Welcome to our blog!

If you’re here, it’s probably because you—like most people in these uncertain times—want to stay up to date on the ever-changing situation in our economy, the housing market, and in our own homes.

We’re here to empower you to make confident decisions, whether you’re looking to refinance your mortgage, keep your family safe and comfortable, ensure your house is clean and safe, or to find a new home that better suits your new way of living.

Through a series of conversations with professionals in real estate, finance, health, and how your family lives, we plan to equip you with all the information you need for your family to adapt and thrive.

In our first post, we’re excited to share our conversations with real estate agents from the Bay Area weighing in on buying a home in the current climate.

These interviews took place the week of April 27th, 2020.

Thanks for joining us! What is something you’d say buyers should know right now?

Laura & Kristin (Marin): “Buyers should have their pre-approval package updated (meaning now) with proof of down payment in order. There will likely be an influx of inventory as the world slowly opens up so if buyers are ready and qualified, they will likely have choices and may find more value than they have in recent years.”

Bryan (Pennisula): “I am very big on my buyers being prepared. Get your ducks in a row. Once you’re prepared- stay current. If you can move quickly, you have an advantage. The only way to move quickly is to be prepared and that’s the best advice somebody could have is don’t be a casual observer, being an active participant.

Get prepared and engage in the marketplace. In our market, regardless of a peak or valley, the victor typically is the one who can move the fastest. That’s just the way it is.”

Michael (Wine Country): “I would seek value. I would negotiate and be willing to walk away. And, I would want to keep my options open to see what’s going to happen. We don’t absolutely know what’s in store for the marketplace. So, there’s a risk-to-reward ratio on both sides of the equation.”

Frank (San Francisco): “I’ll tell buyers the same thing at any given market at any given time: be picky because regardless of inventory levels; if it’s your primary residence, be picky. I would also encourage buyers to not get overly confident. Just because we’re going through what we’re going through doesn’t mean that every single price is going to fall by 25 or 30%.”

What has changed (and hasn’t) as it relates to securing financing? We noticed differing opinions on these answers and encourage you to continue researching this topic based on your personal circumstances.

Laura & Kristin: “Working with large institutions and established loan officers will be more important than ever. Banks are still lending!”

Bryan: “You want transparency. You want somebody who’s got a good experience, who will communicate with you clearly. I’m big on a local person. Find a good local person because a good local person has a reputation that they’re looking to uphold. A realtor is a great source to get referred to a mortgage person because they’ve had experience dealing with a mortgage person. Have them refer you one or two or three. If you want to shop it around, that’s fine.”

Michael: “Private banking, somebody like a First Republic. They’ll require you to have money on account there, but, they actually make decisions by committee, so you avoid a lot of that red tape. Your customer service is going to be extraordinary and they can make exceptions based upon some of the intangibles, in terms of understanding your assets, understanding your employment situation. So that’s a great way to go and if you can qualify for that, when you bring an offer to the table with that letter of pre-approval, the listing agent is going to counsel their seller client that it is as good as cash, so it gives you, it gives you, it gives you great leverage.”

Frank: “The last thing in the world you want to do, especially a first time home buyer, is to call a bank. You definitely want somebody who’s experienced, has been doing this for years, who is on top of it and understands all the intricacies of the banking system because, um, it is quite complex. It’s more complex than the typical consumer can see. Also look at portfolio lenders, like a First Republic Bank or Silicon Valley Bank. They look at the whole picture of the buyer a little bit differently than a Fannie Mae, Freddie Mac, or conventional bank, like Wells Fargo or Bank of America. It’s, it’s good to get two different opinions.”

If you were buying right now, what would you do?

Laura & Kristin: “I would not be afraid to be aggressive stepping forward with offers below ask. I predict we will see multiple offer scenarios now below list prices depending on neighborhoods and condition of the property. Great time to be a buyer. But also understand that there is pent up demand and shiny pennies will sell all day long.”

Bryan: “Identify the areas that are or are not at all an option. It’s easier to say what are the areas you’re not at all interested in. That is partly being prepared. And as you narrow that, you become more nimble and you can move quicker because you’re looking at specific areas. Being prepared means fine-tuning that as you go so that you and your realtor can become prepared together.”

