Our latest Focus Time guest is an undisputed top Real Estate Agent in all of Sotheby’s International Realty’s Bay Area agents: Herman Chan.

He is an author; he's a speaker; he is a TV personality. You can find him on CNN, PBS, and HDTV.

Herman is one of San Francisco’s premiere Real Estate Agents and when he takes you under his wing, whether you’re a homebuyer, seller, or remodeler, you can guarantee that you’ll exceed your goals.

Read on to see how Herman got his start and where he sees the real estate market going.

Watch the interview with Herman

Let’s shed some light onto your background. How did you get started in the real estate world and how long have you been in this industry?

It's been almost 20 years. I was born and raised in the East Bay Area. I went to UC Berkeley and graduated in 2000 right before the dot bomb. I got my first job at GAP Inc. corporate and I left in three months. The corporate life just wasn't me. My mom said, why don't you get your license while you study, so I got my license and I started selling and I was really good at it. I ran with it and eventually I realized, why would I spend the next five to ten years studying to do something I don't want to do when I'm having a gale time making great money and helping my community. It wasn't calculated at all.

Lafayette, CA - Image by larieauphoto.com

What's your process like when a client comes to you to find the perfect home?

I find this really difficult to answer because I think what makes me a little different than many successful agents is that I don’t commoditize the process. They have team members that put you into a pipeline and conveyor belt and I just don't want to treat people or houses that way because every wine is different, every house is different, and when you start putting them down a conveyor belt, they feel that. I try to give my clients a Gucci experience. If they tell me they're very hands-off then I will accommodate that and when it's time to strike we go fast and hard. With other people, maybe a lot of hand holding is needed and so it just really depends on the person. It's really custom.

Danville, CA - Image by christianklugmann.com

What kind of trends are you noticing in the market? What are buyers looking for and how has that changed in the past year or two?

The world has changed since a year ago. Everybody is working from home. Before, the big desire was ADUs for income property. With COVID, there’s a shift away from that and now the ADUs are for family, either being converted into luxury dens or work from home offices. Before, this space was an afterthought, a little closet converted. Now, it's just as important as the kitchen, an actual dedicated room that's spruced up with all the bells and whistles. And obviously yards are huge because people are stuck at home with the kids.

We work a lot with clients who are focused on returns on their homes. What would help sellers?

We have to understand that the times we're living in are different. For example, I'm in a listing right now with five bedrooms. Maybe in the past you would do every room as a bedroom but now everybody is working from home. I specifically request that the stagers include an office in one of them because that's just what people want now. Staging to tell the right narrative is important but as you know people are still living at home so bathrooms are always a great return on investment. If you're going to be doing something, whether you're selling short-term or long-term, that's where you should put your money.

San Francisco, CA - Image by Aerialcanvas.com

From working with you in the past, we’ve seen your approach to working with clients as very real and transparent. What kind of reality check do you give to folks that are just starting the process of finding that right home?

Right now, buyers are being slaughtered. There are homes that are commanding 20, 30 even 40 offers. My advice to the buyers in this market is to think of it like the olympics. If you're not trying to go for gold, there's no point. The market will go where the highest and best offer is and when you're dealing with multiple offers you have to be realistic. Oftentimes, a lot of agents don't want to tell their clients that because they don't want to disappoint or lose the client, but the fact of the matter is you're actually doing them a favor because you're putting them through this huge emotional roller coaster. And on the flip side for sellers who want $3 million for this house when it’s not worth that, I will say that. Sometimes I will lose a client because the sellers want to hear that their house is worth more. There are agents who will promise you the world and two months later you're still sitting on the market with two price reductions. I just want to be honest and save people time.

When you're going through the process of finding a home how much does aesthetics and design play into the search?

If you're an investor or flipper you actually want a house to be kind of ugly because that's where your margin is. For a retail buyer, there is a tolerance for minor projects, but the younger millennials and gen z’s want what’s done. They're busy. They're working all the time and so it's about instant gratification but there is a premium with that. I also think culturally we're the HGTV generation. HGTV has been around for so many years so people have been socialized since they were kids watching these homes, looking for what resonates, what colors are trendy, so it's really important to be visually oriented when you're listing a house.

