Red Bridge Group

Ellis Act Relocation Fees: what a landlord needs to pay a tenant

Effective June 1, 2014, Rent Ordinance Section 37.9A was amended to require a landlord to pay to specific Ellis Act Relocation fees to tenants evicted under the Ellis Act the greater of the relocation payment amount specified above or the “Rental Payment Differential” defined as “an amount equal to the difference between the unit’s rental rate at the time the landlord files the notice of intent to withdraw rental units with the Board, and the market rental rate for a comparable unit in San Francisco as determined by the Controller’s Office, multiplied to cover a two – year period, and divided equally by the number of tenants in the unit.” (See Subsections 37.9A(e)(3)(E).

Here is a look at how a landlord would have to calculate the rent payment differential using the Controller’s Schedule for proper Ellis Act Relocation Fees for a tenant:

A. Year in which the Unit’s Base Rent was Established
B. Total monthly rent at time of filing of Notice of Intent to Withdraw Units
C. Rental payment differential multiplier
D. Monthly rental payment differential amount (B x C)
E. Total relocation payment amount using controller’s schedule (D x 24 months)
F. Relocation payment amount per tenant (E / number of tenants per unit)
G. Plus additional amount due to elderly or disabled tenant (if applicable)
H. Total relocation payment due to tenant (F + G)

We quickly ran some numbers for an investor client on a property in Noe Valley so they could understand what the Ellis Act Relocation Fees would be. The units were run down and clearly the seller did not have any money over the years from the low rents to update or maintain the property to today’s standards. Based on this new law, if our client wanted to Ellis Act this building, a relocated tenant in the building would be entitled to the following:

A. 1980
B. $857.52
C. 2.5740
D. $2207.25
E. $52,974
F. $52,974

In July 2014, landlords eventually sued the city to challenge this new ordinance. In this example, our client would have to pay this tenant $52,974 in Ellis Act Relocation Fees just for evoking a state law that allows a property owner to take a building off the rental market.

The Ellis Act is a state law and the tenants are supposed to financial money to help with relocation—not be a calculation of what the tenant should be entitled to based on draconian San Francisco city laws that are not effective.

PU’s Take on Zillow’s “Coming Soon” Feature

This past month, Zillow – after a buyout of Trulia – unveiled it’s “Coming Soon” feature – a way to let real estate professionals advertise and market exclusive listings up to 30 days prior to public MLS posting. This came as a shock to many industry professionals – who for the longest time – prefer to be the gatekeepers of all information real estate related. However – rather than fight a losing battle with technology and time – Pacific Union has decided to embrace and test this new Zillow feature – hoping to implement it in such a way that proves advantageous to our fellow Realtors – and ultimately, their clients.

Zillow claims that it’s website has 81 Million unique hits on a monthly basis – and also claims that their overall website traffic has increased over 50% just since January! This large database of users provides the perfect proving ground for Pacific Union to test the actual quality of Zillow’s daily viewers. With sites like Houzz providing remodeling tips and tricks for consumers – PU doesn’t yet know whether Zillow’s traffic is valuable. In other words – we have yet to conclude the motives behind the average Zillow user. Are they actively looking at homes to purchase or decide on selling their home – or are these 81 Million simply window shoppers – collecting ideas for remodeling or just day dreaming about luxury property in San Raphael? Basically – PU wants to know just how qualified the average Zillow visitor really is – and how valuable is this traffic generally?

For years – the battle between gate keeping and transparency has been fought. Old-school Realtors feel that the MLS provides a safe, secure – and most of all – fair outlet for real estate information. But new-school Realtors and their clients want more – they want information, and they want it all. Zillow’s “Coming Soon” program is a response to this age old dilemma – and they have really stepped out in front of the industry to say – this is where Real Estate is heading so get on board – or move out of the way. So while some agents share pre-market data on sites with subscribers – think Top Agent Network – the idea of sharing this information with the public at large creates some challenges for the MLS and concerns for some Realtors who are scared by the idea of this last commission based economy being changed so drastically.

So for the potential Zillow users – who could very well be qualified buyers – having this information will give the additional resources and time to consider properties for sale. And in the Bay Area where inventory is almost always low in recent days – this will change the 7 days to contract script that has become commonplace. So for agents – depending on how they view this change – many could really use this to their advantage and potentially find more buyers for their own listings than ever before.

So what does this mean for PU? Well – in order to fully vest ourselves in this new system – we will be launching an application interface in early August 2014 that will allow our Realtors to upload pre-MLS listings to Zillow’s “Coming Soon” feature. This ability will be built into the agent’s PU fees – and will not cost any additional money. It is really simple – PU will evaluate Zillow’s system based on the numbers and analytics they generate. If this system allows our agents to close more deals – and our agent’s find the system attractive and beneficial to their clients – we will install in permanently.

In the end of the day – the battle between gatekeeping and transparency will continue. But the industry is already changing – and we can see this everyday. Never will a website or mobile application replace the role of the Realtor – or the value a client represents to a Realtor. Both parties will always need each other – but technology can certainly help buyers and sellers overcome market challenges. For someone interested in purchasing a home – why should an MLS prevent that person from having every bit of information right at their fingertips so they can make an educated financial decision? Zillow even admits – no algorithm can replace human evaluation – as they point to their often hated Zestimate feature – which has terribly low accuracy and only a 2 of 5 star client accuracy rating and only comes within 10% of the final sales price about 1/2 of the time. In San Francisco proper – the rate of error is even larger. A computer can never replace the role of a Realtor. But Realtors can also never replace the role of the computer – and it’s ability to relay valuable market information more efficiently than through old-school gatekeeping methods. Real Estate professionals are inherently specialized to understand a specific market, neighborhood, or city – meaning they will always be able to predict home values with a greater degree of certainty than a computer program.

