SF Bay CA Real Estate

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real estate laws

Real Estate Agent Commission

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In 2024 it became necessary for a real estate agent to get a written agreement with a potential buyer before they could tour a home with them. Claims had been made that sellers were forced to pay a commission to the buyers’ agent and that buyers should pay for their own agent. In Silicon Valley the default was that sellers pay all commissions but the sellers have had the choice how much to pay or even if they pay. Most sellers understood that a real estate agent is trying to earn money and is going to avoid working for no pay and accepted the default arrangement.

A benefit of the seller paying all commissions is that the buyer does not have to use his cash to pay a commission which would reduce how much he has for a downpayment. Having a larger downpayment enables the buyer to qualify for a larger loan and thus be able to purchase a more expensive home.

Home buyers are accustomed to not making any commitment until they are ready to make a purchase offer. Real estate agents representing buyers now have to overcome the buyers’ expectations. This could lead to lower commissions. It is likely that experienced agents who typically represent sellers will gain an even more advantageous position over buyer agents due to the reluctance of buyers to sign an agreement.

The written agreement between the buyer and their agent must specify the agent’s compensation (commission) and the length of the agreement. It should also describe the services the agent provides. Typical services would be finding properties, showing properties, analyzing property values, and preparing and submitting purchase offers.

Many home buyers believe they can find the home and don’t need any assistance doing that. The median days on the market, DOM, for Silicon Valley homes for sale is about 10 days. For Belmont homes the median DOM varies significantly but is about 9 days. Even with the available automated alerts, it could be challenging for a home buyer to respond in time for a newly offered home.

Although detailed up to date plots of Silicon Valley real estate trends are publicly available, the understanding gained from the daily professional involvement of a real estate agent is only available by working with an active agent.

Burlingame House Price trends

Many of the trend plots publicly available are simply republished plots created by the Multiple Listing Service. A handful of Silicon Valley real estate agents create more informative plots of Silicon Valley and Burlingame real estate trends.

Burlingame Days On Market (DOM)

Can Protected Trees Be Removed

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Cities enact their own tree protection ordinances, which are specific to that city. A long-time Palo Alto resident recently posted about his protected tree removal attempts to force his neighbor to remove Coast Redwood Trees whose roots were damaging his foundation. We reached out and talked to him for several hours. One of the points that came up was that the city department in charge of managing protected trees apparently enacted regulations to appease the local tree preservation group Canopy. After two years of court cases and numerous discussions, the owner of the damaged house was left with the understanding that the city expanded its protection to other tree types and sizes to appease Canopy, reducing the organization’s opposition to the removal of specific trees. Even if you believe you understand current removal regulations, don’t assume you can count on them.

The owner of the damaged home had an especially difficult battle because a local realtor indemnified the recent buyer of the property which the trees were on, telling him, “according to information I have, this won’t really be a problem” and that if it were a problem, he would pay for the removal of the trees. The real estate agent used both his in-house legal team and an outside legal time in an attempt to shield him from the fallout of his agreement with the buyer.

Palo Alto’s Tree Removal Process (Residential)

A “Tree Permit” must be obtained from the Urban Forestry Section of the Public Works Department. The application must include a report by a certified arborist.

The allowed reasons for removal are:

  • The tree is dead, is hazardous, or constitutes a nuisance under PAMC 8.04.050
  • The tree is a detriment to or is crowding an adjacent protected tree
  • The tree is at risk for retrenchment or other tree decline coping processes or does not conform with right tree in the right place principles.
  • The tree is impacting the foundation or eaves of a residence or any covered parking required under PAMC Title 18

If a new home is going to be built two other reasons are listed:

  • The tree is so close to the proposed development that construction would result in the death of the tree, and there is no financially feasible design alternative that would permit preservation of the tree, where financially feasible means an alternative that preserves the tree unless retaining the tree would increase project cost by more than twice the reproduction cost of the tree or ten percent of the given project valuation, whichever is greater.
  • Retention of one or more trees would result in reduction of the otherwise-permissible buildable area of the lot by more than twenty-five percent, and there is no financially feasible design alternative that would allow for preservation of the tree(s). For the purposes of this subsection (a)(2), a financially feasible design alternative means a design alternative that preserves the tree(s) and would not increase the project cost by more than twice the reproduction cost of the tree(s) or ten percent of the given project valuation, whichever is greater. All tree protection zones impacting buildable area are included in the reduction of buildable area calculation.

When the City receives the protected tree removal permit, they will send out a Protected Tree Removal Notice and send it out again when a decision is made. The notice must be posted on the property for 14 days before removal can begin.

SB 9 – California Senate Bill 9

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There seems to be ample fear, uncertainty, and doubt about the new senate bill 9 ( SB 9 ). City governments are described as scrambling to enact urgent ordinances. Many of the news reports emphasize that four homes would be built where there is currently only one.

The biggest change seems to be that city governments will have to write down the criteria to allow or deny a building permit rather than relying on personal subjective opinions. The first SB 9 application in Palo Alto was indeed to build four homes where there had been one. However, the lot is big enough to divide into four lots each 90’x100′. It would appear the first SB 9 application was indeed used as a way to avoid the time-consuming and costly process of satisfying arbitrary opinions.

Forcing local city planning and permitting to rely upon objective measurable standards could be a step towards local democracy. Currently, architectural review board members and other planning officials have wide latitude to base their denials on personal subjective opinions. If the criteria is written down, local residents can work together to change them.

The Turner Center at Cal Berkeley estimated it would make financial sense for property owners of 5.4% of the state’s 7.5 million single-family lots or about 410,000 parcels zoned for one traditional, single-family house, to add units.

Renting Out Your Condo or Townhouse

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Assembly Bill 3182 (Civil Code Section 4740 and Civil Code Section 4741) limits the restrictions common interest developments may impose on offering units for rent. It took effect Jan 1, 2021.

  • A common interest development may cap the number of rentals to 25% or more.
  • ADUs and junior accessory dwelling units (JADUs) can not be included in the cap.
  • The cap must not end the right of an individual owner who was renting out prior to Jan 1, 2021.

A JADU is typically an area within a home which has been allocated to house a separate individual or family. It may contain a mini-kitchen which uses plug-in appliances. Thus a condo or townhouse owner can rent out part of his unit irrespective of rental restrictions if he meets the JADU requirements.

View details of rent restrictions for common interest developments.

Learn more about ADUs and JADUs.