Home Buying in San Francisco>Question Details

Angela Wooda…, Home Buyer in San Francisco, CA

Another question about San Fran foreclosures (Sunset / Parkside area or others nearby but not too close to really bad areas)

Asked by Angela Woodard, San Francisco, CA Tue Jan 7, 2014

I'm doing prelim research on purchasing an inexpensive property and doing an extensive remodel in the Sunset, Parkside, West Portal or other nearby area (desire a single family home either connected or detached, but not a flat / condo)...

It appears that properties selling in the low millions in San Fran are remodels (or not even remodeled recently) but done with mediocre quality by developers/ flippers who are looking to maximize profit by putting "lipstick on a pig" so to speak. Most properties in the area are old and would require repairs anyways ... so I'm wondering just how much worse is a foreclosure property (in terms of the extent of repair) than one that is not in foreclosure?

Given that I expect to be putting in $250 - $300 sqft in renovation / repair of a property anyways (we'd live in our current home while this work is being completed), trying to determine if a foreclosure would be right for us.

Also, is financing avail, or are foreclosures paid in cash? Thx!!

Help the community by answering this question:


I can help you with financing if you need but it is extremely hard to buy a foreclosure. You will have to have a experienced real estate agent.

Alex Greer
Loan Officer
NMLS #1056079

1 vote Thank Flag Link Wed Jan 8, 2014
Well you are going to need to be pre-approved before you start shopping. Let me know if you want to get started
Flag Thu Jan 9, 2014
Thank you for your response! Will keep you in mind should we find a place and need financing. Cheers!
Flag Wed Jan 8, 2014

Foreclosures are far and few between in San Francisco and they sell in a competitive market and generally as-is. Therefore they must be evaluated on a property by property basis, just like any other property.

Feel free to contact me to find out more about foreclosure purchases and how they are sold. Once you know that information, you will be in a position to intelligently assess whether foreclosures are right for you in general. That is before even finding any foreclosure opportunities.

1 vote Thank Flag Link Wed Jan 8, 2014
Thank you for your response! I appreciate your offer to explain foreclosure purchases further. I'd assumed there weren't many in the market and hadn't even considered them, however over a handful recently appeared on the west side of SF in a recent search either on Trulia or Realtor.com... I may reach out soon. Cheers!
Flag Wed Jan 8, 2014
First off, your plans to buy in San Francisco are commendable, especially if you're in a position to finance that purchase via conventional means, e.g., 20% down payment, with 80% financing, or a combination of any other financing package.

You've listed a couple of options you're considering, a foreclosure and an "inexpensive property" that may require "extensive remodel" in the Sunset/Parkside (or West Portal, etc). All things being equal, San Francisco and "inexpensive" go together like water and oil, pun intended, and the type of purchases you're considering have built in issues that may not lend themselves to the best of financing options by their very definition.

Typically a house needing extensive remodeling connotes a "fixer", unless you're buying a run-of-the-mill "row house" of a certain era in these areas, e.g., 1930's vintage. Such a house will meet a lender's standard underwriting guidelines, unless it is a true "fixer" (a house needing repairs because of poor maintenance or economic obsolescence). However, consider the other given in this scenario -- the competition.

The reason for prices being high (definitely not inexpensive when you're evaluating a price upwards of $800,000), is that there is a pent up demand for houses in most parts of The City. As such, you will be in competition for the best case scenarios in either "types" of houses being considered, and, the better the floor layout, or appeal of the design of the house you're scoped out, the more you may expect to have to pay (in a competitive bidding war -- a probable result in either foreclosure or house needing upgrades). I can tell you about one such house, 144 Sadowa St., San Francisco, that when the dust settled on the numerous offers that were fielded, the price went from $199,000 all the way to $434,000! (to illustrate this buying frenzy).

For all that you intend on doing, be prepared to pay more than you thought -- to buy and to fix, and for the privilege (financing is pricier if the property is a fixer).

Good luck.

J. Mario Preza
1 vote Thank Flag Link Tue Jan 7, 2014
Thanks for your response! Yes, agreed - it's a tough market for buyers. We've tried a lot except for getting into a bidding war over homes, and that's why I'm exploring other avenues (e.g., fixing something and going through the expected hassle of project management of the overall remodel, city permitting processes, etc. Cheers!
Flag Wed Jan 8, 2014
Dear Angela,
Foreclosures are becoming a rarity in the Sunset/ Parkside. Home prices have gone up so high that it is impossible to find a foreclosed one in The area. I specialize in the Sunset and would be happy to be of help to you.
My questions to you are? How big of a house, what areas of the Sunset? How much are you willing to spend to buy the house? Have you done some extensive remodeling as the building department in San Francisco has many requirements. I have several clients in the area that have done extensive remodeling. You are welcome to come visit their projects.

