Large Cupertino view home now available!   10387 Amistad Court, Cupertino California

Fabulous 5 bed + den, 4 bath home with lovely valley views from several rooms!  Room to accommodate two or more generations or live in help if so desired.  Lower level includes 3 bedrooms, 2 bathrooms and bonus room or retreat.  Upstairs are the main living areas (living, dining, family, kitchen, nook), master bedroom suite, one more bedroom and a large den or office.  Living room, office, balcony and master all enjoy views.  Good sized, private yard.  Located on quiet cul de sac in lower foothills, a very easy drive.  Best schools, including Monta Vista High School!

Please enjoy a slideshow of this fine home, and click to see more photos as well as some panoramas.

This property is co-listed

10387 Amistad Court, Cupertino California is co-listed with Mary Tan and George Tan of Coldwell Banker in Cupertino, tel # 408 861-8832.

Please stop by our open house this weekend!

This fine home will be open Saturday, 3/31/2012 from 1:30 – 4:30 (hosted by Mary Tan) and Sunday, 4/1/2012 1:30 – 4:30 (hosted by me, Mary Pope-Handy)

More information on  10387 Amistad Court, Cupertino California – a beautiful view home in the prestigious Cupertino foothills!

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Buyers who are getting slammed out of the Silicon Valley real estate market due to low inventory and multiple offers are extremely frustrated. In many cases, they write offer after offer, and each time not only are their bids rejected, but they never even get a counter offer.

You should not depend on getting a 2nd chance, of course.  Just because you write a contract on a San Jose area home does not mean that the seller needs to give you a counter offer.  Some agents and sellers don’t respond at all – not nice, but if you get dozens of offers, sometimes that does happen.  Sometimes they just take the best offer and run. Othertimes they only counter the best offer and forget the rest.

The question arises all the time: why isn’t my 20% down offer just as good as the 50% down or the All Cash offer? Isn’t 20% down good enough?

Cash is better because there’s less risk

Twenty percent down is “good enough” if there are no other offers. If it’s multiple offers, though, it’s probably not sufficient for most sellers provided that the all cash offers are written with realistic pricing. Right now, 25% of all sales in Santa Clara County are all cash, and sellers would far rather deal with an offer that includes no finance or appraisal contingencies.  For sellers, the fewer contingencies the better and no contingencies is ideal.  Particularly now, when we are seeing a very sudden and dramatic upswing in pricing, appraisal contingencies can kill an offer’s chances of success. With all cash, there is no appraisal at all – it’s a slam dunk on that front. (more…)

What is a real estate bidding war, and why is it back in Silicon Valley?

It is a supply and demand issue.  When there’s not enough supply for the demand, prices get pushed up.  The way that this happens is often through bidding wars.

When a lot of home buyers want the same property and write purchase offers for it, we have multiple offers.  In some markets, multiple offers come in at or under list price (I have seen this in cooler markets). But when the realty market is an overheated sellers market, inventory is too low for the demand, prices rise with those multiple bids.  Then you have bidding wars.

This can happen intentionally, as when home sellers knowingly under price the property to attract multiple buyers, or it can happen unintentionally, when the owner and agent priced the home in line with the comps and the market, but there’s an unexpected avalanche of interest. (The latter just happened to me when I priced a listing to be exactly in line with the market, but got 20 offers and a lot of overbidding.)   Either way, the result is similar.  Buyers up their price and sweeten their terms to win the deal.  Here’s what can happen:

• offers come in over list price
• usually the escrow period is short, to assure the seller it’s a “done deal”
• if owner occupied, often there’s a free rent back of a month or two
• some buyers may offer to pay costs that customarily are paid by the seller, such as an owner’s policy of title insurance, the escrow fee, transfer taxes, and in some cases, even the commission
• most of the time, “cash is king”, and the all cash offers will win the deal (or large down payments) – very hard for 20% down or less to compete against cash offers because they usually include an appraisal contingency (with prices escalating, many homes won’t appraise)
• many offers with no contingencies for inspections, loan, and appraisal – non-contingent offers can be dangerous, most of all if there are no presale disclosures or inspections
• most offers will come with proof of funds
• some will have the disclosures already signed too
• some will include a letter from the Realtor, the buyer or both – buyers may also include a photo

But let’s focus on the bidding part in particular for a moment.  How is all of this a bidding war? Is it just that offers come in over the asking price?  Yes, but sometimes even more is going on too. Let’s look at that now. (more…)

It’s a red hot seller’s market in Silicon Valley right now, meaning that there are more buyers hunting for just the right property than there are listings available.  The end result is multiple offers, bidding wars, pre-emptive offers and rapidly escalating real estate prices in many areas and segments of the market.

