Buying a Home in San Diego: January 2010

Welcome to San Diego, America's Finest City, and the land of loads of paperwork! If you have done your homework, you know that there will be a lot of paperwork when you buy your San Diego home. I'm not exaggerating. I've had clients from other states tell me that San Diego (or California, in general) has more than twice the amount of paperwork than they're used to having when buying a home in their home states. While I can't necessarily explain to you why we have so much more, I can review with you most of the paperwork you will see during your San Diego home purchase experience. Below you will find links to blog posts that review many different types of disclosures, contracts, and reports. Most of these posts I have yet to write (but I summarize several in this post), so feel free to sign up for my rss feed to be notified as soon as I write a new post. I always write my posts from a buyer's perspective, because I only represent buyers. My recommendation is that buyers read and learn about the forms they will sign in a real estate transaction, and also that buyers hire an exclusive buyer agent who is familiar with all the forms and specializes in using the forms to protect the buyers' best interests at all times. Click on any link below to read a complete review of each form or contract.

Disclosure Regarding Real Estate Agency Relationship - This is the first form you should ever see and sign from a real estate agent in San Diego. An agent is supposed to have you read and sign this form before acting as your agent in any way, especially before signing a listing agreement, buyer representation agreement, or any sort of purchase contract (but many argue that this form should also be signed before answering real estate questions or showing property to a buyer). You will see different versions of this form several times throughout your purchase transaction.

Disclosure and Consent for More Than One Buyer or Seller (to be explained in detail in a future post) - This form would usually accompany a buyer representation agreement. It's a disclosure that pretty much tells you that you are not the only client of the real estate brokerage you hired.

Buyer Representation Agreement - Exclusive (to be explained in detail in a future post) - This is the agreement you will sign when you hire Globella or another real estate brokerage to represent you on your home purchase. It outlines many things including the agent's duties and obligations to you, your duties and obligations to your agent, compensation, length of the agreement, etc.

Buyer's Inspection Advisory (to be explained in detail in a future post) -  The Buyer's Inspection Advisory would normally accompany the Buyer Representation Agreement or Residential Purchase Agreement. It's a disclosure that outlines the importance of performing professional inspections on the subject property and suggests a long list of inspections that can be performed. Working with me as your exclusive buyer agent can be more expensive than working with another agent. Although performing inspections is optional in California, I require my clients to hire an inspector when they purchase a property. I don't want any surprises after close of escrow.

REO Advisory Form (to be explained in detail in a future post) - This is a disclosure form from the California Association of REALTORS®. We want buyers to be fully aware of everything they need to know when buying a bank-owned (foreclosure) property. This is a must-read form. You will only see this form if you buy a foreclosure listing.

Statewide Buyer and Seller Advisory (to be explained in detail in a future post) - This form explains the real estate process in great detail. It's a must-read form for any buyer. You will see this form when you sign an offer to purchase.

Residential Purchase Agreement (to be explained in detail in a future post) - The residential purchase agreement is the instrument written by the California Association of REALTORS® that is used in most real estate purchase transactions. I recommend my clients to only use this contract for purchases, but there are scenarios when a buyer may not have a choice in the matter (for example, when buying a bank-owned foreclosure or purchasing in a new home community). A buyer should absolutely be familiar with this contract.

Counter Offers (to be explained in detail in a future post) - The counter offer form will only be used if a seller decides to counter a buyer's offer (rather than accept the offer or deny the offer).

Wood Destroying Pest Inspection and Allocation of Cost Addendum (to be explained in detail in a future post) - This form is an optional form that can accompany the Residential Purchase Agreement. The form is used to further clarify who will pay for repairs recommended from a structural pest control company.

Short Sale Addendum (to be explained in detail in a future post) - The short sale addendum will be used if you write an offer on a short sale listing. The short sale addendum allows the buyer to set an expiration date, clarifies how the buyer's deposit check will be handled, clarifies when certain time periods begin, etc., etc. This is a very important form that must be filled out correctly when writing an offer on a short sale.

