At a rate of about one property every 2.5 minutes, bank owned properties are going, going, gone…the tuxedo clad, high energy, “auction assistants” are coaxing bids out of a poker faced crowd.

I am indeed sitting on the floor because it is a full house here at the Doubletree Hotel “grand” ballroom off Arden way in Sacramento at the REDC auction you can find out more about at Most properties seem to be selling for between 3 and 4 times the opening bid, which is still a good deal if you believe the “previous values” listed on the program.

In my market, very, very few properties have gone to this type of auction. If, however, you are interested in Sacrameto real estate, there’s plenty here to choose from. There’s even a slightly tempting 19 acre parcel in Oak Run where my good friends Tom and Wendy live.

About 20% of properties for which the gavel comes down are being reauctioned a few minutes later for reasons of the buyers failure to qualify or prove funds to close. This qualification takes place at a bank of laptops at the far end of the ballroom. A number of the properties are proclaimed “sold, pending seller approval.”. I’ve been told this means that the bank which owns the property has 14 days in which to approve or reject the deal as the reserve was not met and that about 80% of these actually proceed to closing.

My client is hoping to buy a bank owned property in Tuolomne county that he already tried to buy twice through a normal mls sale. Both times the bank rejected the deal. We are going to be up toward the very end of the auction-only about 25 more properties to go. Wish us luck!!

(Oak Run parcel just sold for 17,500 for 19.8 acres.)


In a quick survey of adults I have taken, it appears that most of you have forgotten all about the 1938 Shirley Temple classic “Little Miss Broadway.”  In this fine film, Miss Temple plays an orphan (of course) who is adopted by the manager of a hotel populated by show business people.  She lives on the top floor (or is it the wealthy villian who does?).  In any event, drama and tap dancing ensue before the predictable happy ending.  While I never wanted to be an orphan, I did covet the real estate.

The Hamilton reminds me of this film because it is a 1930, 21 story, Art-Deco hotel that now houses 185 gracious studio condos and one gigantic, fabulous, full-floor penthouse.  While showing a studio last summer, I was told by one of the residents that the penthouse had a lap pool on the east end.  Naturally, when it came on the market, I needed to go check!  As you can see from the picture of the atrium at right, there is no pool, but there is one heck of a 360-degree view.  Add to this original marble and parquet floors, tromp o’lei backdrops and “wallpaper,” his and hers master baths (with matching view bathtubs carved of a single piece of Carrera marble), antique fireplace mantles, an outdoor space with fountain, two car parking, and a wonderful gourmet kitchen and you have over 3,800 square feet of sophisticated urban living.  Any takers?

It’s a good news/bad news situation. If your home is worth more than you paid for it, most people would agree that that’s a good thing. And if your home is worth more than you paid for it, you are likely paying the right amount of tax and so are not eligible for the scenarios described below. However, if your current assessed value is more than the fair market value of your home minus $7,000, you may be eligible for a reduction in your assessed value for the purpose of property tax calculation.

If you believe your home may be eligible for a reduction in property taxes based upon a decline in value, there are two ways you might proceed: an Informal Review by the Assessor’s office and/or a Formal Appeal with Assessment Appeals Board. The Formal Appeal, in particular, can be a complicated and time consuming process. Generally speaking (it all depends on the neighborhood and other details of your purchase), homes purchased 2005 through mid-2008 have the best cases for a property tax reduction. Declines from Peak Value (whenever that occurred) typically run in the 15% to 25% range. If your appeal is successful, the reduction in assessed value only applies to the 7/1/10 – 6/30/11 tax year. A decline-in-market appeal is only good for 1 year, the year for which it is filed. The Assessor’s “valuation date” is January 1, 2010 and any sales comparables submitted must have closed before March 31, 2010.

Informal Review

The SF Assessor’s Office has announced that they will now accept “Requests for Informal Review of Assessed Value” for tax year 2010/2011. Such requests must be filed by March 31, 2010 and apply only to single-family dwellings, residential condominiums, townhouses, live-work lofts and cooperative units. Last year 3,432 requests for informal review resulted in 1,683 reductions of assessed values for SF properties in tax year 2009/2010.

