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Mary Pope-Handy
Realtor
ABR, CIPS, CRS, SRES
Sereno Group Real Estate
214 Los Gatos-Saratoga Rd
Los Gatos, CA 95030
408 204-7673
Mary (at) PopeHandy.com
License# 01153805


Selling homes in
Silicon Valley:
Santa Clara County,
San Mateo County, and
Santa Cruz County.
:
Special focus on:
San Jose, Los Gatos,
Saratoga, Campbell,
Almaden Valley,
Cambrian Park.

Saratoga, CA, Real Estate Market Update

March 25th, 2015

How’s the Saratoga California real estate market?

This is a fairly comprehensive article on the Saratoga real estate market that will include the live statistics from Altos Research for listed properties (not closed) in Saratoga CA 95070, the closed sale data from the RE Report for last month in Saratoga 95070, and then the numbers I crunched for Saratoga – overall, and then by price point and high school district, as Saratoga has 3 different high school districts, each with an impact on home values.

First, let’s consider the months of inventory by price point and high school district that I crunched using MLSListings.com, our local multiple listing service provider. (For comparison, please also see a similar article on the Live in Los Gatos blog for the town of Los Gatos – real estate market by price point and high school district.)  The months of inventory is a reference to how fast homes would be absorbed into the market if sales continued at the same pace and no new inventory came onto the market.  It’s often referred to as “the absorption rate” – and that can be months of inventory, weeks of inventory, or days of inventory.  A “balanced” market is somewhere around 4-5 months for us, though the National Association of Realtors says that 6 months is balanced nationwide.  Anything under 3 is a good seller’s market, and under 1 is like saying that homes are “flying off the market”.

Here’s the chart for Saratoga – all price points, all school districts.  Overall it’s 2 months of inventory, which is crazy fast.

SA1

 

And for comparison here’s last month’s chart, which was also a strong seller’s market in the lower price ranges.

 

SA

 

 

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Many Silicon Valley homes are selling 10% to 25% over list price now

March 23rd, 2015

ExpectationsAlthough some properties are not selling within 10 days, many Silicon Valley homes listed for sale do go pending a week to ten days later with multiple offers.  Of those which sell quickley, pending sale prices are often far above the list price; we are seeing 10% overbids often, and sometimes 25% or more, in select cases.

Unfortunately, Bay Area many home buyers’ expectations have not yet caught up to the reality of the overheated market and are shocked that a great “full price offer” may well be the worst of the contracts presented.

What’s causing this to happen?

First, there’s a very dire shortage of homes to buy.  That can create a buying frenzy all by itself in an area where people are well employed and want to put down roots.

Second, the listed prices are placed strategically low to attract multiple offers.  If you were to look at the list price as opposed to the comps’ sale prices, you’d see that homes are not listed where they should sell, but often about 5% below that amount in many cases (sometimes more than 10% lower, though).

It is extremely important to realize that the list price may have little to do with the eventual purchase price.  Study the comps and then assume a trajectory.  If homes are going up at the rate of $10,000 per month for the type of home you like, then when you bid, consider the sale price 30 days out – or more – and then you may hit the target.

 

The difficulty with out of area or part time real estate agents

March 18th, 2015

Sometimes part time or out of area agents have no clue what’s happening in the local Silicon Valley real estate marketplace where they are submitting offers, and it really harms their clients!  Here are a couple of things to be aware of:

