CFAH

330 Banks

On the market without finding a buyer at $649,000 last fall, 330 Banks is back on the market (but not the MLS) with a list price of $599,000.

Included in the sale are approved plans to add an additional “art studio” and half-bath on first floor. And while it’s usually “showings by appointment only,” it will be open this Sunday (1/27) for just one half-hour (from 2:00 to 2:30) if you want to take a peek.

330 Banks: Approved Plan

Keep in mind that this single-family Bernal Heights home was purchased two and one-half years ago for $700,000 (on 6/8/2005). And yes, the sale at $700,000 was likely used as a local comp a couple of years ago. And so on. And so forth.

Comments from Plugged-In Readers

  1. Posted by Tipster

    If the SF market was as “stable” as all the Realtors say it is, there wouldn’t be all these “not on the MLS” listings.
    I think the emperor has no clothes.
    And if people are going to start suing over misinformation by their realtor, this sort of thing should give the lawyers plenty of ammunition going forward.

  2. Posted by Satchel

    According to Propertyshark, the 2 loans on this prop total $601K (looks like the second mortgage of $57.5K is either a hard money lender or perhaps the HELOC Bank of Mom & Dad). So, maybe $100K+ of real $$ down payment and closing costs has already been fed into the evaporator, with more to come when the realtor commission gets factored in.
    This house sold in 2002 for less than $400K, and in 1999 for less than $250K. Both the previous owners refi’d and took out some cash. I guess we’ve now found the bagholder. Can’t see any reason why a house like this can’t fall to below $400K again, even though Bernal has gotten better and so probably does justify a somewhat higher valuation than in 2000.

  3. Posted by movingback

    Tipster, I think it’s more or less the value of the land we are talking about here, and the fact that there are approved plans in place to build a new dwelling. Look at the tear-downs that are selling in Noe Valley for $1 Million, more or less.
    I don’t see the point of your comment. I think they are trying to attract a contractor for this one – I still think the price might be bit too high even given the location.

  4. Posted by jeemster

    “Tipster, I think it’s more or less the value of the land we are talking about here, and the fact that there are approved plans in place to build a new dwelling.”
    That art studio is not a new “legal dwelling” The permit did not increase the # of legal dwelling units. Barsink (which shouldve been max. 3′-0″ wide per planning) is not a kitchen and the new bathroom is not a full bath.
    Since when can a garage open directly into a sleeping room?

  5. Posted by missionite

    Don’t worry, I’m sure a Google millionaire will snap it up, oh wait… GOOG is down 7.35%, wait, make that 7.86% today. Well maybe somebody flush with APPL cash..uh, crap down 16.34%, no that’s 16.86% at the moment.
    I predict that realtor types who like to post on these blogs will be getting increasingly quiet over the next couple months.
    Perhaps, somebody should go through the past five months and start collecting all the Realtor/bull posts about the state of the market, the state of Bernal, etc. It would provide some useful context I think.

  6. Posted by arlo

    What is the rationale for not listing in the MLS? If you are the seller, wouldn’t you want the most exposure possible? Doesn’t the MLS give you this?

  7. Posted by Trip

    missionite, I don’t think the point of view from the realty industry will remain silent — and I hope not as I actually learn a lot from them, Fluj in particular. However, I can predict what we will hear from many (not Fluj, I don’t think), as I am already seeing this on realtor sites: (1) interest rates are low so now is the time to buy, (2) prices have fallen so now is the time to buy, (3) with the stock market falling, now is the time to buy real estate, (4) the low volumes mean there is lot of pent up demand so better buy now before prices start going back up, (5) and the standbys (not making any more land, prices only go up in the long run, etc.).
    I really don’t understand it. The one and only thing that will get this industry moving again is getting to the significant price reductions we are now heading toward so volume picks back up.

  8. Posted by missionite

    You nailed it Trip.