We know this is a change that many Realtors are not ready for – but as a leader in the Real Estate Industry (see blog post where PU ranks in Inc. 5000 for 2013) – we must be willing to accept the things we cannot change, have the courage to change the things we can – and possess the wisdom to know the difference.




Pacific Union Accolades – 2013

At Pacific Union International – the statistics and accolades we receive truly speak for themselves.

We are happy to announce that The Wall Street Journal and REAL Trends Inc. ranked 7 of our Pacific Union agents among the most prestigious Realtors in the United States for 2013 – out of 250 agents in the US for closed 2013 sales volume.

This goes hand in hand with our previous announcement made in May – where REAL Trends Inc. ranked Pacific Union as #3 in the United States for average sales price. This is the 2nd consecutive year running we have received this honorary mention.

This Spring – Christie’s International Real Estate named Pacific Union the 2013 Affiliate of the Year – all while the Web Marketing Association awarded us for best “Forward-thinking Digital Presentation Tool.”

Not only that – but Pacific Union is really expanding. Even in a city like San Francisco, where the market is truly saturated with agents – PU knows that only the best agents in San Francisco are helpful to their clients. Look out for a brand new PU team office in Noe Valley – opening in October 2014.

flagship office

Pacific Union International: Flagship Office Opening in Silicon Valley

This Thursday – April, 24th – Pacific Union will be opening our brand new Silicon Valley Office in Menlo Park! And in October, Pacific Union will open a brand new real estate team office in Noe Valley, San Francisco!

The new office location will be 1706 El Camino Real, Suite 200 – and Pacific Union Vice President David Barca, will be managing the team of real estate professionals in this region. Highly regarded in our real estate world here in San Francisco – we are eager and excited to see how David will bring PU into the future here in The Bay Area.

“We are excited to welcome these very successful and highly skilled real estate professionals to our team…this new group is reflective of our very high standards of performance and professionalism, and we are looking forward to the energy they bring to the entire organization.” Pacific Union CEO Mark A. McLaughlin said.

As Pacific Union grows and expands – we are excited to see this opening in Silicon Valley – and we feel it really serves to mark our involvement in the larger technology oriented community being grown in San Francisco. After all – this is one of the best and hottest markets in the US – and we want to ensure our continued presence for years to come. With the median sales price in this region at 2.6 Million for March (the highest we have seen in 1 year) – and a lack of inventory driving this price up, we expect to see success for all of our agents – old and new.

To kick things off properly, Menlo Park Mayor Ray Mueller joined VP Barca and CEO McLaughlin this past week for a ribbon-cutting event to celebrate the opening. To share in our successes – more than 50,000 was donated to 11 local nonprofit organizations as a show of appreciation to our larger real estate community of friends and family.

Among these nonprofits are Collective Roots, Jennifer Kranz Research Fund/Lucile Packard Foundation, Menlo Park-Atherton Education Foundation, One Million Lights, Peninsula Volunteers Rosener House, and the St. Raymond School.

Stop by and say hello – we are located at 1706 El Camino Real, Suite 200 in Menlo Park, California. Also – for all your San Francisco real estate needs – contact the Red Bridge Group – the best SF real estate team.

enhanced listings

PU Professionals: Enhanced Trulia and Zillow Listings

Marketing and advertising listings for Pacific Union professionals is changing as internet tycoons Zillow and Trulia assist in getting our listings out to the public. This will help us reach more potential buyers than ever before.

Pacific Union now offers the ability to do “enhanced listings” on the commonly used client search portals Zillow and Trulia. Now, Pacific Union agents – and their listings – move to the top of these search pages with more “popping” displays and images as well as an exclusive to place PU specific listings and agent contact information. These changes have been made possible through PU’s existing Premier Services Agreement. To clarify – PU will however no longer be offering this enhanced detail for our agent’s listings on Keep in mind – this is only for “enhanced listings” – your standard listings will continue to appear on 3rd party search portals – included.

With changes to our real estate industry coming primarily from the online sector – it is important that we not remain stagnant – but rather recognize industry changes as inventible and not something we can change. In order for us to remain an industry leader – and position our listings in front of the largest group of qualified buyers, it was important for us to make this change. Truly and Zillow are the leaders and has slowed to a screeching halt. Zillow is ahead of by 300% – according to recent data.

“After studying the field, we decided to redirect our financial resources to maximize the exposure of our clients’ listings through syndication. And already we’re seeing strong evidence that we made the right move, with Zillow leads on our listings up 244 percent in just two weeks.” – Pacific Union spokesperson. Contact the best Noe Valley real estate team today to learn about how technology can be your biggest asset when buying a home in San Francisco.

Pacific Union Opens Property Management Division

Pacific Union is proud to announce we are growing – with a new Property Management Division and the best Noe Valley real estate team.

Just barely a week after we opened our 22nd office in Lake Tahoe – Pacific Union is happy to announce the opening of our brand new Pacific Union International Property Management Inc. We will be offering a variety of property management services for owners of San Francisco property – from Single Family Homes, condos, apartment complexes, mixed-use properties (retail and apartments) and TICs.

After starting his own property management company called Heights Property in 2002 – Pacific Union’s new property management company will officially be headed up by veteran Realtor Michael Harrington

We believe this opening will allow us to provide even more value to our clients – especially for homeowners who now consider themselves investors in our expanding Bay Area market. Now – for the first time ever, Pacific Union is truly a 1 stop shop for all things real estate. From purchase and sales advice to mortgage and insurance – and now, property management has been added to the list. Whether you are selling property in Noe Valley, buying a home in The Castro, or renting in San Francisco – we are here to help. Contact the best SF real estate team for all things real estate!

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