  1. Your agent needs to SEE the property. It’s really not good enough if the buyer sees the home and the agent swoops in to write the offer.  The buyer and buyer’s agent are a team, and if only one of you has seen the home, you the buyer are at a disadvantage because you don’t look serious or knowledgeable!  If your agent is out of the area, get him or her to the home if you want to buy it.  No excuses.
  2. Know what is customary for the county or area where the offer is being written.  In some areas, it’s normal for the sellers or the buyers to pay certain costs. Get that wrong and the listing agent (and then the seller) will wonder what else you don’t know.  It could be the amount of the initial deposit, the contingency days, or who pays what.    I usually only work in Santa Clara County, but sometimes do find myself in another neighboring county and one of the first things I do is learn the local ropes. (Title companies can tell you what is customary and many have a form online to lay out who usually pays what.)
  3. Make sure your agent TALKS with the listing agent!  Don’t be secretive.  Ask good questions like these: “what is the seller looking for?” “what is included or not included?” and drill down to specifics.  Does the seller want a rent back? If so, find out what terms might work and write them in.  Leaving a blank or not having that rent back addendum is like saying “I didn’t care enough to find out”.

Communication is key, from start to finish.  If you want the house, be consistent.  Don’t be flaky or up and down. Send the consistent message that you wand the home and be unwavering. If the seller’s agent thinks you are up and down, it will make your odds of success diminish.

Additionally – if you or your relatives go through the open house, BE NICE to the listing agent or open house host. Be polite, it actually does count. This is part of the courtship, and if you or your people are not nice, it will not help you to get your home.   Recently I  had an open house where the family members of one of the buyers came through and were downright rude. You can be sure that this did not help, and with all the multiple offers we are seeing, those little things can really add up.

Be the driver and set expectations – make sure that if you want the home that you have a good presentation, both in person and in your paperwork. In this market, a buyer cannot be too careful!

How many offfers will there be on that Silicon Valley home?

March 13th, 2015

The deep sellers’ market continues to frustrate Silicon Valley home buyers, particularly in the lower price ranges and best areas.  With scant inventory and sales, sometimes there’s very little to pick from, and many, many buyers all vying for the same property. A common question from Realtors and buyers alike to listing agents is this: “how many offers are you expecting?”

It can be hard to know.  While some real estate agents advise their sellers to market the home with an unrealistically low price in an effort to obtain an avalanche of bids, most do not, but instead caution that it’s better to list on the lower end of the probable buyer’s value than the high end. If it’s a little low, the market will correct it (at least in a sellers’ market) but if it’s too high you may see no contracts on it at all.

Everyone wants to know how many purchase offers there will be on a listed home.  In the MLS, I always mark a box requesting that agents who want to draft an offer contact me first.  The reasons are many.  First, I want to know how many bids there will be.  Second, I want to make sure that they know that there are disclosures and inspections available.  Another reason is to find out if they can follow instructions – this will help give me a sense of whether the agent is professional or sloppy, and provide a sense of whether it would be a good or bad experience to have him or her in escrow. Awhile back, I had  a wonderful listing on the market in San Jose’s Blossom Valley area (zip 95136).  The private agent comments say that offers will be on Thursday. And it gives agents the link to obtain disclosures.  In the last 3 days I’ve had at least a half dozen agents call to tell me that they are writing an offer and want to send it over.  They didn’t read the mls, they haven’t seen the disclosures.  Their buyers are at a disadvantage – I shake my head and suspect that these guys would be terrible to work with! (Want to interchange with current listing?)

Most agents will call or email first, pull the disclosures and have some sort of dialogue with me before submitting an offer.  The best agents will ask a few questions, such as whether the sellers need a rent back, if any property is excluded, and if there’s anything major they should know.  Some, though, will neither email nor call, will not let me know that a contract is coming.  Many times agents simply email or fax me an offer – and never call or email before or after to make sure it was received!  They do their clients a tremendous disservice.

In general, though, a rule of thumb we’ve used for years is that for about every 2 disclosure packages given out, 1 offer will be submitted.  When a home has a lot of issues, especially construction defects or need for repairs, the ratio will be lower.  If the house is turnkey and the pricing isn’t too aggressive, the ratio will be higher.  Sometimes we think that there will be 5 offers and we end up with 10.  At others we think there will be 4 and there are none!