One can email the Assessor’s office with questions (Assessor@SFGOV.ORG), as well as call or visit the Assessor’s office to speak with the appraisers that are on duty (415-554-5596). And the SF Assessor’s website offers information regarding Decline-in-Value Informal Reviews: 

FAQs as Posted by the SF Assessor’s Office


First, check your current assessed value at Second, if the assessed value is higher than the market value, you have the following options:

1. REQUEST AN INFORMAL REVIEW (single family dwellings, residential condominiums, townhouses, live-work lofts and cooperative units only) – From January 4, 2010 to March 31, 2010, the Assessor will accept requests to review the market value of your property. Your request must be in writing by completing an application or submitting your request online with supporting evidence of your opinion of value. If you were granted a reduction for the year 2009-2010, we will automatically review your assessment for the year 2010-2011 to determine whether a reduction is still warranted, Send your request to: Assessor-Recorder, ATTN: Prop. 8, 1 Dr. Carlton B. Goodlett Place, City Hall – Room 190, San Francisco, CA 94102. Mail-in requests for an informal review must be U.S. postmarked by the March 31, 2010 deadline. By Fax: (415) 554-7915 or E-mail: Be sure to keep a copy for your records.

2. FILE AN ASSESSMENT APPEAL (All property types) – From July 2, 2010 to September 15, 2010 you may file an Application for Changed Assessment with the Assessment Appeals Board (AAB), an independent body established to hear and resolve valuation disputes between the Assessor and taxpayer. A $30.00 filing fee due at the time of application and the AAB will schedule a hearing for you at a later date. Applications may be obtained by contacting the Assessment Appeals Board – Clerk of the Board at 1 Dr. Carlton B. Goodlett Place, City Hall – Room 405, San Francisco, CA 94102, by phone: (415) 554-6778 or directly from their website:


Yes. If upon the receipt of your annual Notice of Assessed Value, which will be mailed at the end of July 2010, you disagree with the assessed value, you .can file an assessment appeal with the Assessment Appeals Board. Please see instructions above.


Market value is the price a property would sell for when the property is put up for sale in a competitive and open market.


The Assessor is required to enroll the lesser of your factored base year value (assessment) or the market value. For example, if the market value (what you could sell your house for) of your property as of January 1, 2010 is $500,000 and your assessed value is $200,000 the Assessor would enroll the $200,000 as your taxable value. You would not qualify for a lowered assessment.


The assessed value being appealed will cover the fiscal year from July 1, 2010 to June 30, 2011.


You will need to submit sales information and/or an appraisal performed by a licensed real estate appraiser to support your claim. The sales information or appraisal’s date of valuation should be near the January 1, 2010 lien date but no later than March 31, 2010.


No. The reduction is temporary and only applies to the tax year being appealed. Once a reduction is made, the assessor is required by law to annually reappraise the property until its fair market value exceeds the factored base year value.


Unlike residential condominiums and cooperative units, TICs do not have separate parcel numbers. A review of a single TIC unit is more complex. TIC owners can appeal their taxes by filing an Application for Changed Assessment with the Assessment Appeals Board beginning July 2, 2010 thru September 15, 2010.


Homeowners will be notified of the results of their informal review in the annual Notice of Assessed Value which will be mailed at the end of July 2010.

Making a Formal Appeal

The next open formal appeal filing period for San Francisco will be July 2, 2010 to September 15, 2010 — to appeal the 2010/2011 assessed value of your property. A formal appeal can be made for multi-unit and commercial properties, as well as for houses, condos & cooperative units.
It is possible to attend assessment appeals board hearings for other people to see how they work. They are open to the public. These 3 online resources offer important details regarding the filing of a formal appeal:

1. SF Assessment Appeals Board:

2. Publication 30: “Residential Property Assessment Appeals”:

3. Informational Videos on Property Tax Appeals:

Warning on Scams

There are a number of property-tax-appeal service companies, who have been sending out their solicitations on stationery that suggests a government agency affiliation. SF Assessor-Recorder Phil Ting has stated the following:

“We’ve received reports from dozens of taxpayers who have received a letter from companies offering to facilitate the property tax reassessment for $179 [or more]. This is unnecessary and deceptive. Taxpayers can fill out a simple, one-page application for a review of their property in my office, free of charge… There is no need to pay for this service.”
All information is from sources deemed reliable but subject to error and omission, and not warranted. Interested parties should contact the appropriate government agency to confirm all pertinent guidelines and procedures.