  9. Posted by tipster

    “I don’t see the point of your comment.”
    Let me make my point explicit. If the real estate market were healthy in SF, the realtors won’t be spending as much time trying to cover up the inventory numbers. They wouldn’t need to. Instead, there is a huge push by the brokerages to give the appearance of a low inventory number so that the buyers won’t realize that the market has changed.
    So the brokerages appear to be exerting pressure on the agents to keep listings off of the MLS. If inventory were truly low, they wouldn’t need to do that.
    Other metropolitan areas have lots of brokerages, so any one brokerages has no real incentive to hold listings off of the MLS. In SF, there are a handful of brokers, so it is in their best interest to keep listings off of the MLS, allowing them on only as fast as sales occur. If the two dominant brokerages can keep up what I think they have been doing for awhile now, the buyers won’t get aggressive on their prices.
    To answer arlo’s question, the rationale is what I listed above. If the brokerages listed every home that was for sale right now, the prices of all homes would drop. And the two dominant brokerages tell the sellers that they can communicate to most of the buyers without the MLS anyway: it’s such a small community that there are other ways around the MLS.
    Get this through your head: The MLS is a marketing tool that exists only to serve the interests of the realtors. It is NOT a public service. If the Realtors’ interests are served by misleading the buyers, then that’s how they are going to use it. Plain and simple.
    I obviously can’t get in the heads of the brokerages, but I see no other reason for holding listings off of the MLS.
    Got it, movingback? I wasn’t addressing whether this home would sell or not, I was addressing the fact that, like a lot of homes, it appears to be for sale, but off the MLS. The only reason I can think of for doing that is because the Realtors , having lost control of the information OUT of the MLS are using their control of the information that flows INTO the MLS as a tool to mislead the buyers into believing that inventory is lower than it is, causing them to bid their prices higher than is warranted, thereby generating higher prices and commissions and keeping the sellers, whom the Realtors work for, happy.
    That serves their interests and therefore is an appropriate use of THEIR system.

  10. Posted by Satchel

    Trip,
    “I really don’t understand it. The one and only thing that will get this industry moving again is getting to the significant price reductions we are now heading toward so volume picks back up.”
    Of course you are right. But real estate is an emotional asset, and the banks and the Fed know this. As an asset class, it is going to fall roughly 30% – that’s baked into the cake. If it falls very quickly (like in 6 months, say), an ENORMOUS number of people will simply walk away, leaving the banking system with more than $2T in losses. It’s better if it only falls 3-5% per year, after the intial tumbles. At that rate, many people will simply continue to live in their homes (or hold their depreciating investment assets), lowering the losses to banks. The Fed will seek to help this along (with the help of the Treasury) by lowering rates where possible and providing bailouts to those deemed most likely to walk anyway (those who put no money down, or have very little “equity”). The emotionality associated with the asset class will assist the bankers, just as it has in Japan. Losses will still be severe – I am guessing on the order of $1T when it is all said and done – but much of this will be postponed and passed to the taxpayer wherever possible. Japan is the playbook.
    Bottom line, real estate is going to be a turd, and it will be flushed. (It already is getting flushed in most parts of the country now.) The merde baguette will be ingested. The only question remains WHO will ingest it. If TPTB have their way, it will be the homemoaners feasting on it, and it will be a long, drawn out repast, courtesy of your Federal Reserve system and its bank shareholders.

  11. Posted by Trip

    Satchel, I think you are spot on. What flummoxes me is why the real estate industry plays along when the prolonged downturn the bankers are pushing is contrary to realtors’ interests. That particular group, which will be starved by the resulting lack of turnover, should want the inevitable correction to come quickly to get sales moving again (heck, they’re the ones who will be selling the foreclosed properties as well that the finance industries are trying stanch).

  12. Posted by arlo

    tipster: I think your points are valid – particularly the one that the MLS does not exist as a public service. I can understand a desire to manage the inventory numbers – from the top down. But, if I were an individual seller, I would be demanding that my listing be in the MLS and hoping that other listings would get left off. I wonder if any of the Realtors can comment on how this actually works?

  13. Posted by arlo

    TPTB feeding merde baguettes to the homemoaners – great stuff Satchel! Trip – great point too about why aren’t Realtors pushing for big fast price corrections. Let prices re-set and then get back to buying and selling. Why are they fighting this?

