“You should check out the maps linked to from http://blogs.kqed.org/newsfix/2011/08/16/mapping-project-reveals-pre-earthquake-san-francisco/ — we managed to find our house (cropped excerpt attached to this email). In addition to being super cool, it could be a good resource for any clients looking at a pre-1906 building who want to know what the plan or layout of the building was ages ago. Ours confirmed our suspicions about our lot having been split, about the back part of the building being an addition, and about the lower floor having been split in two after construction.

 So who knows what you could find about your house?  Click here to find your street!

Super cool it is Josh!  Thanks for sharing!   (Josh is good at super-cool things in general and is co-founder of card.io which allows you to securely scan your credit card with your smartphone to buy things rather than typing in the number.)

www.unitedpolicyholders.org

The bottom line is they are a national charity based in the Bay Area that is resource for the public on getting their money’s worth when it comes to insurance policies. They publish road-tested tips on buying smart and trouble shooting claim problems. Their focus is on helping people protect their investment in home and/or business property and getting on a more level playing field with their insurance company after a loss.

You might find these resources helpful:

Do’s and Don’ts When Insuring Your Home: http://www.unitedpolicyholders.org/claimtips/tip_do_donot.html

Tips on deciding whether or not to buy Earthquake insurance: http://www.unitedpolicyholders.org/buyingtips/tip_buy_eq.html

Easy ‘how-to” tips on inventorying the contents of your home: http://abclocal.go.com/kgo/story?section=7on_your_side&id=3483123

Even though it’s been reported that in San Francisco specifically and the bay area in general that prices are leveling off, the disposition of so called “toxic assets,” will go on for some time to come.  I’m not going to attempt in a 600 word article to tell you how to buy a distressed property, but I think that starting with some terminology would probably help most of us to do what many like to do best – talk about real estate.

Let’s start with a “foreclosure.”  I hear people talking about buying a “foreclosure,” all the time.  There are three ways to do this:  Trustee’s sale, public auction and buying an “REO” through the regular sales process.

Trustee’s Sale:  To get into defining these types of sales, it’s necessary to step back a bit and talk about the process of foreclosure.  In California, we use a form of securing debt called a “Promissory Note” and “Deed of Trust.”  The word “Mortgage” is slang we use to describe the other two things.  Mortgages are a legal instrument not used in California so I’m not going to get into how it’s different.  The Promissory Note defines the terms of the loan and the Deed of Trust is recorded at the county courthouse in favor of the lender (or “Trustee”) against the property.  When someone has failed to make a number of payments, the Trustee can then record what’s called a “Notice of Default,” which starts a 180 day clock ticking for a Trustee’s sale.  Trustee’s sales are publically noticed and anyone can technically buy the property.  At this sale, the Trustee auctions off the property, for cash.  Sometimes individual investors buy the property but often the Trustee ends up buying it themselves at which point it becomes an “REO.”

Buying property at a Trustee’s sale is a tricky business and should not be attempted by anyone who is not a professional investor.  The biggest problem is that there is no protection assuring the buyer that they are the real owner of the property.  Understanding exactly what this means and learning to do the research to protect oneself is a full time job.  They are also only sold for cash, which is another huge obstacle to most people.  Which takes us to the next type of Foreclosure, the “REO.”

REO is an acronym that stands for “Real Estate Owned,” and these properties are usually owned by an institution that would prefer not to own them.  Most REO properties are sold just under market value and are listed by Realtors for sale through the regular Multiple Listing Service.  When you see property listed for sale as a “REO,” then, you know it’s owned by an institution and that it has been foreclosed.

When an REO property has failed to sell through the regular sales process, it may be auctioned off by one of several large organizations, such as REDC.  You can see their listings at www.auction.com.  Properties sold at these auctions are sold with Title Insurance, which protects the buyer against other claims against the property and ensures that at the end of the process the buyer is really owns the property.  Many properties sold at these auctions can also be financed.

Now for the concept of being “underwater.”  This means that the property is worth less than the total of the debt owed.  As has been widely reported, people who are underwater on their homes are not as motivated to keep paying the mortgage as those who have equity in them.  Makes sense.  A person who is underwater may try to get their lender to modify the terms of the mortgage by reducing the amount owed, reducing the interest rate, or both.  Another remedy available to people who are underwater is a “Short Sale.”

Short Sales are listed by Realtors and advertised in the Multiple Listing Service.  They are listed this way when the amount of expected sale falls “short” of the amount of debt on the property.  After an offer is received, which in effect proves the value of the property, an application is made to the lender(s) to request that they, essentially, forgive the short fall.  This request may be countered, granted or denied.  Getting a decision can take as long as three, six or even nine months; sometimes a lot less – you just never know.  The effects on the person selling the property are not generally as dire as when the property is foreclosed, and this is the main reason people attempt to do it.  In some cases, the debt is simply forgiven, and in others, the person selling may be asked to sign a promissory note for the difference.  Anyone attempting a short sale should seek the advice of a real estate attorney before making any decisions.  Because of the complexity and uncertainty involved in the process, these properties mostly sell below market value and can be a good deal for buyers who are willing to wait it out.