Contingency Removal (to be explained in detail in a future post) -

Agent Visual Inspection Disclosure (to be explained in detail in a future post) -

Buyer's Inspection Elections (to be explained in detail in a future post) -

For Your Protection: Get a Home Inspection (to be explained in detail in a future post) -

Lead-Based Paint and Lead-Based Paint Hazards (to be explained in detail in a future post) -

Market Conditions Advisory (to be explained in detail in a future post) -

Megan's Law Database Disclosure (to be explained in detail in a future post) -

Real Estate Transfer Disclosure Statement

Seller Property Questionnaire

Property Inspection Report

Request for Repair

Appraisal Report

Local Area Disclosures

Natural Hazards Disclosure Report

Home Warranty

Notice of Your 'Supplemental' Property Tax Bill

Water Heater and Smoke Detector Statement of Compliance

Verification of Property Condition

Withdrawal of Offer

Cancellation of Contract, Release of Deposit, and Joint Escrow Instructions (all above to be explained in detail in future posts) -

As you can see, we have a lot to cover! If you have preferences about which form or contract I write about next, send me an email or leave a comment on this post.

This post does not contain every piece of paper you will ever see in a San Diego real estate transaction. The real estate market is always changing. There are new disclosures and forms that the California Association of REALTORS® puts out in different real estate climates. Different real estate companies may also have their own forms or disclosures they want you to sign. Banks tend to use their own purchase contracts and disclosure forms when selling foreclosure properties or short sales. A buyer should know that a real estate agent can give real estate advice but cannot give legal advice. If you seek legal advice, my suggestion is that you contact an attorney. The San Diego Association of REALTORS® (SDAR) provides a phone number and a link for San Diego real estate attorney referrals. Click here to view that information on SDAR's website. Nothing in this post was intended to be legal advice in any way. The content in this post is simply for informational purposes only.

When I began thinking about opening up my own real estate company in 2008, I wanted a name that would be meaningful and easy to remember. 'Gramm Realty' certainly was an option, but there are other Gramms in real estate in other parts of the world, and I wanted something unique. My wife and I brainstormed for days, weeks, even months before we finally found a name that fit all the characteristics: Globella.

Why Globella?

'Bella' means 'beautiful' in Italian and Spanish.

'Globus' is Latin for 'sphere' (and the German word, 'globus' also means 'globe' or 'world').

When you put the two together, they become 'Globella,' and that stands for 'Beautiful World.'

Why is this meaningful? Ever since I've been old enough to remember, I've always been in awe of the beautiful world we live in. I was born in the lake-filled state of Minnesota. I grew up in the desert of Arizona. I've hiked the amazing Grand Canyon in Arizona and been to Waimea Canyon in Kauai, Hawaii. I've visited the Austrian Alps, where my wife was born and raised. I've been lucky enough to have seen the glaciers of Alaska, camped alongside Lake Powell, driven the back country of upstate New York, and felt the mist from Niagara Falls. I've snowboarded the mountains of Colorado, Utah, Oregon, Nevada, California, Arizona, Austria, British Columbia, and Alberta. I've driven cross-country from Bloomington, IL to San Diego, CA in a college-friend's "project Jeep" without stopping to sleep. I've studied physics, upper-level mathematics, biology, chemistry, and human anatomy and physiology. In all these experiences, there is one thing that I can't deny: The world we live in is an absolutely phenomenal place. Whoever put it here is a lot smarter and more amazing than any person I've ever met. In naming my company Globella I give credit where credit's due (to the One who made it all), and I hope that the homes that my clients buy are small symbols of the beautiful world we call home. A home is a place of refuge and shelter. My hope is that Globella clients find a home that allows them to experience and enjoy the miracle of life. OK, now that I've laid my heart on my sleeve... here are a few photos my family and I have taken that inspire me.

Sunset in Rosarita, Mexico.

Sunset in Puerto Vallarta, Mexico.

Bald Eagle in Alaska.

Alaska.

Storm Clouds Rolling into the Dominican Republic.

Sunrise on Road Trip to Arizona from San Diego.

Shamu!

Pismo Beach, California.

Pacific Beach, Mission Bay, and Mission Beach in San Diego.