Houda Tanverakul
Top Producer
Coldwell Banker
2633 Ocean Ave
San Francisco, Ca 94132
1 vote Thank Flag Link Tue Jan 7, 2014
If you're buying at a foreclosure auction then it's cash only, and purchases are made with only a visual inspection from outside.

If you are buying a bank-owned property (meaning no one bid over the amount owed on the property and the title went to the lender) then it is usually eligible for a conventional loan (at least) and the buyer can hire an inspector to evaluate the property prior to purchase. The bank will not make any repairs, but might allow for deductions from the purchase price for substantial, needed repairs that come up during inspection.

A lot of foreclosed homes were flipped between 2005-2007, and wouldn't really be much different from more recently flipped homes or any other home. The bigger problem would be lack of upkeep from time of default to foreclosure, but that's usually more cosmetic than not. In some cases you could get intentional acts of vandalism or removal of appliances, fixtures, cabinets, etc. by angry defaulters. If the property has been empty for a while there can also be squatters.

If I were you, I'd look more into probate sales or just regular fixers. With all the get-rich quick flippers, you need to be fast, but there are properties that simply haven't been updated in a while that do come on to market.
0 votes Thank Flag Link Wed Jan 15, 2014
Good insights to the question and potential issues faced by someone that will learn along the way. You've made some keen observations, however, the seeing a property from the outside only, is factually accurate if you're at those auctions where the bank is unloading foreclosed properties. That's not to say that you can't get in at all, it just may take a little extra work to actually do it. As for "flippers" these are folks just like you and me, the difference is that their business model is set to factor in costs to purchase, fix, hold, and sell, and ultimately, when they offer to buy, with this insight, they bid as much as their budget/plan will allow, and thus the reason for the tough competition. Lastly, probates are a good alternative, but, like the foreclosures, there are some caveats and you need to work side-by-side with someone who knows what they're doing, ideally, to avoid some serious and costly mistakes. Experience is worth a bundle, but most people don't pay for it,
Flag Wed Jan 15, 2014
I should be clear that I am not an expert, and this is based on personal experience and research combined.
Flag Wed Jan 15, 2014
Hi Angela,

I'm a Realtor in Sacramento but I recently referred a SF client of mine to a local real estate agent in SF. She did a fantastic job and helped my clients find and then buy a house 2 weeks ago in SF. They submitted several offers on other houses and every time the house sold for way more than list price. The housing market is red hot in SF! If you like, I can forward her contact information to you. She specializes in SF and is very successful.

A tip: when submitting an offer on a house, I recommend my clients write a letter to the seller about why you want to buy the house. I also have them include a brief description about themselves so the sellers know a bit about them. This helps draw some emotion to the sale. Otherwise you're just a name on an offer :) Hope that helps!



REALTOR® - lic #01923240
Certified Public Accountant (CPA) - lic #103885
Hammer Real Estate Group
(916) 945-9243

0 votes Thank Flag Link Tue Jan 14, 2014
Sounds like a reasonable plan. Buying a foreclosure is no different than buying a regular sale if you purchase from an agent, If you want to buy a home at auction on the courthouse steps you will need to pay cash and there are a lot of other details involved. I recently wrote a blog about foreclosures here on Trulia. I'll put a link to it in the web reference below. That should answer a lot of your questions.

J.R. Thrasher
0 votes Thank Flag Link Wed Jan 8, 2014
Hey Angela,

Just because the property is a foreclosure doesn't mean that it's in horrible condition. There are foreclosed properties that need a great deal of work, while others need only cosmetic repairs. The same goes for properties that are categorized as regular sales.

I've seen regular sale properties that need much more work than a foreclosed one. For example, mold, foundation issues, water damage, termites of all sorts.

A foreclosure just means that the homeowners rights to a property are forfeited because of failure to pay the mortgage.

If you're looking for a property under a million, I have a single family attached in the Richmond district of San Francisco on 35th by Geary. Great great neighborhood. Other properties in the area which have been remodeled are selling for around 1.3 to 1.5 mil. It's a private sale - good property that needs updating. Call me if you're interested!!!

Hope this helps.

Wishing you all the best,

0 votes Thank Flag Link Tue Jan 7, 2014
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