425 1st Street #4702 Living

The re-sale of 425 1st Street #4702 closed escrow yesterday with a reported contract price $1,350,000 ($1,031 per square foot) for the One Rincon Hill two-bedroom which was purchased from the sales office for $1,605,500 ($1,226 per square) in August 2008.

As we wrote when #4702 hit the market asking $1,107 per square foot in December:

At the beginning of September the sale of 425 1st Street #4602 closed escrow with a recorded contract price of $1,343,500 ($1,026 per square foot) while at the end of September 425 1st Street #4502 (which had last been listed at $1,450,000 as the sales office’s “LAST 02”) sold for $1,297,000 ($991 per square foot).

And in October, the re-sale of 425 1st Street #4902 (which had also been listed as the “Last Brand New 02 Unit”) closed escrow with a recorded contract price of $1,370,000 ($1,047 per square), for an average recent per square foot sale price of $1,021 for the three 02’s in the high forties.

Of course it wasn’t until the last day of December that San Francisco secured the next America’s Cup (at which point “Front Row Seats to America’s Cup!” was added to the listing). And while we’re filing this under apples-to-apples, it’s possible the unit ended up reselling with a few extras (“Seller will entertain selling home fully furnished”).

Comments from Plugged-In Readers

  1. Posted by Paul Hwang

    In some ways this unit is superior to 4902. There are very nice custom upgrades to the unit, and the furniture is all custom and high quality.

  2. Posted by Paul Hwang

    Oh yeah, the buyer did mention to me that he was planning to enjoy the America’s Cup from the unit.

  3. Posted by Brahma (incensed renter)

    Paul, if you’re going to kiss and tell, why don’t you tell us what the custom upgrades to the unit were, and whether or not they were present when the unit was purchased from the sales office in 2008?

  4. Posted by sfrenegade

    Paul’s implication by saying #4702 is superior is that the ’02 stack for the higher floors of ORH has fallen in price since the October re-sale of #4902, despite the America’s Cup. #4902 also has the strange distinction of being part of a fraudulent scheme before the most recent sale (as was #4802) as detailed in prior threads.
    It seems like a nice progression in price, however, if you assume that #4702 is equivalent to #4902 and #4602 other than floor number. $1.35M was the predicted price in the prior thread (see link) for obvious reasons. Does this mean #4802 will sell for $1039/sqft or $1.36M?

  5. Posted by unwarrantedinlaw

    There was a glut of apartments for sale at 1000 and 1050 North Point which has now disappeared.
    There’s nothing wrong with saying a property with a north bay view is a front row seat for the America’s Cup. That event will go on in some form for years, and it’s a reminder of the value of a view.

  6. Posted by SFSal

    “In some ways this unit is superior to 4902”
    And 4702 sold for less than 4902 after SF secured the AC? Not much of an “effect”.
    “it’s a reminder of the value of a view”
    A value that’s 16% less than in 2008.

  7. Posted by Paul Hwang

    SFSal,
    I only represented the buyer of 4702.
    I did not represent the buyer of 4902.
    It’s the buyer’s agents fiduciary duty to help the buyer to acquire a property most suitable for his needs, whether those needs are finanicial or otherwise.

  8. Posted by Paul Hwang

    Brahma: Take alook at the pcitures and you’ll see a lot of custom work! The sellers told me that they spent $250K on furniture, upgrades, custom work.
    sfrenagade: Your assumption that the units 4702, 4902 and 4602 are equivalent is inaccurate. They are dissimilar beyond floor.

  9. Posted by sfrenegade

    Paul, read my post again. I said IF you assume they are equivalent, the price falls in a nice progression. Do you deny that? I noticed that you had no comment as to the implication of your statement either. Your agenda is to tell us you got your clients a nice deal, as it often is, and we get that; however, the overall price was still as we predicted here.

  10. Posted by Paul Hwang

    sfrenegade,
    Unfortunately discretion and duty demand that I neither confirm nor deny the terms of the transaction.
    Yes, I believe you have made valid statements.
    Paul

  11. Posted by The Milkshake of Despair

    “It’s the buyer’s agents fiduciary duty to help the buyer to acquire a property most suitable for his needs, whether those needs are finanicial or otherwise.” (emphasis mine)
    Huh ? I thought that fiduciary duty was limited to finance. No doubt that agents are expected to address their clients non-financial desires (location, floorplan, style, etc.) as well but that shouldn’t be conflated with fiduciary duty.

  12. Posted by sfrenegade

    It would be great if real estate agents had a higher level of duty to their clients than currently exists, considering the substantial fees earned. Unfortunately, real estate have a rather insubstantial duty to clients, legally speaking, and the way commissions are based doesn’t incentive or facilitate such a duty. Dual agency is another big issue.

  13. Posted by Paul Hwang

    sfrenegade,
    much of what you say is true about the inherent conflict of interest. how do we fix it?
    Paul

  14. Posted by The Milkshake of Despair

    ^^^ easy. Switch from a commission model to contractor (time+materials or fixed bid) model. That won’t eliminate conflict of interest though will reduce it.

  15. Posted by The Milkshake of Despair

    um, make that the solution is simple but making it happen isn’t easy at all.