When there are lots and lots of bids on a San Jose area home for sale, what do home sellers do?  Most of the time, sellers begin with an “elimination list”.  That is, they start by deciding what they do not want to deal with. The more offers there are, the more critical this becomes since sellers normally don’t love the idea of reading 10 or more stacks of offers.  (Remember, the confused mind says no!) 

Sellers need to simplify their choices, and one of them is by eliminating the worst offers first.  A question for you to consider, if you’re a home buyer in Los Gatos, Saratoga, Campbell or anywhere in Silicon Valley is this: is your lender keeping your offer from getting accepted?  Does your lender make your offer worse to the seller? Sometimes that is exactly the case.

In some cases, certain banks or even credit unions are falling into the “elimination” list for some sellers as their agents may have advised them those lending institutions are slow or difficult.  Most of the time, these are the big banks – the ones that REO or short sale listing agents are demanding that consumers use for a pre-approval for submitting offers: (more…)

Yesterday I held an open house at my condo listing in Santa Clara.  Three different buyers told me that they wanted to write an offer but didn’t have their own agent. (What a big mistake!  Would you go into court without a lawyer?) Some of them thought that perhaps the listing agent could write up their offer – hopefully causing the price to fall.  One home buyer, though, wanted to write the offer without the help of any real estate agent at all.  Her thought was that the price would sell for less since only one agent was involved.  Wrong again.

The idea that these buyers have in common is that the buyer’s agent’s commission is somehow up for grabs.  But that’s not how it works.  We have 2 sets of contracts in our area, the CAR and the PRDS, but have a look at what the CAR offer says about broker compensation (found on page 8). Please pay attention to paragraph D below:

Who will get compensated at close of escrow?  Not just anyone, and not just any real estate sales person or licensee. The broker must be a participant of either the local MLS or a reciprocal MLS, or there must be a separate contract signed that provides that the buyer’s agent will get the commission.

So a real estate licensee who’s not a member of the MLS is probably out of luck.

Why is that?

The multiple listing looks to consumers to be just a big database of homes for sale.  That’s what is on the surface, however it misses the point. The reason the multiple listing service  exists is found in paragraph D above: fundamentally, the MLS is a broker-to-broker offer of compensation if the cooperating agent or broker brings a buyer to the table and it results in a successful sale.

Not a member of the MLS? This offer is not for you.

The workaround, of course, is that there is a form that smart agents can use if they are dabbling in sales outside of their own MLS area, or if they are not members of the local or cooperating MLS.  But the listing agent does not have to agree to it – does not have to agree to pay non-members of the MLS.

What if there is no other agent involved in the Silicon Valley real estate transaction?

The commission amount is set between seller and broker (agent) when the listing papers are signed.  The commission agreement sets for the possibility that another agent will be involved from another brokerage, and if that happens, there will be compensation shared.  If not, the listing agent gets the full commission.

The commission is not up for grabs.

If you’ve ever had the experience of selling your car, perhaps you’ve also had someone phone you who’s never even looked at your vehicle and ask you “what’s the lowest price you’ll take?”  Most of the time, auto sellers aren’t too happy with that question: the caller is low balling without even looking at what’s for sale.

That happens in real estate sometimes, too.

Today I got a phone call from a Silicon Valley condo buyer who asked me, without having seen my listing, “will the seller take less?”

Not a great question, for a whole lot of reasons.

First of all, part of a real estate agent’s duty is to protect the seller – and that means not telling consumers the lowest amount that a seller would take, or even if a seller would take less at all (unless, of course, the seller gave express directions to do so, which is very rare indeed).