Giraffe at The San Diego Zoo.

Downtown San Diego Skyline (we rented a ski boat and had a blast in the harbor!).

Kauai Coastline.

Snowboarding in Obertauern, Austria (one hour from Salzburg).

Our motto is 'Beautiful Home. Beautiful World.' We truly believe that San Diego is a wonderful place to call home, and we enjoy our jobs helping San Diego's home buyers!

If you are planning to buy a home in San Marcos, CA, be sure to put Mahogany on your list of must-see communities. Mahogany is a new home community being built by Brookfield homes. I have taken several clients there over the last year or so, and one of my clients ended up buying a Mahogany home just a few months ago. The location is in the foothills just outside of Carlsbad (outside of Carlsbad by about a 1/4 mile, I would guess). The homes range in size between about 2,400 and 3,800 square feet with 3-5 bedrooms, depending on which model you look at. For more information, go to Brookfield's website. Pricing starts in the high $500,000s.

If you do want to see the homes, be sure to take your agent with you. Every new home development I've worked with has a policy to only let you use your own agent to represent you if you bring your agent with you on the first visit to the community. In other words, in my experience builders are offering to pay your buyer agent for you (just like other sellers tend to do) as long as your agent is with you on your first visit. Otherwise, the builder forces you to use its own sales agent (an agent of the seller) and makes you pay for your own agent if you want to have representation during your purchase transaction. They watch their door closely, and have a sign-in sheet. There are only a couple of agents that work in the sales office, so they are able to recognize people that have been in there previously.

In my experience, buyers today want to be informed. They want a good deal, and they want to know that what they are buying is worth the price. Even if buyers end up buying a new home, they want to see other homes for sale in the area to make sure the price is right. Sometimes it makes more sense to buy a used home and fix it up. Other times you may find a used home that is in mint condition. I've never found a buyer who wanted to be represented by the seller's agent. I have met people, however, who didn't realize they were being represented by the seller's agent until after the transaction was over. That's crazy! An exclusive buyer agent's job is to represent you (the buyer) and your best interests at all times, so be sure to always take your agent with you when you go to see a new home community for the first time.

Photo courtesy of Mahogany at Old Creek Ranch by Brookfield Homes

When you are buying a home in San Diego, it's important to review market reports and statistics to know what's going on in the marketplace. I ran this report on 1/21/10. My report showed that 21 listings closed escrow in the last 90 days (according to information from Sandicor) in the Little Italy district of downtown San Diego. Prices ranged from $170,000 to $465,000. Some were bank-owned foreclosures, and others were short sales. Some properties sold for more than the list price and others sold for less. In the picture below you can review the report. Of course, we can run these reports for any area of San Diego, and this is part of what I do when reviewing the marketplace with my clients in our initial consultation (see my blog post about the Globella Buyer Strategy Session).

My report also showed that there are 45 active listings for sale in Little Italy. If 21 listings sold in the last three months, that's an average of seven per month. If we stay on that pace, it will take about six months to sell most of the current inventory. If you want to buy a condo downtown, you may come across many types of listings including bank-owned foreclosures and short sales. It is absolutely important that you hire an agent on your side of the transaction to help you navigate your way through this funky real estate market.

Click here to view current listings for sale in Little Italy and other areas of downtown San Diego.

Electra is a luxury condo building in downtown San Diego built in 2007. The building is 43 stories tall with 248 units. Many of the units have phenomenal views of downtown and the San Diego Bay. I recently (July 2009) helped a client purchase a 2-bedroom (plus a den) condo on the 42nd floor. I wish I could move in! The place was beautiful. The amenities at Electra, in my opinion, are top-rate. I also love the fact that they preserved a historical building at the base of the development (see the picture on the right).

As of 1/21/10 there are 13 units for sale in the building (active listings). Most are re-sale listings, but some are still being sold by the developer. List prices range from $349,000 at the low end (for a 1/1 on the fourth floor) to $1,795,000 on the high end (for a 2/2 with 1,707 square feet on the 31st floor). There is also a unit on the 43rd floor (the top floor) listed for $1,650,000.