  14. Posted by Satchel

    Trip,
    “What flummoxes me is why the real estate industry plays along when the prolonged downturn the bankers are pushing is contrary to realtors’ interests.”
    The real estate groups are salespeople. (No offense to any of the realtors here.) Gladhanders. They like to hear happy talk, and they like to deliver happy talk to their clients. Hard economic analysis has little role to play. The other day on one of the threads here, there was a discussion of “historic” GRM multiples. One of the realtors rattled off the CURRENT numbers and labeled them “historical”. No one even thought to wonder what the ratios were, say, in 1994-97; or – heavens forbid!! – 1974-77!
    Now, I know I will get lots of flames here, and maybe it’s changed a bit, but the barriers to entry for brokers was EXTRAORDINARILY low for brokers. In CA, for instance, all the multiple choice questions for the test were published in advance (Minnie Lush, “California Real Estate Exam Guide”, pub. May 1, 2005). You literally did not even have to read the exam questions on the test – or work out any of the questions mathematically.
    I’m sure the smart real estate brokers out there are counseling their clients that they need to adjust their selling expectations. Those are the agents who will eat in the coming downturn. In SF – from what I can tell out here in District 4 – houses are still selling at high prices but it is very hit and miss, with many listings being withdrawn (perhaps as high as 30-40% now). So, the realtors are not hungry enough, is all I can figure.

  15. Posted by movingback

    Tipster – thanks for the update, but I still disagree with you, and think you are more or less just venting some anger rather than stating any real facts.
    Satchel, on the other hand, has some good points and I tend to agree with him on many of them.
    To each his own, I suppose.

  16. Posted by ex SF-er

    There is 2 other reasons I can think of off hand for houses not to be listed on the MLS
    1) (the benign reason): for affluent homes, many affluent sellers don’t want to advertise that their home is on sale. Thus, some of the multimillion dollar homes may not get listed. This even happens in cities that list everything on the MLS.
    2) (the not benign reason): to keep the sale “in house”. SF is dominated by a few agencies. If the house is listed on MLS and it sells to a buyer from another agency, then the commission is split. However, if the sale can occur in the same agency (and even better if there is only one Realtor) then the commission is not split.
    Some homes will go on the market, with the selling agent hoping to sell the house IN-OFFICE. if the sale fails, then they list on the MLS.
    This is of course a huge conflict of interest, because it is in the agents interest to make an in-house sale and get the full commission as opposed to making a sale with a higher offer and sharing the commission.
    This is why I wish we had one central non-Realtor database for all transactions.
    A seller would post their homes. All bids would be verified through the system, so that there would be no “ghost” bidding wars and the system would be more transparent.
    A RE agent would be paid not on commission only, but more per-hour with maybe a bonus/commission on top.
    this would eliminate the many inherent conflict of interests.

  17. Posted by ex SF-er

    “There is 2 other reasons”
    wow. I are smart.
    🙂
    All your houses are belong to us.

  18. Posted by ex SF-er

    oh, a 3rd reason:
    it costs money to list on the MLS.
    not much… but it does cost something.

  19. Posted by "Dave"

    However, if the sale can occur in the same agency (and even better if there is only one Realtor) then the commission is not split.
    That’s only true if one single agent at the brokerage finds both buyer and seller. If two agents under the same firm are in the picture, commissions are divided up just like with an outside firm.
    I think it’s really #1 only. If you can sell the thing without a bunch of yahoos rummaging through your underwear drawer at an open house, then why not avoid the whole mess.
    In any case, it’s up to the seller, not the agent so let’s not get too crazy around here with the tinfoil hat theories (e.g. the “let’s all collude and clamp down inventory” theory). If that conspiracy theory held any water, why wouldn’t they be doing it in Detroit or Stockton, where # of listings is skyrocketing???

  20. Posted by arlo

    Dave – I agree that seller should decide (or at least concur with) the listing strategy – and I find it hard to fathom that any seller that asked for MLS exposure would not get it from his/her agent. But, for what it’s worth, check out the Patrick.net blog where they claim MLS listing suppression in Stockton.