Going Green is Easy

January 21, 2010

…But it has taken a long time!  Remember back in 2008 when I posted that Stefan and I had signed up for a solar lease program with Solar City?  Well, I know I barely can think that far back, but the installers showed up bright and early Monday morning and the panels are going in today!  They installed a power converter box in the garage, reinforcements to our attic framing and then commenced installing the grid on the roof.  We will save a tiny bit of money each month over the cost of the lease, but the real incentive to participate is simply that we will be doing something to reduce carbon emissions using a part of our house we never even see – the roof!

The experience with Solar City has been slow, but not painful.  They have taken care of the plans and the permits.  Also, during the waiting period, the size of our system has increased from a 2.0 kilowatt system to a 2.7 kilowatt system for the same price, so we and the environment have benefitted from the delay.

The next steps are the city inspection, PGE inspection and turning the system on!

For more information on installing solar panels on your house, I recommend contact Jeanine at Luminalt at (415) 564-7652  (Luminalt is a local company located in the Sunset District using solar panels manufactured by the employer of Client In The Know Tanya Baker!); or Jesse Brennan at Solar City  650.963.5140.  It can’t hurt to check it out!

Kittens in Need!

January 20, 2010

OK, well, they’re not all kittens and if you’re not into the smooshed face cat thing, these are not the felines for you. But if you are . . .read on!  Client In The Know Amber Lowi recently brought to my attention an organization called “Purebreds Plus Cat Rescue.” This organization recently rescued nearly 100 cats from a breeder in Antioch who are now in need of homes.  If you think you can provide one or are willing to make a donation to support their work, please check out their website!

There is an important change just going into effect regarding FHA loans:  “Spot Approvals” are going away February 1. A Spot Approval is when a lender can approve and fund a loan on a specific unit in any condo building provided the building meets certain conditions (building is 4 units or greater, 90% of units sold, 51% owner-occupied, no more than 20% commercial space, healthy condo budget, etc.).

Loans insured by the Federal Housing Administration (or “FHA loans”) are just about the only loans available to buyers with less than 10% down.  FHA loans may be used to purchase both single family homes and condominiums, provided the condominium project is approved by HUD for this type of financing.

An FHA Spot Approval is key for buyers because it means the buyer has lots of inventory to choose from. As of February 1, HUD is eliminating Spot Approvals, meaning an entire building must be approved by HUD directly or by a lender directly. Because of fraud liability and risk issues, most lenders are not approving whole buildings and deferring to the HUD-direct approval method.

Now, you are probably wondering – how does this affect me?

Good news first:  FHA loans top out at $729k, so if the property you are buying or selling is priced above about $800k, this will not affect you at all.  If you are a buyer with more than 10% down, this might be good for you as competition from FHA buyers will be virtually eliminated.

And now the bad news:  If you are a buyer with less than 10% down, planning to use an FHA insured loan, this means that you will have less inventory to choose from OR a very long waiting period in escrow that might make an offer from you less attractive than one without the waiting period.  For example, in all of San Francisco, there are only 27 FHA-approved condo projects currently approved! **

Just a bit more (bad news):  If you are a seller, the buyer pool will be constrained to those with more than 10% down who don’t need to use the FHA program OR you will need to cooperate in a long approval process for your building to qualify for the loan.  I would not advise trying to qualify in advance of accepting an offer as the process is time consuming.  However, I would advise that you and your agent take a really critical look at whoever’s handling the loan for the buyer as all mortgage professionals are not created equal.  If you are interested in taking a look at the criteria for becoming FHA approved, just let me know!

**Why are there so few, you ask?  Well, one reason is that prior to last year, FHA loans were not available above $417k, so most buildings just didn’t bother.  Now, with the higher loan limit of $729k, FHA loans are a relevant part of our market.  If you have good credit and at least 3.5% down, you may be able to buy a home using this program.  If you are interested in finding out more – just ask, of course!