Costs of Buying & Selling a Home in Marin County, California — Who Pays What?

Below is a general breakdown of customary closing costs paid by sellers and buyers in Marin County.

The Seller generally pays for:

• real estate commission
• document preparation fees for the deed
• documentary transfer taxes
• payoffs for all loans against the property
• judgments, liens, etc. against the seller
• recording charges to clear documents of record against the property
• prorated taxes
• any unpaid HOA dues
• any tax delinquencies
• notary fees incurred by seller
• bonds or assessments (as agreed in contract)
• home warranty (as agreed in contract)

The Buyer generally pays for:

• title insurance
• ALTA inspection fees
• escrow fees
• applicable document preparation fees
• recording charges for documents cast into buyer’s name
• prorated taxes
• HOA transfer fees
• loan charges
• interest on new loan(s) from the date of funding to 30 days prior to date of first payment
• inspection fees (pest, home, roof, etc.)
• homeowners policy’s first year
• notary fees incurred by buyer
• bonds or assessments (as agreed in contract)
• home warranty (as agreed in contract)

Keep in mind that these closing costs may or may not apply to every purchase and that closing costs can be negotiated between the parties.

Novato Real Estate — A Buyer’s Market Like No Other In Marin County, California

This article concerns itself with the relative price and value of one of Marin’s most affordable towns–Novato. In other parts of California (and certainly across the country), real estate prices are down by 30% and foreclosures sky-rocketing. Yet, such phenomenon are very limited in Marin. In fact, much of Marin is experiencing a remarkably resilient home sales market trending upwards (even if just incrementally) in price.

Yet, in Novato (Northern Marin) many home buyers (especially those in the entry level and move-up markets) are firmly entrenched in “wait and see” mode. They are waiting to see what happens with prices. They are waiting to see what happens with interest rates. They are waiting to see what everyone else does. But, time may be running short. Some time soon people will be talking about how with the benefit of hindsight they should have done this or that, bought this home, or that fourplex. It’s inevitable.

Although the real estate market in Novato is gripped by lethargy (and home prices have dipped by 12 – 15 percent), it is for this reason that buyers should start taking aim and firing in the weeks and months ahead. As stated by Warren Buffet, “the time to get interested is when no one else is.” While Mr. Buffet’s commentary generally focuses on stocks and corporate governance, his observations and musings often apply in other areas, and certainly apply here. Real estate cycles create opportunity.

Buying A Novato Home

For buyers who are looking to buy their own home in Novato, there is great value out there RIGHT NOW. The question many are asking is “are prices at rock-bottom?” Who knows. Truth is, I don’t think that is the only, or even the most important, question to ask.

Even if prices did come down another 2 – 5 percent, who can GUARANTEE that interest rates are going to remain as rock-bottom low as they are right now? You can get jumbo, interest only loans at 6.25%! Indeed, interest rates remain very close to their historical lows. And it seems to me (and many analysts) that the recent problems relating to the alt-A loan meltdown will inexorably lead to higher rates in the future as lenders try to recapture lost profits. So, today’s rates may be lowest we will see for a long, long time. And those low rates are very likely to have a larger impact on your monthly mortgage payments than the price you pay for the house.

Mortgage math is important to understand. Let’s assume that today you could get an interest rate of 6.25% and that prices will go down (which is not happening in most of Marin, nor is it expected to happen). Let’s also assume that you “wait and see,” and eventually buy a $1 million home for $950,000 (5% less than its current price). But, when you finally end up buying, rates go up just a bit to 7.25%. You will pay more money out of pocket each month, even though you paid 5% less for that home! The difference in your monthly payments on your loans would be approximately $350/month. Why? Because with today’s low interest rates, the cost of borrowing the extra $50,000 is very low. As interest rates go up, the magnitude of increased monthly payments increases very rapidly.