  16. Posted by Paul Hwang

    Do you mean have the buyers pay instead of the seller?
    How are you going to keep track of time?

  17. Posted by embarcadero

    “It’s the buyer’s agents fiduciary duty to help the buyer to acquire a property most suitable for his needs, whether those needs are finanicial or otherwise.”
    Ha!
    You don’t even see the conflict of interest in your own sentence, do you? If you insist on being empirical evidence for the stereotype about real estate agents, I guess there’s nothing anyone can do to help you.

  18. Posted by Paul Hwang

    embarcadero,
    There are more important things in life than money.
    Paul

  19. Posted by The Milkshake of Despair

    “How are you going to keep track of time?”
    The same way any other independent contractor does. This is not rocket science. Also there are fixed bid engagement models as well that don’t require tracking time.
    “There are more important things in life than money.”
    True though this phrase is often spoken by someone who benefits by another parting with their money.

  20. Posted by R

    Not arguing any of the points here.. but MOD, if you have a job, you benefit “by another parting with their money”. It’s kind of the way the world works, not just for RE agents.

  21. Posted by The Milkshake of Despair

    R – Hmmmm… let me rephrase that then. I’ve only heard that aphorism when someone wanted me to part with my money for a dubious or questionable return or when a promising investment went sour.

  22. Posted by embarcadero

    Paul Hwang,
    I understand that there are some things more important than money. Personal reputation, for instance. Why you would choose to throw yours in the trash with posts that demonstrate your inability to comprehend basic ethics, let alone the meaning of “fiduciary duty” is, frankly, beyond me.
    It’s your reputation, and you can trash it if you want to…

  23. Posted by Paul Hwang

    Thank you for you concern embarcadero.
    I really don’t understand why you dislike me so much. I have always acted in my clients best interest, if there are problems I always try to fix them.
    It’s very curious to me why you are so angry all the time. I don’t rip off my buyer clients, I help them find the solution to their needs as best as I can.
    Not everyone is buying property as an investment, in fact if you actually spoke to me and said, “I’m buying this as an investment and all I want to do is make money.” I would tell you and show you more compelling choices than a condo in san francisco.
    People want to buy condos in San Francisco and get good advice, they call me. They want to sell for a good price, they call me. I answer the phone and tell them what I think.
    Fiduciary is not always relating to money.
    Paul

  24. Posted by Paul Hwang

    Milkshake,
    Some of my clients look for years, are you suggesting that the model should be charging an hourly rate to the buyer during this time like an attorney does? Even though I think I may be OK with this, I don’t think buyers would agree to this.
    I don’t think its that simple.
    Yes, I have heard salespeople use this phrase when trying to convince me of buying something. Those are poor salespeople. I’m not trying to convince you of buying anything, just stating a fact.
    Paul

  25. Posted by Paul Hwang

    Milkshake,
    Oh, by the way most of the contractors I have talked to want half of the money upfront.
    Paul

  26. Posted by Paul Hwang

    A fiduciary duty is an obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust’s beneficiaries, and an attorney has a fiduciary duty to a client.
    A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and reliance on ithe fiduciary to exercise his discretion or expertise in acting for the client. The fiduciary must knowingly accept that trust and confidence to exercise his expertise and discretion to act on the client’s behalf.
    When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter. The client is entitled to the best efforts of the fiduciary on his behalf and the fiduciary must exercise all of the skill, care and diligence at his disposal when acting on behalf of the client. A person acting in a fiduciary capacity is held to a high standard of honesty and full disclosure in regard to the client and must not obtain a personal benefit at the expense of the client.

  27. Posted by The Milkshake of Despair

    Paul – I’m not suggesting that you personally change the way that you do business. You’re in charge and call the shots. Instead I was just offering a different business model that could be fairer to all parties involved. High maintenance clients pay more, low maintenance clients pay less. Agents aren’t left empty handed when a search yields nothing nor do they earn less from clients who go exhausting long lasting searches.
    I’ve been a party to many contracts (on both sides) and more often than not there’s no up-front payment required. Instead there are well defined milestones with corresponding payments.
    None of this is very hard to implement though I won’t hold my breath for an agent willing to work on “time and materials” terms. I’m the sort of buyer who tends to go through extended searches (the last two were 12 and 18 months respectively) though I did my own research and footwork, barely involving my agent until it came time to sign a contract. My guess is that I used about 1-2 hours per month of agent time during the searches with a final grand finale of effort to seal the contract.
    PS – I think you’re still conflating the idea of fiduciary duty with other aspects of an agent’s role. And when you quote another source verbatim you should acknowledge that source : http://definitions.uslegal.com/b/breach-of-fiduciary-duty

  28. Posted by Paul Hwang

    Milkshake,
    I actually agree with you, just don’t know how to do it.
    No conflation. I undertsand the intent of fiduciary duty.
    I feel it is a waste of key strokes for verbatim definitions in the age of google. Sorry if you thought I intended to atribute the definition to myself, that was not my intent. I think it’s clear the writing and spelling is vastly superior to my own and a simple google search will pull it up first. Maybe you are right though, I’m probably just being lazy.
    Paul

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