Michael: “I think that buyers should recognize that they’ve got potentially a little more leverage today than before. They should negotiate really hard. Sellers should understand that they need to be real with their pricing if they’re genuine sellers.”

Frank: “I think the most important thing is setting up a zoom call with potential agents. I think the conversation is important because you have to feel good about who you’re working with. And I think you’ll know, by the tone and their reaction to the conversation, regardless of what questions you ask them. When you speak to an agent, that agent should not be afraid to ask you about financial information, your qualifications, where you work, how long have you been at your job? What’s your FICO score? How much money did you make when you first started? These are questions you should expect an agent to ask and you want them to know you intimately so they can prepare an argument for why you’re the best for a particular property. So make sure that that person is asking good questions.”

Should people expect any delays in the buying process?

Laura & Kristin: “Good agents should be organized on both ends. CAR has created a few new disclosure documents but nothing that will slow us down. Delays might occur if buyers aren’t prequalified with a large institution. We will also be guiding buyers to obtain homeowners insurance early in the buying process, this has been the norm for the past 12-18 months due to the fires in Northern California.”

Bryan: “It’s a lot of the same process. There are some initial forms, you’re going to have to view properties virtually before an in-person viewing with masks, gloves, and providing forms that say that you’re not sick. I mean, there’s a whole additional process, but the overall process stays relatively the same.”

Michael: “I can’t say that I’m personally having an issue with the timing of things. I understand the biggest headache is for those that are getting a loan and it’s the appraisal capacity and getting appraisers in and how are they going to do their appraisal, or are they going to just do a drive-by appraisal?”

Frank: “Last time I spoke to one of my regular appraisers, only about 20% of appraisers that would normally work have been working. I believe more are working now but you can expect delays with appraisals. You can definitely expect delays with lenders. Lenders were starting to keep up with cash transactions. they were starting to be able to close in 10 days, which looked just as good as cash. But I’ve been advising buyers and I’m working with to keep your loan contingency and appraisal contingency in place until the close. Here’s why- gosh forbid the lender decides, even though that they’ve approved your loan, your liquidity is not good two days before the close and they pull your loan. It was a rare occasion, but this did happen in 2008, 2009, 2010. So I’m advising all buyers to keep the full loan contingency in place until the close if possible. So we’re seeing that as a delay.”

Any changes in what people are looking for? What do you think will be more popular than before? (More space for extended family or a home office?)

Laura & Kristin: “Both home offices, space for extended family, yard, and access to open space will likely be popular post-COVID. We have seen the trend for more space for the extended families over the past few years as well as older parents investing in income property to give their young adult children a path to homeownership in Marin. The public schools will continue to draw people over the GGB both for economic reasons and the state of SF right now. Access to fresh air and places to walk/bike is at a premium.”

Bryan: “I definitely think that people are reconsidering their spaces. I think that home offices are being looked at much more than they ever were before. AUDs (Accessory Dwelling Units) are becoming something people might consider just in the sense of having an exterior office space. I think in new construction you’re going to see more people carving out those kinds of spaces. The location has always been important, but right now you look at location differently. ‘What can I walk to, ride to? What can I do as an outlet? We’ve never had that hyper-focus before.’”

Michael: “People are interested in the quality of life. So they want to know about not just the interior space, but what surrounds it. They are looking for privacy and serenity and those sorts of things. If we haven’t described those qualities of a home accurately in the past, we’re doing so today.”

Frank: “Well, it’s a little bit too early to tell if there are trends, but if I had to guess, I’d say dens/offices are going to come roaring comeback. They already are. Having that in-home office or flexible space makes a difference. And it doesn’t have to be an entire room. It’s a small, cozy room where you can lock yourself in and have your own soundbar.”

We hope you’ve enjoyed these conversations and found them to be helpful! Please take the time to visit our panelists on their websites linked above.

Update: Since these interviews, we’ve learned showings on all properties (including occupied homes) will be allowed as of 05/04/2020.

If you have any questions or suggestions for future posts please email us at support@aalto.com.

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