Secondly, it is a little insulting to call on a property you’ve never viewed and start to verbally bargain down the price, or fish for the lowest possible price. What that does is make the listing agent feel “on guard” from the very beginning. Guess how that impacts your position if there are multiple offers?  You will have made an impression – but not a good one!

Most of the time, a home buyer is better served to not call the listing agent directly at all, but instead to have his or her buyer’s agent place the call to get some information.  There are better ways to figure out if the seller is motivated,  how the pricing looks, whether there will be multiple offers etc. – and Realtors and other real estate licensees are usually pretty practiced at getting the information without damaging the buyer’s position for offers or even potential multiple offers later.

Most of us wouldn’t try to represent ourselves in court, but sometimes don’t appreciate that these same principles apply with real estate; that is, the value of having a fiduciary, an agent, helping us not just when the offer is presented but every step of the way.   Let your agent represent you from earlier stages, and you will likely find that you are presented in a better light than you could do yourself.  Think before you pick up that phone and call the listing agent directly!

In Silicon Valley, the prices of houses are rising fairly dramatically right now. In some cases, it’s 10% or more month over month for certain types of homes & price points.  I’m frequently seeing houses in the $900,000 to $2 million range getting multiple offers (5-7) and selling for $50,000 to $150,000 over list price. In Cupertino and Palo Alto, it’s worse – sometimes more than 20 offers per house!

With rapid housing price appreciation in Silicon Valley, home buyers who are “patiently waiting” for more inventory and just the right house to come on the market can end up finding themselves “priced out of the market“.

What does it mean to be “priced out of the market”?

In a nutshell, it means that while a few months before, you could afford the type of house you wanted (more or less), but prices have risen so fast that now you feel that you cannot buy anything at all. You feel that it’s no longer worth it to buy – so you continue to rent. And you continue to watch prices rise, both for the home you wish you had bought but also the rents over which you have no control. The gap between what you could have bought (but didn’t) and what you can buy now can mean the difference between fe3ling able to buy a home and not.  When the gap gets too big, you are “priced out of the market”.

Have you been patiently waiting for just the right house to come on the market?  Let me suggest to you that it may not be forthcoming.  It is very possible that while you watched the market last year, prices were getting primed for a rebound of sorts. It’s now underway and guess what?  What you could afford a year ago is no longer possible today!

This is one time when waiting does not pay off!

Why do buyers wait when they might do better to jump in?

• they may be unrealistic as to what the market will bear (sometimes despite the statistics)
• they are cautious to the point of being unable to move forward
• they are listening to bad advice (at work, from friends etc.)

Want to be a home owner in the San Jose area? Hire a great agent, but then LISTEN to him or her! Pay attention to the stats (such as www.popehandy.rereport.com ) but remember that there’s often a lag time between what’s happening “in the field” and what’s apparent in the statistics.

If you need a reality check, go visit some open houses.  Today some buyers of mine and I visited a few open houses in Cupertino. At each one, it was a zoo!  So many people that I felt almost claustrophobic!  (Seriously, I loathe thick crowds, and these were fairly bad.) I asked the agent about offers and was told, at one place, that although it had been on the market just 24 hours, they already had 4 verbal offers – or 4 offers coming – and 10 disclosure packets out. (Old rule of thumb: one offer for every 2 disclosure packages viewed. Not exact, of course!)

This is no time to fiddle and watch Rome burn. If you want to buy a house in Silicon Valley and have been sitting on the fence, this may be the time to get off and dive in.  Talk to YOUR trusted Realtor for guidance as it’s not the same in Blossom Valley or South San Jose as it is in Saratoga or Monte Sereno or Los Gatos.

I’ve told my kids this: if I could, I’d be buying investment property right now.  Fortunately, they are both in a great, private college and I joke that every time I get a paycheck, it goes to their university  in SoCal – so no investment homes for me right now – but oh I wish I could!!

Will you be priced out of the market? I hope not. Check the stats, but talk with your trusted Realtor for guidance. Looking for a great agent? Give me a call and we can set up a time to chat in person or by phone.