The opportunities in the Novato market are extraordinary. Two years ago there were very few homes priced under $600K on the market at any given time (maybe 2 or 3, and they would sell quickly). Today there are 23 such entry-level homes, 3 of which are under $500K. In Novato’s move-up market segment, between $600K and $800K, there are 84 homes currently on the market. Granted some of these homes are not priced correctly for today’s market. But, many of these homes represent very good values. And those who need to sell, need to sell–their prices are SOFT. Remember, “price is what you pay and value is what you get” (another Buffet quote).

Investing in Novato, Marin County

As for investors, Mr. Buffet’s words again provide insight, “we attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Clearly, right now, fear is high. Capable buyers (e.g., those that can document their income and have good credit scores) are “waiting to see,” and everyone else is a renter. Thus, rents are up. And I can personally attest to a strong demand in the rental market in Novato. I recently helped investor clients secure tenants for two Novato properties. My voicemail was bursting with inquiries and my inbox was packed with applications. And these were strong applicants, many of whom are former home owners with lots of money in the bank who are “waiting to see” (e.g., they are fearful). In addition, many retirees seeking to retain their tax base are selling their Southern Marin and Central Marin homes and relocating to Novato (where they get more bang for their buck), which will certainly boost appreciation at the higher price points.

The great deals are not limited only to Novato, but can also be found throughout the North Bay. And this applies not only to single family residential properties, but also to multi-unit complexes. In fact, there are currently several large multi-unit complexes for sale with very attractive terms. Remember, those who need to sell, need to sell. Indeed, if you have money and would like more money, call me for ideas.

Marin County, California, Luxury Homes Report (September 2007 Sales Update and Inventory Analysis)

Overall, the number of active Marin luxury homes rose slightly last month. In the $2 million to $4 million range, the number of active listings bounced up by twenty-two for a total of 145 homes. Eighteen Marin homes sold in this price range last month (and another 19 are currently in escrow–nearly 1/3 of these are in Tiburon). While we may not know the magnitude of the scope and duration of fallout relating to the financing meltdown experienced in August, these numbers reflect a relatively robust sales environment for the end of summer, which is traditionally a bit on the slow side. It will be interesting to see what transpires in coming months.

Mill Valley, with its temperate weather, good schools, and easy commute to San Francisco via the Golden Gate Bridge, led the way in sales last month with four. Sausalito and Kentfield each had three sales. And Belvedere, Tiburon, and San Rafael each had two sales. Overall, the luxury home market in Marin County performed well: the average days on market was 109 days (up by 30 days from the previous month), the average sales price about $2.53 million (roughly $847/per sq. ft.), and these homes averaged about 3,221 square feet.

In the ultra-luxury $4 million and up range, there are currently thirty-nine active homes on the market in Marin, down by eleven from last month. Tiburon boasts the largest number of such homes currently on the market with twelve, followed by Ross with seven, Belvedere with six, and Kentfield with five. Five of these homes sold last month (two were in Belvedere) and there are another five of these ultra-luxury homes currently in escrow (two more in Belvedere, one in Kentfield, one in Mill Valley, and one in Ross). Homes in this category averaged about 198 days on the market, sold for $8 million, and had about 6,097 sq. ft. of living space. Currently, Marin’s most expensive piece of real estate is a unique gated Tiburon estate sited on over eight acres with world-class views and gardens–asking price: $38.5 million.

The above graph contains the numbers of active listings and homes in contract in Marin County?s luxury and ultra-luxury home market segments. Note that all homes in contract are included in the category ?Pending? even though some are technically ?Contingent? properties. Also, the information above is limited to Marin County’s Highway 101 corridor towns and cities that consistently maintain a monthly inventory of luxury and ultra-luxury homes (e.g., beach homes are not included here). Call Kyle Frazier, CRS, Broker Associate, Frank Howard Allen Realtors of Marin, at 415/350-9440 with any questions about a particular neighborhood or your situation.

