May 28, 2009
Name That "Noe Valley" House (And Architect)
From the Craigslist post (by way of a tipster):
This recently remodeled 2900 square foot home sits on a quiet, tree-lined street overlooking Noe Valley, downtown and the Bay Bridge. Built in the 1960s, this home is currently the private residence of a well-known San Francisco architect. The double-wide lot offers gracious living with easy access to downtown.
Asking $6,000 per month but also offering a "rent to own option." Two points for naming the house (assuming you show your work), a bonus for naming the architect.
UPDATE: A plugged-in "Dave" sweeps the points in under an hour - it's 195 Beacon, owned by Ross Levy of Levy Art & Architecture Inc. And for those who like to run the numbers, purchased in October of 2007 for $1,650,000.
First Published: May 28, 2009 8:45 AM
Comments from "Plugged In" Readers
Anyone ever rented to own? I'm curious how this option actually works?
Posted by: phatty at May 28, 2009 9:11 AM
Is that even Noe? It is overlooking it and you can walk easily to Church and 30th. But most would still call it Glen Park.
Posted by: San FronziScheme at May 28, 2009 9:18 AM
Ross Levy, Architect
Posted by: "Dave" at May 28, 2009 9:58 AM
That's not Noe. Descend 50 ft and you'll be in the Valley. It's sad the way unscrupulous landlords and relators are shrinking the Western Addition, Glen Park, and other "undesirable" neighborhoods each year.
Maybe some complete fool would pay 72000/year to live there... I lived near there a few years ago, loved the area, but these days that kind of money can rent you a great pad in a far nicer part of town.
Here are some neighbors:
Posted by: Sb at May 28, 2009 10:02 AM
Realtors do not call that area Noe either. But IMO Noe needs to be diced up. The next thing you know Mission Dolores is going to be in Noe. None of those streets between Valencia and Guerrero should be called Noe Valley.
Posted by: anonn at May 28, 2009 10:19 AM
During my 17 year real estate career, the market has tanked enough twice to force motivated sellers with homes that won't sell to get creative. I don't know if "rent to own" has exactly the same terms as "lease option" but it sounds like it might be the same thing. I've only been involved in a few but they all closed escrow.
A lease option is a unilateral agreement. The only party that has an option to back out of the deal is the buyer. Of course there is a considerable cost for backing out. The seller on the other hand is locked into the previously agreed upon purchase contract and has no other option but to sell his property with the terms agreed to in the purchase contract and the lease agreement, possibly as much as year or more earlier.
The usual scenario although there are several is that a potential buyer/lessee may want to purchase a home but at the moment they don't have enough down payment. If they know that in six months to a year or more that they will be acquire the full down payment, they may approach a motivated seller to consider a lease option sale.
A lease option is actually two simultaneous contracts, a purchase contract and a lease agreement contract writing at the same time.
First, the buyer and seller write a purchase contract for the sale of the property. The closing is at the end of the lease. They agree on a purchase price and any other terms just like a regular purchase at this point. Since the purchase price is established in the contract now it is a gamble for both parties. The seller hopes that the market will go down further and that the price he agreed to sell his property is higher than the market will be at the time of closing. The buyer hopes that the market will make a recovery, values will rise and his property is worth more at the closing than his locked in purchase price.
The purchase contract has terms that tie it to the lease agreement and vise versa. The transaction will close escrow at the end of the lease.
As with all purchase contracts, in order to be valid there must be consideration with the transaction. Whatever amount of initial deposit agreed to in the contract goes directly to the seller at this point in time. If the buyer changes their mind about completing the purchase, that deposit is kept by the seller. So it's important to determine before you agree that you will most likely be able to or want to close the purchase. The biggest risk for the buyer who will be getting a loan is that they don't know where interest rates will be at the end of the lease.
Second, at this same time the buyer and seller write up a lease agreement. It has wording that ties it to the purchase contract.
Sometimes part or all of the monthly rent is credited towards the buyer's down payment. That gives the buyer more reason to stay in the transaction. This credit is only given if the buyer actually closes escrow.
If the buyer changes his mind, then there are no rent credits and the seller keeps the initial deposit for keeping the property off the open market for the buyer.
Since everything in real estate is negotiable, there are many variations. This is how I have handled my lease options in the past. I'll be curious to find out if they are the same as rent to own.
Posted by: RSVP at May 28, 2009 10:24 AM
"rent to own" is a wool sack that you can pull over your own eyes so you can dismiss the high rental fee.
"Yeah, this place rents for twice what the place a few doors down is asking, but the money goes towards buying this house, so I'm not really throwing money away on rent."
Posted by: The Milkshake of Despair at May 28, 2009 10:40 AM
My brother once entered a lease-option agreement. At the end of the lease tearm (a year), he could not get a loan because the house did not appraise for the agreed-upon purchase price. Unfortunately, there was not a clause covering this in the agreement. The seller/landlord kept the deposit and part of the monthly rent that was to be applied to the down payment. Bummer for my brother. It worked out fairly well for the seller/landlord, although he still needed to sell his house.
Posted by: Contented (for now) Renter at May 28, 2009 10:54 AM
Just up the hill from a listing, which, judging from the permits, is a "pure flip" by the Three Musketeers. Good luck. Summer is in the air and that does seem to affect buyers. Obviously I think it'll be a nail biter, but there's still a window before more REOs slam the market (heck, even I'm thinking of bailing out, but as the wife says, "Where will we live?")
Posted by: EBGuy at May 28, 2009 11:19 AM
EBGuy- which house is the three musketeers flip?
Posted by: auden at May 28, 2009 11:29 AM
They just need to re-classify that listing to be Glen Park vs. Noe.
Otherwise, I don't see anything wrong - it does overlook Noe Valley.
Posted by: DanRH at May 28, 2009 12:15 PM
How many homes does he have?
Posted by: rolfsf at May 28, 2009 12:47 PM
Errr, perhaps... umm, how many architect Ross Levys are there?
Posted by: Debtpocalypse at May 28, 2009 1:16 PM
Nice catch... 228 Randall Street. Not 195 Beacon
[Editor's Note: Nope. 228 Randall was a previous Ross Leavy residence (compare the kitchens).]
Posted by: eddy at May 28, 2009 2:45 PM
Man you guys have better eyesight than me.
Posted by: eddy at May 28, 2009 3:48 PM
Ross for Less?
Posted by: kathleen at May 28, 2009 5:25 PM
It does say "overlooking Noe Valley". Not "in Noe Valley". 30th St in the border.
Someone who grew up three blocks from there
Posted by: friscolex at May 29, 2009 11:12 AM
The place shows up in "Noe Valley" on CL. That's the main issue there. It would get less hit/exposure if it had been put it under "Glen Park" then I understand the choice. Plus all this side of the hill if a great area and if there were a chunk of GP that should join NV, that would be it.
Posted by: San FronziScheme at May 29, 2009 11:25 AM
RSVP - thanks! I just entered a lease to own contract, unfortunately before I read your post. I think it'll work out. Your post is laden with experience, and invaluable. Comments like yours make SS worth the visit.
Posted by: 1stTimeBuyer at May 29, 2009 7:36 PM
EBGuy- which house is the three musketeers flip?
Up, down, east, west, north, south -- not sure what I was thinking when I wrote that. Anyway, I'm geographically challenged in SF as I live out in the "suburbs". A hill by any other name...
Posted by: EBGuy at May 31, 2009 10:06 AM