different relationship as this is a one time situation. And, of course, the RE commission of 6% is something that the seller wants to avoid. We're a bit flumoxed.

Thanks for your advice -!
0 votes Thank Flag Link Thu Feb 26, 2009
No, we are not currently working with an agent .... which is exactly why I posed the question online.

The situation is that we were approached by a friend of the owner. The owner says he would prefer to sell it off market - to save the RE commission - thereby everyone supposedly getting a better deal....
0 votes Thank Flag Link Thu Feb 26, 2009
Dear Pat,

Your agent should create a comparative market analysis for comparable homes in the area. Then he/she can help you figure out an offer price.

Have a reputable general contractor make a contractort's inspection and a different pest/termite inspector give you a pest inspection. That way you will have two sets of eyes trying to find all the problems and potential problems. The contractor should go on the roof to inspect it. If needed, you can get a separate roof inspection. You need to get permission to poke holes in the stucco. Then you will have about as much information as you can without tearing out the walls to find hidden problems.

Good luck,

0 votes Thank Flag Link Thu Feb 26, 2009

It sounds like you're already working with an agent - so I must ask - why are you putting a question like this on Trulia Voices, when you really should be directing this question towards your agent? They are your real estate advisor and should be providing you with these answers.

If you find you cannot work with your agent, please let them know that and find another. I'd be happy to offer my assistance, however you are in a situation in which agents are bound by the National Association of Realtor's Code of Ethics not to interfere.

Just my opinion,

Mike Ackerman
Zephyr Real Estate
0 votes Thank Flag Link Thu Feb 26, 2009
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