  21. Posted by bgelldawg

    An open house for only 30 minutes?
    Do they want to sell this place or not?
    Do they think they can generate some kind of frenzy by stuffing the place with as many interested buyers as possible?
    I would not be happy if my agent did something like this.

  22. Posted by anon

    This place was for rent on craigslist for two weeks at $2,600, now it’s listed at $2,400
    If we get it we are gonna have a rental warming party, there will be martinelli apple cider flowing

  23. Begelldawg: that was my perplexity as well. I can see the reasons for not listing on the MLS (thanks to ya’ll!) but not for making it as difficult as possible to sell this place. Another question: did anyone visit the address link? The house is a 1 bedroom. Doesn’t 700k seem like a lot, even in 2005? I mean, it’s not like those approved plans for extra rooms come with free construction…

  24. Posted by Mike

    “not on the MLS” listings. Posted by: Tipster at January 23, 2008 7:10 AM
    My guess is that the negotiated commission rate is 4% or less. Assuming a selling price of $600,000 at 4%, the commission is $24,000. So by keeping the listing off MSL and using a 6 commission rate the seller is saving $12,000 ($36k-24k = 12k).
    I had always assumed that the fee is split 4 ways. At a 6% standard fee or $36,000; $9,000 each goes to the listing broker, the listing agent, the selling broker, and the selling agent. Of course the rate is negotiable.

    “Tipster, I think it’s more or less the value of the land we are talking about here, and the fact that there are approved plans in place to build a new dwelling. Look at the tear-downs that are selling in Noe Valley for $1 Million, more or less.” Posted by: movingback at January 23, 2008 8:46 AM
    I believe that this is a very ugly house & should be demolish and rebuilt. However if this home is in sound condition, it is my understanding that the SF Planning Dept will not permit this property to be demolished (‘soundness report’??). I am not a builder and don’t know for sure. What do others think?

  25. Posted by Mike

    “Tipster, I think it’s more or less the value of the land we are talking about here, and the fact that there are approved plans in place to build a new dwelling.” Posted by: jeemster at January 23, 2008 9:37 AM
    Jeemster, you indicated “that there are approved plans in place to build a new dwelling.” Is this information available via internet? Where? Thanks.

  26. Posted by Katy Dinner

    This is hysterical banter.
    1) Seller’s company is paying the commission
    2) Not a teardown – in excellent condition. Disclosure packages are available. The plans are for an additional bedroom in the HUGE garage. Properties in dense SF are often expanded up or down.
    3) This was on MLS. MLS is not paid by each property but part of a yearly fee – any serious real estate agent is a realtor (r), therefore part of MLS. No savings to not post on MLS.
    A very good reason why properties are not in MLS is that the seller might be trying to refinance.
    Another good reason is to test the market.
    4) 1/2 hour open house due to excessive calls for showings – no open house was planned. This is the best I could do in-between other appointments that day.
    I hope this has cleared up your confusion. You make me smile.

  27. Posted by jeemster

    To Mike: OMG worst cut and paste EVER.
    I was quoting “movingback” at January 23, 2008 8:46 AM. Please follow the thread. (In order)
    Even after I quoted Movingback I said (with capitals for emphasis), “That art studio is NOT a new “legal dwelling” The permit DID NOT increase the # of legal dwelling units. Barsink (which shouldve been max. 3′-0″ wide per planning) is not a kitchen and the new bathroom is not a full bath.

  28. Posted by chuck

    Katy, if the property is not listed on MLS, does the buyer’s agent get his/her 3%? What about on this property?

  29. Posted by Katy Dinner

    There is a 2.5% CSO for the buyers agent.
    The plans for the space in the garage are approved.

  30. Posted by [movingback]

    Thanks Katy for setting everybody straight – it’s about time.

  31. Posted by anon

    This was on the MLS, but now it’s not. Sounds much more likely to be an effort to distort the listings statistics.

  32. Posted by [movingback]

    I doubt it – see above response from the listing agent.

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