It’s last call at 2238 Market! As the modern mid-rise in San Francisco’s colorful Castro District (actually, technically, in Duboce Triangle) heads into its third year, an uptick in purchase activity leaves just three unsold residences up for grabs. And house hunters should take note: There are no major condo project under construction in the area; it will be years before more brand new homes become available.

Run, don’t walk.

New Homes 101

Transparent Pricing

› Tired of being outbid by other buyers? You’re in luck! By the time new homes hit the market, there has been months, if not years, of pricing analysis by the developer to ensure they’ll hit the numbers they need. The list price you see is the price you pay (unless a good argument can be made for a reduction — and if you have independent representation described below). Make no mistake that new construction carries a premium over comparable resale units. But in a rising market, by the time escrow closes on a new place, the buyer could have already banked some healthy appreciation.

More Inventory Than Meets The Eye

› Especially in larger developments, units available for sale are held off the MLS and other public listing syndicates so as to not flood the market with inventory. By releasing only a few homes at a time, the developer and their sales team are able to keep prices up. But that doesn’t mean your dream home isn’t available — you just need a broker on the inside track to scope it out and make the deal happen for you before another buyer gets to it. That’s where we come in.

Not Your Standard SF Purchase Agreement

› New residential condominium projects of five or more units require the use of a special purchase agreement approved by the California Department of Real Estate. These contracts are long — super long — and include notices about issues like latent construction defects as well as resale restrictions. It should be accompanied by a Public Report (Final or Conditional). And if a Certificate of Occupancy has not yet been issued by the San Francisco Department of Building Inspection, you’ll want to make sure your purchase is contingent upon receiving that.

Dual Agency vs Independent Representation

› If you walk into the on-site sales office at a new building, you’ll almost certainly be asked to register yourself as a visitor. Read the fine print! Unless you disclose that you are working with a broker, you’ll be waiving your right to independent representation. Why do you want independent representation? For one, it could save you tens of thousands of dollars (and possibly a whole lot more) on the Documentary Transfer Tax described next. Conversely, if you’re represented by the sales team also representing the developer (dual agency), you have effectively zero leverage to ask for seller concessions.

Documentary Transfer Tax

› In San Francisco, this tax is customarily paid by sellers in an ordinary real estate resale transaction. Not the case when buying new construction! New construction purchase agreements almost always stipulate that the buyer pays the tax. With independent buyer representation, you have a chance at negotiating for the seller to pay. Take a look at this guide from the SF Assessor’s Office and you’ll see the tax isn’t cheap — especially when you’re dealing with a purchase price of $5,000,000 and above.
 

Residence 202

Residence 501

Townhome Verte

The creme de la creme of all units at 2238 Market, Townhome Verte features a private entrance on 15th Street, 3-bedroom and 3.5-bath bi-level design, natural light pouring in on three sides, and direct elevator service. An exclusive entertaining deck atop the nearly 3,000 square feet home reveals spellbinding 360-degree views. For what it’s worth, speculative pricing was upwards of $5 million when the development debuted in May 2022. After a significant reduction earlier this month, 2159 15th Street is now listed at $3,995,000; HOA and parking fees total $390 per month.