About Marin Eichlers — Terra Linda, Lucas Valley, Marinwood, Strawberry, Sleepy Hollow

Between 1950 and 1975, Joseph Eichler and his company (Eichler Homes) built over 10,000 homes throughout California–including Marin County (Terra Linda and Lucas Valley),The East Bay, Palo Alto, Sunnyvale, San Jose, San Francisco, Sacramento, Thousand Oaks, and Granada Hills. Eichler, who was a California-based, post-war builder, sold many of his homes for about $12,000. His desire was to create affordable, unique homes, designed to take advantage of California’s mild climate. Eichler was also one of the first large developers to disavow racial restrictions in housing developments.

Eichler homes are mid-century modern in style, characterized by a melding of indoor and outdoor living. The designs were inspired by Frank Lloyd Wright, who was a consulting architect for Eichler Homes and Wright’s sensibilities guided the architectural firms chosen to design Eichler’s homes. Many Eichler homes have atriums, walls of glass, open beam ceilings, open floor plans, and radiant heat.

The homes have a post and beam design. Thus, ceilings are held up by 4″x12″ beams, resting on 4″x4″ posts. Plywood sheathing provides lateral support. The structure is built over a slab foundation on grade (there are no steps in Eichler homes–there are 2-story Eichlers, however) with radiant heating systems set in the concrete (hot water is pumped through pipes, which heat the slab). Because of the method construction, these homes perform very well in earthquakes.

Eichler was a perfectionist, dedicated to thorough community planning, professionalism, and high quality materials in construction. His homes remain icons of contemporary design and functionality. Indeed, the television series CSI films many of its episodes in Eichlers (located in Orange, California) as the homes provide a modern and stylish backdrop.

Where Are Marin County Eichlers Located?

Marin County has about 1,550 Eichler homes located in four basic areas: (1) Terra Linda–there are two tracts of homes here, Terra Linda South (with about 225 homes built between 1958 and 1960) and Terra Linda North (with about 625 homes built between 1955 and 1961–including about 8 two-story models); (2) Marinwood (with about 350 homes built in 1957 and 1958)/ Lucas Valley (with about 300 homes built between 1962 & 1966–this community is highly cognizant of promoting restoration and maintaining the integrity of Eichler’s vision through the Lucas Valley Homeowners Association); (3) Strawberry/Mill Valley (there are about a dozen homes, including some two-story models, in this highly desirable location); and (4) Sleepy Hollow/San Anselmo (these 15 homes were built from 1972-1974). In addition, Eichler built custom homes throughout Marin County.

Be sure not to miss Open Hearts, Open Homes, September 15^th & 16^th, 2007. A benefit for Hospice By The Bay.

San Rafael Real Estate Market (September 2007 Home Sales Report)

The San Rafael housing market has proven to be a mixed bag over the past few months. But, strong on the whole. Inventory has remained steady as there are currently 144 homes on the market–up by 14 from last month. San Rafael’s bread and butter homes (those priced between $750,000 and $900,000) continue to sell if priced correctly for this market. As always, homes that are nicely maintained, updated, and/or located in the most desirable neighborhoods continue to sell, although we are seeing buyers exercise great discretion when placing offers and negotiating terms.

Of the 27 homes that sold during the past month (there were 40 home sales in July 2007), they averaged about 64 days on market, for an average price of about $1.085 million (about $500 per square foot). Eleven of the homes that sold in August 2007 were priced under $800,000. The strongest micro-climate markets during the past month included The Dominican, Glenwood, Terra Linda, Marinwood, and Lucas Valley.

For a brief outline of the importance of the percentage of homes in “Pending” status, click HERE.

Mill Valley Real Estate (September 2007 Home Sales Report)

School is back in session and Mill Valley home sales and prices are strong. The inventory of single family homes is down to 69 units from last month’s 85. A mere 14 are currently on the market under $1 million! As always, the commute to San Francisco from Mill Valley via the Golden Gate Bridge (a short 5-10 minutes), along with the excellent Mill Valley schools, pleasant weather and laid back ambiance is very attractive to just about everyone. Accordingly, prices and sales are ever-strong. Indeed, Mill Valley is THE place people thinking of moving out of San Francisco generally start with when they decide to buy a home in Marin County.