Another interesting thing is that there are currently zero Electra listings listed in Sandicor (the San Diego MLS) as "contingent." Listings with the "contingent" status most often are short sale listings that have already accepted an offer but are waiting on bank approval (which may take several months or may never happen). Currently, there are six listings in escrow (marked as "pending" in Sandicor), and two listings have actually sold there in the last three months.  One 2/2 unit on the sixth floor sold for $557,000 in December, and another 2/2 unit on the seventh floor sold for $595,000 in November.

If you would like to view Electra listings for sale, go to my official website and visit the downtown page at http://downtown.globella.com.

I received this email today from a prospective client I spoke with a couple months ago. One thing that's important for people to understand is that our philosophy is to counsel people to make the best decisions for themselves. As many new clients as I work with in a year, I am pretty sure that I encourage just as many (or more) prospective clients to wait and save up money. The email below is a good reminder of the service we provide to San Diego home buyers, even when we're not helping them buy.

"Hello Justin,
When we talked in November, you gave me many good points to ponder, and I went back and forth about the home purchase for quite some time.  My girlfriend and I have come to a fairly firm decision that this isn't the time for us to purchase.  You convinced me that we need to collect more cash before we can honestly consider buying.  I really do appreciate you taking the time to speak with me, it was very informative and kind of put things in perspective about trying to save up 20% for down payment and closing costs.  If we ever do decide to buy you will definitely be our agent of choice.  I very much like the idea of working with an exclusive buying agent [I prefer to be called an "exclusive buyer agent", but he wrote "exclusive buying agent"], and we will be in contact when we have a bit more capital saved.  Thanks again."

I would like to clarify that I don't tell people that they should put 20% down. Many of my clients have put down as little as 3.5% (and my military clients many times finance the whole purchase with a 100% VA loan). However, many of my clients do put 20% down (or pay all cash), and I find that these clients tend to be the ones who are less worried about making their monthly mortgage payment. There's no need to rush into buying a home. In fact, it's a really bad idea to rush into a home purchase. It's a huge investment (and many times it's not really an investment... just a huge purchase)! You should take your time, figure out your finances, and make sure you understand the marketplace before you dive in. I am always available for questions, and I take pride in being a resource and a sounding board for San Diego home buyers, so feel free to shoot me an email if there's anything you need.

Click here to view all downtown San Diego real estate listings.

Many of my clients have bought condos in downtown San Diego. It's one of my favorite areas of San Diego. My goal is to be a resource to San Diego home buyers, and I have put together a website for buyers like you who want to know what's for sale in downtown (and you don't have to register to see the listings). You can see below exactly how the site looks.

Click here to go directly to my downtown site to search for condos in specific condo buildings.

As you can see, I have set up this website with links for every building in downtown. When you click on any link, you are able to view the current active listings in that specific condo building. I organized the buildings into the different districts of downtown (East Village, Ballpark, Cortez Hill, Little Italy, Columbia, Marina, and Core). I also designed an interactive Google map at the bottom of the page with a pin for every condo development on the list.

If you are looking for a condo in Little Italy, you will be interested in seeing listings in condo buildings such as 350 West Ash, Acqua Vista, Aperture, Bella Via, Breeza, Columbia and Fir Lofts, Date Street Townhomes, and Doma. Other condo projects in Little Italy include Ecco Lofts, Finestra Lofts, Hawthorn Place, Kettner Rowhomes, La Vita, Lusso Lofts, Palermo, Porta d'Italia, Portico, Porto Siena, The State, The Waterfront, Victorian House, and Village Walk.

If the Marina District is more your style, you will be able to view listings in buildings such as 235 on Market, Atria, Brickyard, Cityfront Terrace, Citywalk, Columbia Place, Crown Bay, Harbor Club, Horizons, Island Lofts, Marina Park, Pacific Terrace, Park Place, Park Row, Renaissance, Pinnacle Museum Tower, and Watermark.