Lately, because of the intensely competitive nature of the market, there are more and more agents who wait until the last minute to submit an offer.  If the deadline is noon, they will phone me at 11am to see how many offers there are, and I will get the contract an hour later.  In some cases, the deadline is noon and the offers roll in at 2pm (if the agent doesn’t call and explain why it’s late, it will not bode well for the buyers).  I am sometimes tempted to make a 7am deadline just to prevent this sort of thing from happening….

The market is tougher for buyers now than before, so if it looks like there will be 5 offers, assume that it will be 8 or 10. Above all, though, write an offer that you can live with whether you get the house or not.

 

For further reading:

5 things your Silicon Valley buyer’s agent can do to help improve the odds that your offer will be accepted

Preparing to buy your first home in Silicon Valley

Planning to sell your Silicon Valley home? Hire your Realtor before making any big decisions!

Hiring an Agent to Help You Sell or Buy a Home in Silicon Valley

Why didn’t my San Jose home sell?

There are more than 30 articles on this site relating to multiple offers. Find all of them here:
http://sanjoserealestatelosgatoshomes.com/category/buying-tips/multiple-offers-buying-tips/

Planning to sell your Silicon Valley home? Hire your Realtor before making any big decisions!

March 10th, 2015

Hire firstSeveral times in recent years I have represented buyers in transactions where the seller’s side of the escrow seems to be a little messed up.  In most of those cases, the problem was a result (directly or indirectly) of the home seller doing too much prep work before hiring an agent.  That is really putting the cart before the horse, is a waste of money and it can cause harm to you, the seller, down the road.

In a couple of instances, the sellers ordered pre-sale inspections first and hired a real estate licensee later.  What could be wrong with that?  Like all professionals, there are better and worse inspectors (and better and worse companies).  There are firms with fantastic reputations for honesty, thoroughness, and reliability. And then there are the duds.

Most of my real estate colleagues have a preferred vendor or two, but also have a long list of professionals whom they would trust to inspect a property and do a good job of it.  Most home sellers, though, do not have much experience with inspectors and do not know these companies by reputation.  More than once, I’ve heard sellers picking a national brand due to name recognition.  That may be OK some of the time, but it’s sure not how most real estate agents would suggest hiring anyone!

When you hire a Realtor or other real estate licensee in a full service capacity (which is what happens most of the time), you are paying not for just the MLS entry, the negotiations, the fliers etc., but the whole transaction package, from start to finish. You’re paying for advice and guidance and that can begin long, long before there’s a sign in the yard.  Why not take advantage of that guidance from the very beginning, with basic input on decluttering and staging and then which inspections to order – and for those, get a list of trusted sources from the real estate professional you hire.

As for the sales in which the seller made a poor inspection choice, in one case it cost that home owner about $10,000 and in another a lost sale.

There are many decisions you’ll need to make when selling your home.  You don’t have to go it alone!  Hire a great agent or broker to work with you and take advantage of your trusted resource from the very beginning. That will save you time, money and stress in the long run!

If you found this informative, there’s plenty more to read. Try one of these related posts:

Hiring an Agent to Help You Sell or Buy a Home in Silicon Valley

How to get a great buyer’s agent in a seller’s market (when most Realtors would rather assist home sellers)

How do you choose a real estate agent whom you trust?

Thinking of Selling Your Silicon Valley Home? Get It Right The First Time if You Go On The Market!

Mistakes that buyers’ agents make which damage their clients’ chances of winning in multiple offers

March 9th, 2015

Lightbulb This year I have seen lots of multiple offers, both when working with buyers and also working with sellers here in Silicon Valley. It’s not rocket science to write a strong offer and to get the terms and the “personal stuff” right.  But so many real estate agents don’t get it.  Unfortunately, when that’s the case, they seriously hurt their clients’ odds of success.  So let’s talk about it.