Mill Valley homes priced between $1 million and $1.5 million are selling fast so long as they are nicely maintained, updated, and/or located in the most desirable neighborhoods–10 of these homes sold in August 2007 (down by 7 from July’s sales numbers). As with much of the rest of Marin, homes priced aggressively are getting multiple offers?note: the winning bid (which is not always the highest bid) is likely to be a couple of percent above asking price, depending on the home ad price. Mill Valley luxury home sales have also been robust with 4 homes selling (and several more currently in escrow) in the $2 million – $4 million price range. Just one of Mill Valley’s ultra-luxury homes (in the $4 million and up range) sold in August and another is currently in escrow.

Mill Valley homes that sold during the past month (there were 32 home sales, compared with 44 in August 2007) averaged 48 days on market and sold for an average price of about $1.31 million ($686 per square foot). The hottest market segment, as expected, was the under $1 million market with 14 sales last month. As noted above, with only 14 of such homes currently on the market, the absorption rate for such homes is just one month (indicating an extremely strong sellers market). Meanwhile, 10 homes sold in the $1 million to $1.5 million price range (resulting in a low 2 month absorption rate for these homes–again, sellers of such homes find themselves in a favorable position).

Marin County Real Estate September 2007 (Homes For Sale & Price Ranges)

The number of homes for sale (inventory) in Marin County, California continues marching upwards. There are 739 active listings (up by 50 from 689 active listings this time last month). As expected, we are seeing a substantial increase in the number of homes on the market this September–due in part to extended marketing periods and the traditional influx of new inventory after Labor Day.

The graph below breaks down the current number of homes for sale in Marin County, California, as of September 1, 2007, along with the price ranges for each town/city. Also included is a note indicating whether inventory is up or down over the past month:

Marin Single Family Homes For Sale

Some observations: If you want to live in tony Belvedere, you?ll need a good $2.75 million to buy at the entry level. Belvedere is again home to one of Marin’s highest priced ultra-luxury homes at $18 million–it boasts an infinity pool with views overlooking the Golden Gate Bridge. The highest priced home in Marin, however, is an ultra luxury Tiburon estate on about 8.5 acres, with 12 Bedrooms, 10 full baths and 3 half baths (it also boasts some very nice views).

The average asking price for homes in Kentfield is over $3.48 million (just under $950 sq./ft., with an average days on market of 103 days). On the other hand, San Rafael and Novato offer a total of 113 homes under $750,000 (up by 94 from July 1, 2007). Novato’s 235 active listings is most in Marin County (and up 25 from last month). Greenbrae’s inventory almost doubled this month–going from an astonishingly low 4 active listings up to 7–still lowest in the County. Mill Valley has just 14 homes priced under $1 million.

If you desire a more specific analysis of your neighborhood, please give me a call at (415) 350-9440.

Novato Real Estate Update (September 2007 Market Report)

In Novato, more than any place else in Marin, homes MUST BE PRICED FOR TODAY’S MARKET. They must be nicely maintained, updated, and/or located in a desirable neighborhood if they are to going to sell. By all accounts, showings are on the rise. But, it seems there are lots of folks waiting to see what happens with prices and interest rates. With the percentage of homes in escrow nearing all-time lows, this is possibly one of the best markets buyers in Novato are going to see for a long time.

Homes in Novato that sold in August 2007 (there were 29 home sales–down by 13 from July 2007) averaged about 85 days on market, for an average sales price of $885,000 (roughly $420 per sq./ft.). Homes in Hamilton Field, Pointe Marin, Presidents, Rush Creek, San Marin, Partridge Knoll, and Atherton Ranch continue to be in high demand, as do the new luxury homes at Stonetree.