Would you like to search for condos in the East Villlage/Ballpark district of downtown? On my site you can view all the active listings in each condo development including: Alta, Angove Lofts, Diamond Terrace, Element, Fahrenheit, Jacaranda Studios, M2i, Metrome, Nexus, Park Boulevard East, Park Boulevard West, Parkloft, Park Terrace, Rowhomes on F, Smart Corner, The Legend, The Lofts at 777, The Mark, Union Square, and Vantage Pointe.

Maybe you are more interested in the Columbia District? We have all of those buildings, too! In you the Columbia District section you will find listings for buildings such as Bayside, Electra, Sapphire Tower, Seven on Kettner, The Grande, and Treo.

The Gaslamp District has residences like Gaslamp City Square, Meridian, and Trellis.

Cortez Hill has condo buildings like Aloft, Aria, Beech Tower, Citymark at Cortez Hill, Cortez Blu, Discovery, El Cortez, Park at 10th, Parkview, and Solara Lofts.

Anyways, by now you should get the point. I've organized all the condo buildings in downtown into an easy-to-use search page. This way you can always see what's listed in any condo building in downtown San Diego at any time!

If you'd rather search on your own you can always use our search function at http://listings.globella.com.

I hope you enjoy looking at the listings. Remember, the internet is a great tool, but it doesn't take the place of a good real estate agent. I will be here whenever you are ready, and you can always know that as long as you hire a Globella agent you will always be hiring an exclusive buyer agent, and you will always have a company and an agent who works only on your side of the transaction - the BUYER'S SIDE.

The highest-priced residential listing in San Diego County is a piece of land in Del Mar that is listed for $76,000,000. The property has phenomenal ocean views but no home. It is about 5.5 acres. The listing has been on the Sandicor MLS for more than 891 days without a price reduction.

The second highest-priced listing is a beach-front estate in Del Mar that is listed for $50,000,000. The home has been on the market for more than 380 days without a price reduction. The home has six bedrooms, eight bathrooms, was built in 1984, and has 6,551 square feet (according to Sandicor).

If you are interested in viewing pictures or more details about these listings or other luxury home listings around San Diego County, go to http://luxury.globella.com.  I have put together several helpful links on my real estate website with feeds from the Sandicor MLS that update daily to keep you informed of what's currently on the market.

My goal with this blog is to make it a real resource for San Diego home buyers. My hope is that the content here is helpful in many ways to anyone who is buying a home in the San Diego area. I am trying to put myself in my clients' shoes and answer all their (and your) questions about the buying process within all the different posts I write here. I have about a dozen posts in the draft stage that I am working on, and I have ideas for many more, but I want to make sure that I am writing about topics that matter to you, the San Diego home buyer. This is where YOU come in. Here is your chance to ask a San Diego real estate question. Depending on how many there are, I hope to be able to respond to your questions in future blog posts. Do you have suggestions for topics of future posts? Write them in the comments section or send me an email. I will leave this post active indefinitely, so it doesn't matter when you are reading the post. Feel free to comment or ask a question. Thanks!

I came across this video on one of my colleagues' (Ben Clark of Salt Lake City, UT) websites today. The video features an interview on CNN/fn (now CNN Money) with Stephen Israel, the president of an exclusive buyer agency in the Washington, D.C. area. I have never met Steve, but I learned today that he was a founding member of NAEBA (the National Association of Exclusive Buyer Agents) which I recently became a member of.

You should absolutely take a six-minute break today and watch this video if you are thinking of buying a home in the San Diego area. Many of the topics Stephen covers in this interview are philosophies and beliefs that I embraced when I decided to open up a new real estate company (an exclusive buyer agency) in San Diego last year - Globella Buyers Realty. The interview is short and sweet, and it's to the point. Why should buyers hire an exclusive buyer agent? How does dual agency affect a buyer? How do traditional real estate brokerages operate? What sort of conflicts of interest should a buyer consider before hiring an agent? Stephen answers these questions and more.

The female host  (I never caught her name) opens up the video by saying, "When you work with a real estate agent you automatically assume they have your best interests in mind, but as the saying goes - Buyer Beware. In many instances, your broker (the broker your agent has a contract with) can be working for both sides of the sale, and getting you the best deal may not be their priority."

I hope you enjoy it!