As a plugged-in and ever on the luxury ball sleepiguy notes, 3570 Washington is back on the market after a five month (yes, month) hold. Purchased for a reported $5,225,000 in April, asking $5,600,000 today (roughly 7% more than was paid).
Floor plans and additional photos via the previous listing brochure. Watch your fingers, the ink might still be wet.
UPDATE (10/1): The current listing’s virtual tour is now live.
∙ Listing: 3570 Washington (6/3.5) – $5,600,000 [presidioheightsviewhome.com] [MLS]
∙ Kirk Hammett’s Pacific Heights Monster Is Back (2505 Divisadero) [SocketSite]
The MLS listing has a VT listed, but it’s not active yet: presidioheightsviewhome.com, or see name link.
[Editor’s Note: Until it’s active and we’re not sending readers to a dead-end, “no link for you!” (hence our link to the active previous listing brochure).]
I’m not sure I understand the pricing strategy here.
Hmmm… the delta between the purchase price and the current asking is suspiciously very close to the commission and transaction costs to sell this place ($375K).
I guess that is step #1 in the pricing game for a short hold : try to recover with net zero effect.
^^^ You’re joking right? Pricing strategy = last sale price + commission.
The real strategy is a 3 phase one:
Phase 1: Collect Underpants
Phase 2: ?
Phase 3: Profit
They are just testing out the rise in the case-Shiller index over the last 5 months with a real life example 😉
[Editor’s Note: Unfortunately the Case-Shiller based index for the Bay Area “luxury” market has demonstrated a very different trend.]
Wonder what the backstory is behind this particular transaction. Clearly rich enough to buy the place but not rich enough to lose the transaction costs when it didn’t pan out.
eddy, your southpark references are classic!
It’s ridiculous that some RE person would get $375k commission on this. When did we go collectively mad as to allow such a system?
Come to think of it, $375k is rather a lot of money for doing essentially nothing but opening the door.
lolcat_94123, cheers to that comment. Who would pay so much for a college dropout? Oh yeah, you and I. We’re idiots.
All things considered, this home seems one of the better values in PH right now. It has view, its big, right side of street, etc. This makes Nina’s 2775 Green home look like it is overpriced by $1M+ as well as several other homes. I suspect this will sell above it’s previous sale price.
I poked around on various sites and couldn’t find the square footage. Anybody know?
It does seem to have 6 bedrooms and separate dining and family areas, so it must be a larger than average house.
UPDATE: The current listing’s virtual tour is now live (see above).
Do Realtors get a 6% commission when the sales price is this high? I would think not.
Realtors?
===
the level of churn in the RE market is impressive IMO. the same properties seem to come up again and again and again.
it would seem that there are SF buy-and-holders whose properties rarely come up, and then a lot of short-termers (for whatever reason)
“Do Realtors get a 6% commission when the sales price is this high?”
I was thinking of a lower commission (4.5-5%) combined with other sales costs like staging, repainting, inspections, extermination, bargaining room, etc. made up for the rest of the $375K.
This is just conjecture as I’m not a RE agent.
While I agree that the commission earned is whacked and probably the listing agent is the same as the agent who sold it to them…….and consequently getting another fat check, I want to present the likely outcome of a commission check on this sale so those who have never bought or sold a property knows exactly how it is broken down.
1. It is rare to offer more than 5% on a sale which would put the commission at $280K
2. This would be split with listing agent and buyer’s agent………$140K
3. Then there is a split with the agent and their company………$70K +
Still,………not bad if sold quickly and without advertising costs.
0.75% Transfer tax too.
Nothing is for more than 5% total. You could probably get it done for less. But, agents don’t split 50/50 with their company. Top agents keep 90% of the take.
It does look like they painted over the turquoise wall in the breakfast nook to make it less hideous, so they should get some consideration for that.
Unless that is, you know, virtual paint.
I’m so sick of everyone bashing how much real estate agents make. It is one of the only fields where you have to negotiate your pay before service is provided. You don’t go into a top company and ask how much their employees make and try to negotiate it down do you??
There is no respect for Realtors any more everyone just wants to hate on the money that they make. Most agents work damn hard for their money and I think they deserve every penny of it!
Barbabra, it’s OK. I don’t like how investment bankers are paid either. I personally just like to rail against compensation systems that both have perverse incentives and result in little actual economic value.
So yes, I have little respect for Realty as it is currently practiced. If you produced something of value, then you would gain more respect.
Most real estate agents “work damn hard for their money” in the same sense that, as Tyra Banks says, fashion models work “damn hard for their money”, which is to say, they don’t “work damn hard” for any reasonable definition of “damn hard”.
The entire reason most agents are in the business is because it’s fairly easy money for the amount of work involved, especially in an overheated market like San Francisco. The absolute amount of money earned goes up with the price of the house, a curve which rises a lot faster than the curve representing the amount of work the agent must do to sell a given home.
If I had the money I’d love to exec produce a reality show where the host takes a random real estate agent, and trains them for a really difficult occupation, and has them actually do the job, so that they can recalibrate their idea of what hard work actually is.