The above is a really general overview.  These can be exciting times if you’re in a position to buy and really hard ones if you are on the other end of one of these situations.  In either case, contacting a Realtor is a great place to start figuring it all out.

Here’s a list of the changes (to see the new map, click here):

A summary of the changes appears below.

Boundary Changes:

• Dividing line between 7b (Pacific Heights) and 7d (Cow Hollow) jogs south for one block at the west end and changes so that both sides of Green are in 7d (Cow Hollow) between Lyon and Divisadero. The boundary between Divisadero and Van Ness remains the same, keeping both sides of Green in 7b (Pacific Heights).
• 9h (South Beach) expands into portions of 9f (SOMA) and 9d (Mission Bay).
• Dividing line between 6b (Hayes Valley) and 8f (Van Ness/Civic Center) moves from Gough to Franklin. Dividing line between 6c (Lower Pacific Heights) and 8f (Van Ness/Civic Center) moves from Gough to Franklin between Sutter and California.
• Dividing line between District 8a (Downtown) and 8j (Tenderloin) moves from Geary to O’Farrell.
• 5f (Buena Vista Park) expands to include Ashbury Heights, and is renamed Buena Vista/Ashbury Heights, accordingly.
• 5e (Parnassus/Ashbury Heights) changes to include a portion of 5b (Haight Ashbury) which is commonly known as Cole Valley, and is renamed Cole Valley/Parnassus Heights, accordingly.
• 9a (Bernal Heights) expands to include portions of 9c (Inner Mission) south of Cesar Chavez between San Jose and Mission.
• Dividing line between 5c (Noe Valley) and 9c (Inner Mission) moves from Guerrero to San Jose between 24th St to 26th St.
• 5a (Glen Park) expands to include portions of 4s (Sunnyside), 4h (Miraloma Park) and 5c (Noe Valley).

Newly Added Districts, Carved Out of Existing Districts:

• 9G (Yerba Buena), carved out of portions of 9f (SOMA).
• 10M (Candlestick Point), carved out of portions of 10K (Bayview Heights).
• 10N (Little Hollywood), carved out of portions of 10K (Bayview Heights).

Renamed Districts:

• 8b (Financial District) is renamed Financial District/Barbary Coast.
• 9j (Central Waterfront) is renamed Central Waterfront/Dogpatch.
• 5e (Parnassus/Ashbury Heights) is renamed Cole Valley/Parnassus Heights.
• 1d (Lake) is renamed Lake Street (the word “Street” is added).
• 5f (Buena Vista Park) is renamed Buena Vista/Ashbury Heights

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: http://www.sfgov.org/site/assessor_index.asp?id=115404 

FAQs as Posted by the SF Assessor’s Office

Q1: I BELIEVE THE MARKET VALUE OF MY PROPERTY IS LESS THAN MY CURRENT ASSESSED VALUE. HOW DO I PROTEST MY VALUE?

First, check your current assessed value at http://gispubweb.sfgov.org/website/sfparcel/index.htm. 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: InformalReviewRP@sfgov.org. 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: www.sfgov.org/AAB.

Q2: CAN I, AS THE OWNER OF A SINGLE FAMILY DWELLING, DO BOTH PROCEDURES?

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.

Q3: WHAT DOES MARKET VALUE MEAN?

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

Q4: WHAT IF MY CURRENT ASSESSED VALUE IS BELOW MARKET VALUE?

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.

Q5: WHAT TAX YEAR AM I APPEALING?

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

Q6: WHAT TYPE OF INFORMATION WILL I NEED TO PROVIDE TO SUPPORT MY CLAIM?

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.

Q7: IF THE ASSESSOR OR THE ASSESSMENT APPEALS BOARD AGREES TO REDUCE MY VALUE, WILL THE NEW ASSESSMENT BE PERMANENT?

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.

Q8: WHY ARE TENANCY-IN-COMMON (TICs) UNITS EXCLUDED?

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.

Q9: WHEN WILL I BE NOTIFIED OF THE RESULTS OF MY INFORMAL REVIEW REQUEST?

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: http://www.sfgov.org/site/assessment_index.asp

2. Publication 30: “Residential Property Assessment Appeals”: http://boe.ca.gov/proptaxes/pdf/pub30.pdf

3. Informational Videos on Property Tax Appeals: http://sanfrancisco.granicus.com/MediaPlayer.php?publish_id=458

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.

http://www.UnitedPolicyHolders.org has information about all kinds of insurance – healthcare and auto as well as homeowner. For specific information about earthquake insurance, which is something many of you have asked me about over the years, check out this publication: http://www.unitedpolicyholders.org/pdfs/BigOne.pdf

As always, I’d love to hear what you think of this resource.