Some clients are focused on their return on investment and making sure they get back every dollar they invest into the house. Are there deal breakers in a house that make it unlikely to sell for top dollar?

Brick foundation will lose probably 80 percent of the clientele. Anything to do with the unsexy stuff like mold drainage issues. Those things are problematic because they're systemic to a property. But everything nowadays in a certain price range under $2 million could be an ashtray and still be selling because this year has just been going bonkers.

People often have a misrepresentation of how much things cost, so when someone's thinking about home renovation do you typically encourage them to purchase a house that needs work or a finished house?

There’s what we call boutique buyers meaning they just want everything to be done. They're already thinking about putting a christmas tree in the living room. Other people are okay with that opportunity so it just kind of depends. What I love about you guys is that, for example, we're doing this deal right now in Oakland Hills and we're arranging for you guys to come and just do a little walk through on the property. It's such a valuable service that you guys offer to give somebody a walk through and an estimate because home inspections don’t have any costs associated with it as a point of reference.

We’ve done remodeling projects in your home. What was your experience like as a client?

There's a very loyal following for you guys for a specific type of clientele who does not mind paying a premium for security knowing that everything is top level and taken care of. They don't have to worry, they don't have to micromanage, so for professionals, that means the world. There's a whole range of contractors but when you find the right person who has a good work ethic, says what they mean and does it on time, that is worth its weight in gold. That was my experience with you guys. I never had to hurry and I was always communicated with and it was a collaborative effort. For someone like me who was very OCD and has high aesthetic standards - my plastic surgeon will attest to that - to align with you and still have good things to say, it means the world.

Walnut Creek, CA - Image by indskyhomes.com

In your home, we decided to work on your kitchen and bathroom. How did you decide on those rooms?

I bought the house from my grandma. In the kitchen, there was a stove and right next to the stove was the laundry so it's like, oh gosh, get my laundry away from my eggs. It was an old house built in 1912 so it really needed a refresh. Kitchens and bathrooms are pretty much where the return is. I could have done the same thing to my bedroom but the bedroom is just paint, closet doors, and some plantation shutters. The kitchen and the bathroom are what’s most enduring.

During COVID, I wanted to do a gym at home and you came and gave your opinion. I decided not to move forward with that project because I could put that money elsewhere into my property. The gym would have been so personal to me and how I work out. I would have to give up part of my garage which may have hurt the sale value later on. You were really instrumental in helping me divert away from that so thank you. You were honest and that helped me make my own decision as a client. And it’s the same in real estate too. Just give them the facts and maybe a little bit of your opinion and they're smart people who’ll make their own decision.

You're one of the most passionate real estate agents I know. You really breathe the industry so what is the most rewarding portion of it for you?

People think it's the money. Oh honey, I could have retired years ago. It's not about the money. I'm selling condos in New York for $390. I just closed one in Hayward for $425. Meanwhile I've got a couple $25 million properties also on the market so it's not about the price point. What gets me going is I like to problem solve and every buyer, every house, has a different hurdle. Come to me with a problem and I will solve it for you.

Lastly, what advice do you want to leave to people who are either buying or selling or remodeling?

It's the best time in probably my entire career to ever sell right now, unless you're a condo owner. If you're a condo owner, the market's flat but as a single family, now is the time to strike. If you're a buyer, fasten your seat belts because it's a very crowded space right now so if you're not going to offer to kill, don't even write. For general real estate remodel, it's important to align yourself with people who are going to give you the best advice; someone who has a great track record and they're not in it to make a quick buck. You need someone who's really passionate and has a strong work ethic. That's why you and I have maintained a relationship for so long. I feel secure giving you my referrals. So as a homeowner, for remodeling, just be very selective about who you partner with because once you're mid project it's very difficult to get divorced.

It was such a pleasure chatting with you, Herman! We look forward to seeing more of you soon!

To learn more about Herman’s listings, take a look at his site and his youtube channel. Check back for many more interviews with industry leaders coming up.

Focus Time Interview with Herman Chan - Sotheby’s International Realty

HDR Remodeling