“It is one of the only fields [RE agent] where you have to negotiate your pay before service is provided.”
What ? Millions of independent contractors would beg to differ on that statement.
When I had done contract work I spent days and days reviewing the client’s requirements, designing the system’s architecture, and writing a detailed statement of work before even getting a chance of being paid.
That work had to be repeated for every new project since each was different. I wish that process was as easy as in real estate where boilerplate contracts can be generated in minutes.
this may be an appropriate time to ask. if i’m considering the sale of a home, what would be the disadvantage of this plan?
– not listing with an agent
– paying the examiner and chronicle directly to run open house ads. hosting the open houses myself.
– printing my own flyers and sending them to all local real estate offices before their weekly meetings to encourage agents to bring clients.
– offering ~2.5% commission to a buyers agent.
– possibly putting on craigslist.
i’m looking for reasons besides “it won’t be on the MLS and therefore won’t attract as wide an audience”.
thanks. i don’t hate agents and i don’t ever want to determine what is “too much” for someone else to make. i do believe that the value any agent can provide to a smart buyer or seller is far below what they charge. unfortunately the oligopoly hasn’t been broken.
resp,
lots of buyers, and not just agents, come to the Tuesday tour so you’ll want to be available for that. You will also need to deal with the buyers agent feeling they need to do all of the paper work, and their brokerage wanting a bigger cut (“We are working both ends”). Low ball offers; if you look like you won’t pay for a sellers agent (and staging) you will be percieved as desperate.
A good Realtor is worth his weight in gold. If you own a $5M or any big asset, you want a talented individual to handle its sale or you could easily lose more than 5 or 6% commission. Make a mistake and you could even get sued for much more.
I am obviously a Realtor and I am first to admit that there are many in the profession who are dumb as stumps. The barrier to entry is low. And like many things, from the outside looking in, it appears that real estate is easy money. I guarantee you it’s not. The top producers work, work, work to protect their clients from many pitfalls.
I sit at open houses and simply “open the door” for people like Tall Guy all of the time. It’s easy to sense when people don’t see a Realtor’s value and I do not pursue them as clients. When you are interviewing a Realtor, the good ones are interviewing you. As a result, people like Tall Guy end up with the dumb-as-stump folks. It’s a self-fulfilling and deserving match.
PUAgent — will you explain what sort of mistakes that could get a homeowner sued that you prevent? I would be very interested to know what sort of risks you protect your clients from.
Corntrollio – There are two major tasks. One is to help you with your disclosures to the buyer. You need to make sure that all material facts about the property are known up front. Buyers don’t like surprises. That’s why disclosure packages can be 200+ pages. And second, it’s to make sure that you and the buyer are performing per your contract. It’s essential that your Realtor understand the contract thoroughly. Many do not.
I only met, and used, only two good agents in my whole, long life. Both were knowledgeable not just about disclosures and understanding contracts but knowing all the ins and outs of financials. Most realtors I have been subjected to haven’t a clue about the money side. And spare me the excuse about the hard work of having to wait around at open houss and glad hand folks. I agree with many … the majority of realtors that I have met do not understand the term “hard work”
PUAgent, what sort of risks have you specifically protected sellers from? As I understand, these are some of the disclosures required in CA, correct?:
http://www.dre.ca.gov/pdf_docs/re6.pdf
What other sorts of disclosures do you have expertise in?
On a side note, do you generally ensure that all obligations, representations, and warranties in the real estate contract survive closing?
Corntrollio- Yes, the Transfer Disclosure Documents (TDS) etc… are major aspects and they are critical. Any material fact regarding a property must be disclosed. That means you must describe anything that a buyer could think impacts your home’s value.
In SF there are plenty of things that can impact a property’s value like rent control, The Ellis Act, Proposition H, unwarranted rooms, unwarranted rental units, BMR’s, TIC’s, building code restrictions, energy certification, underground tanks, water certifications etc…
It’s impossible to know every building code and every detail of SF’s rent control for example, but an agent better know that these and other issues exist. He doesn’t need to be an expert, but he should at least have a rudimentary understanding of these laws, codes etc… Most importantly, he should have a list of experts to help with the details.
I’d love to be more thorough here, but I’m exhausted from the two hours I spent last Sunday glad-handing folks at my open house, so I’m off to the beach house to count my money. Enjoy the sun.
Ok, why don’t we just add the following bullet point to resp’s hypothetical plan:
– hire a real estate attorney to review and revise the contract so that your ass is covered and you’re getting as much value as you can out of it. (Pay an hourly billing rate for this service rather than a percentage of the transferred asset.***)
With this addition, what is the disadvantage of this plan over hiring an agent and paying an extra $100k or so?
*** BTW, if these agents are really working so hard, why not charge an hourly rate or at least make it an option. You could even charge $500/hour (as much as a senior associate or junior partner at a large law firm — you know, where there’s actually a significant barrier to entry) and I bet it would still come out cheaper for the client most of the time.