The basics for writing strong real estate offers in the San Jose – Silicon Valley area:

  1. Agents need to READ the MLS carefully as sometimes there are offer instructions, such as “call listing agent before writing deposit receipt”. That means that the buyers’ agent should email, phone, or otherwise make contact with the listing agent before writing an offer.   Why? It doesn’t matter, do it!  But usually there are a lot of good reasons, such as making sure that the buyers know ahead of time if  there’s a need for a rent back, that their agent knows about online disclosures, or any other condition.    This is missed probably 10% of the time.  Remember, drafting and presenting the offer are part of the courtship – if it goes badly, the escrow will be worse, so it’s crucial to make a good first impression.
  2. If there are online disclosures, reports and inspections, GET THEM. The listing agent can tell if you pulled them or not.  Write an offer without even looking at them and the listing agent may think your agent is unprofessional or a flake.  That may halt the deal right there. (Bonus points: the BEST agents will have their buyers sign all disclosures and submit them with the offer, at least if it’s multiples.)
  3. Don’t submit your offer too early or too late.  Listing agents do not want to see offers long before the deadline, because the response time may expire before the contract can even be presented to the seller.  Likewise, if the deadline is 10am Friday, don’t send it at 2pm Friday – you will be a pain in the rump and it will seem that you will “be difficult” in escrow.  Submit your offer within 12 hours prior to the deadline.
  4. Don’t be a secret.  If you like the property, make sure that the listing agent knows who you and your agent are.  If there are 20 offers, it will help if you stand out as people. Often when I have a listing which gets multiple offers, there will be some agent who comes out of nowhere with an offer – he or she never called or emailed, did not leave a card, did not appear to show the property, did not pull disclosures but wow – out of nowhere they submit an offer.  I got one like that today!  It is so not good!
  5. Have a complete offer package!  Include the agency, offer, copy of check, proof of funds and any other documentation.  Letters are nice.  Offer summaries from your agent are nice too.  Make sure that your agent and you look “easy to work with”.

Those are things your Santa Clara County buyers’ agent should do. But what about you as a home buyer?  Here are some a related articles with more food for thought:

How To Increase The Odds That Your Purchase Offer Will Be Rejected

5 things your Silicon Valley buyer’s agent can do to help improve the odds that your offer will be accepted

Preparing to buy your first home in Silicon Valley

There are more than 30 articles on this site relating to multiple offers. Find all of them here:

http://sanjoserealestatelosgatoshomes.com/category/buying-tips/multiple-offers-buying-tips/

 

Campbell Real Estate Market

March 5th, 2015

How is the Campbell real estate market?How is the Campbell real estate market? The numbers are up  from  last year and similar to the month before . Days on market are up a hair but very similar to a year ago.  At about 3.5 weeks, it’s still good for sellers.

Further down in this article, we’ll utilize the graphs from Altos Research, which uses list prices, and check out the trends in pricing by  quartile in this zip code (meaning 4 groups based on the pricing tier from least to most expensive).  Campbell condominiums and townhomes will be considered as well. And finally, a list of homes for sale in Campbell will be found at the bottom of the post.

 

First, here are some quick stats, care of my RE Report for Campbell:

 Trends at a Glance FEB 2015 PREVIOUS MONTH YEAR-OVER YEAR
Median Home Price -0.5% $1,032,500 $1,037,500 +16.7% $885,092
Average Sales Price +4.3% $1,049,030 $1,005,610 +14.3% $917,872
No. of Homes Sold -14.3% 12 14 -7.7% 13
Pending Properties +28.6% 18 14 -21.7% 23
Foreclosures Sold -100.0% 0 1 N/A 0
Short Sales Sold N/A 0 0 -100.0% 1
Active Listings +100.0% 8 4 -61.9% 21
Active Foreclosures N/A 0 0 N/A 0
Active Short Sales N/A 0 0 N/A 0
Sales Price vs. List Price +0.1% 106.9% 106.8% +2.5% 104.4%
Average Days on Market +13.2% 24 22 +49.7% 16
And from February:

What about the Campbell CA condo market?

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