I sit at open houses and simply “open the door” for people like Tall Guy all of the time. It’s easy to sense when people don’t see a Realtor’s value and I do not pursue them as clients.
why are you pursuing anyone as a client during an open house? the seller is paying you for one and only one task.
in this case, if this house sells at list, the agent will have earned the commission. in general, real estate agents are tremendously overpaid (especially the ones just scraping by) and I can’t wait for the internet to finally break up the agent oligopoly.
I really think what separates a good Realtor from a so-so one, as with any big ticket item salesperson, is their ability to listen. I have had many encounters with Realtors busy telling me what to do and not listening to me to understand my needs and assist me. It’s like: Hey, I’m the expert here. If you’re too dumb to take my advice why should I waste my time giving it to you?
I think what I’m getting at is what Shza said. Some of what PUAgent is describing seems like stuff an attorney could do for loads less money. On the fancy houses featured on Socketsite, I’d imagine attorney’s fees would be a mere fraction of brokerage costs.
I’m not quite clear on why a realtor would be better at filling out these forms, and PUAgent hasn’t quite described what expertise he brings to the table (assuming “he” since that’s what PUAgent keeps using). After all, these are all basically standard forms — it’s not like realtors are creating these from scratch.
Furthermore, I’m not quite clear on how a percentage of the transaction is appropriate as the transaction fee, since it’s not clear to me that these paperwork costs necessarily go up because a house costs more (hell, if anything, a lower priced “fixer” house may have higher paperwork costs than a fully remodeled one because there are more disclosures to make).
Btw, as I’ve mentioned before, all lawyers in California are eligible to take the broker licensing exam, and after passing it, they can join the local real estate association and get all the forms that realtors use, and more importantly access to true MLS — the holy grail! I’m not sure why more folks don’t do this to save 2.5-3% and also to use MLS (including getting access to all those top-secret realtor-only notes).
I would sleep better having a real estate attorney look over everything. An agent is nice to have if you want to save gas going to open houses.
bornnraised, even at $5/gallon, that’d be a hell of a lot of gas for 3% of the price of 3570 Washington, no?
thanks. i agree about the attorney. hope to see someone try this strategy before i do to see how it goes down. can’t believe i haven’t seen anyone in SF try it. this seems like a fairly sophisticated r.e. market and state law is pretty thorough in protecting buyers with disclosures.
btw, those dislosures are pretty bogus. it’s amazing how many of my questions at open homes are met with “I’m not sure”. How much did the owners pay for it? Did they get a permit for the bathroom? What’s the square footage. Did someone die here? Does the fireplace work?
i’m not gonna pay an agent 3% to tell me whether to check off YES, NO or DON’T KNOW.
FSBO can be beneficial to the seller if done well. The issue most sellers make is to try to get a premium price and avoid commish. It’s smarter to price your home either at market, or slightly below market, 1-2%. This can be enough to draw out the buyers and maybe even get some competitive bidding. If you list with an agent, demand a high price and make them work for it. And ask for comish discounts for extended DOM or reduced listing price.
resp — that’s exactly what I mean. The basic advice most agents would give is to say “don’t know” or “no representations” or the equivalent, whenever possible. That’s not real advice, and that doesn’t make them worth 3%/6% either.
“i’m looking for reasons besides “it won’t be on the MLS and therefore won’t attract as wide an audience”.
You can add any home to the local MLS for a flat-fee of $395 through this company: http://www.owners.com/For-Sale-By-Owner/Sell-House.aspx
There are three reasons to hire an agent:
1) Have somebody to sue if the shit hits the fan – so make sure they are insured.
2) Tap into their expertise and offload the process/paperwork nightmare – so make sure they know the business inside and out, are respectful, and don’t have a personality that will turn off others and they know when to talk and when to listen.
3) Have them negotiate EFFECTIVELY on your behalf. Ask for REFERENCES and examples of how they’ve saved money for their client and review their past closings. If you are a buyer and they present you a track record of houses they’ve sold for at or close to asking, ditch them. If you are hiring somebody to sell your house, and their track record shows lots of price drops, or low sale prices, ditch them too.
Most agents can only do 1 out of the 3. Find one that can do all 3 and knows the market, then you will be happy to have paid for their services. Unfortunately, the state sets a very low bar for licensing, and its a profession full of self-absorbed individuals who let a little money go to their heads, so it’s no wonder people have lost respect for the profession.
Sold Price: $4,800,000
Original Price: $5,600,000 -14% change
Yikes… a 500k loss at least…
I never heard the real story behind this one… I wonder what happened?
What a great apple. Nearly exactly a 1 year hold and the price is down 425K/5225K= 8%, right in range with price drops across the city, though this home is of course,anything but average.
Seller wasn’t too desperate with a 6 month hold, tho that’s short for this price range.
What’s amazing is that many of the D7 homes going into contract appear to be the result of a more reasonable seller than a set of higher paying buyers. Great news to have proof that prices have come down even in the last year.
The bad news is that the seller lost 425K, plus 300K in realtor fees and transfer taxes, and another 50K in property taxes. A mortgage would have been at least another 300K. So this cost this unlucky soul about one hundred thousand dollars per month. Wow!
I’m hoping they had a wonderful time living there.