Yesterday I attended a property inspection in San Jose and we found an unwanted resident in the garage: a black widow spider. In case you haven’t seen one, I thought I’d share the pic here (photo courtesy of home inspector Duane Serrano of Tri Star Inspections).

Needless to say, she’s not there anymore!

CC & Rs are “Covenants, Conditions and Restrictions“  (sometimes “Covenants, Codes & Restrictions).  They are a set of rules drawn up for a neighborhood or subdivision by the builder or by a board comprised of the builder and a few others who want to set the neighborhood standards to keep property values up.

The C, C & Rs  are put in place, usually for a set number of years such as for 30 or 35 years, and most of the homes in Silicon Valley do have CC & Rs and most of them are now expired.   It’s always for a finite period of time, though usually extendable if the neighbors vote it in again (which I have never seen done), but sometimes gauged by something perhaps not so predictible.  The weirdest time line I ever saw referenced something like “until the death of the last living great grandchild of…” and it mentioned one of the Kennedys. Odd, but apparently legit.

What are the CC & Rs about?

Here’s a peek at part of one -

Usually the CC & Rs dictate the minimum size of a home (e.g., the home must be at least “X” number of square feet)  that may be built in the subdivision, the setbacks (homes must be so many feet from the street and property lines), what kind of signage may appear (only for sale and for rent signs, for instance), and normally there’s a restriction on farm animals so that people may not raise goats, sheep, chickens and so on in their backyards or breed animals professionally.

Many years ago, some C, C & Rs also had restrictions on who might buy or live in a neighborhood (racial, religious and other restrictions).  This is illegal today, of course, and so the first page of any C C and R document you see now will have a large disclaimer stating that any fair housing violations are illegal and are null & void. Since the C C & Rs “run with the property”, they supposedly cannot be amended (though I have never been convinced that they couldn’t be - just that the government chooses to require the disclaimer instead).

Do the C C & Rs matter?

For the most part, they are irrelevant because in most of Santa Clara County, they have long since expired.

They can be a little helpful, though, as sometimes the setbacks (which may still be enforceable) may be stated more clearly than in the preliminary title report or elsewhere.

Often, too, they hide some historically interesting tidbits. Today I read the C C & Rs for a Leep built home (a very good builder of tract housing in the Santa Clara Valley) in the Cambrian Park area of San Jose.  I know that there’s an area of Campbell (that has a Los Gatos mailing address) with Leep homes;  one street in this area near the Saratoga and Los Gatos border is named Elwood and another Bearden. Today I learned that there were two builders of these homes, Elwood J. Leep and Leonard Bearden, Sr. So that was a fun tidbit - I have sold many “Leep homes” over the years, have known them to be well built but never had the builders’ first names before.

To summarize, in most cases, the C C & Rs won’t provide you with a lot of helpful information, but do try to obtain them anyway when buying a home in Santa Clara County. There may be information that is interesting, if not necessarily useful - and you never know, there may be a tidbit of helpful information buried in there along with the strange admonitions that homes not cost less than $10,000 when sold. That’s the least of our worries today!

If you’re a Silicon Valley homeowner, you will sometimes need to replace elements of your home, such as the roof or water heater, or do repairs or remodeling to keep the home functional, comfortable, and efficient. Kitchens and bathrooms need to be updated from time to time, and sometimes remodeled. These repairs and remodeling projects often (if not always) require permits and finals.

Will you apply and pay for the required permits and finals?

What difference does it make if you do or do not get them?

Will it matter when you sell your home?

If you’re a Silicon Valley homebuyer, the whole idea of buying a home without all the necessary permits is a bit spooky.  My buyer clients often hear or read something like “garage conversion done - permits unknown” or “kitchen remodel done by contractor but without permits”.  They worry about the consequences of buying homes with non-permitted work, so let’s talk about the issues involved.
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Last week I got an email from someone who’d seen a Silicon Valley house she liked from a real estate agent whom she didn’t like.  She wondered, “do I have to buy the house with that agent?” 

The answer, of course, is not always clear. It depends on your relationship with the agent.  It may also depend on why you choose to buy the home with someone else’s assistance.

(1) Your relationship with the real estate agent

Did you sign a buyer broker agreement with that Realtor? If so, you may owe a commission to her if you buy the home through someone else.

Did you write an offer on that property with the agent? If so, again you may owe a commission to him if you hire someone else to help you purchase it afterwards. 

In many cases, there is a verbal contract that you are working with a Silicon Valley real estate professional exclusively. This does “count” too but it may be easier to change your status if it’s a verbal agreement.

(2) Problem agents, problem consumers.  Do you want or need to break the relationship with your current agent? 

Is your agent giving too pushy? Doesn’t seem to know what he or she is doing?  Too hard to reach?  Too busy to really assist you? Or doing something else that you perceive as a “red flag”?  Sometimes agents should be fired. 

You most likely can break that agency relationship with a problem agent if it’s a verbal contract only and you haven’t written an offer on the property in question, but you must  clearly tell him or her that you are not going to continue working together and then have a gap in time between then and when you do write an offer on the home (at least a few days, if not a few weeks).  You can break the agency relationship verbally or in an email or both, but it needs to be clear so that there is no misunderstanding. A call or voice mail followed up by an email would be very clear.

You can terminate the agency relationship  very nicely and graciously, of course.   It is not necessary to tell him or her why you are electing to discontinue the relationship, but he or she will certainly wonder so you may nicely share your reasons.  I would just say try to be pleasant and thank the agent for the time spent.

Sometimes there are a few problem consumers working with ill-will who think that they can work with an agent, see a lot of homes, and then simply either go directly to a seller or listing agent or bring in an out of area friend or relative to write up the offer and close the deal.  If a consumer does this not because of a difficulty with the first agent but just in order to save money (or get a rebate) etc., it is possible that the first salesperson will cry “foul!” and press to be paid a commission.  The lawsuit in this case would be what’s called a “procuring cause” lawsuit.  Procuring cause means that the first agent was really the reason why the consumer purchased the home, and therefore is entitled to a commission (which the buyer might be forced to pay if doing a last hour agent switch).

A good example of a procuring cause lawsuit is the case of Jerry Seinfeld, who had to pay his agent $100,000 when he bought a home without her because he could not reach her one day.  Impatience will cost you!

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A year ago October, I attended the National Association of Realtors convention in San Francisco and met a highly successful, very experienced and decorated (awards, designations) agent from the east coast. When I asked her which part she was from and worked in, she rattled off about 4 large counties. (I’m familiar with the area, so wondered where she was within it.) She did not want to tell me where her office was because she sold in all four or so large areas. She had what I considered to be a huge turf! Her idea of “local” was over 50 miles in diameter - maybe 70 miles or more!

Some agents claim huge territories where they work!

And then a  month or so ago, my husband, Jim Handy, and I attended a party at a lovely home in Santana Row and one of the guests asked me where I worked.  I told her that  I sell all over Silicon Valley, mostly in the “west valley communities” of Los Gatos, Saratoga, Campbell, Almaden Valley and Cambrian Park, but I have listed and sold all over. This gal wanted me to tell her that I worked only in Los Gatos, or only in Cambrian Park or Almaden Valley etc. and it was hard for her to imagine I would really work all of the San Jose area.  Just last week I got a similar question from someone who lives and works in Los Gatos - she seemed to think that agents who work in one town only work in that town.

Some home owners have the same mis-perception that agents only work a very tiny region, such as just Los Gatos or just Saratoga.
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Home sellers want to get as much as possible for their homes. Home buyers want to get their homes for the least amount possible.  “Market value” is when buyers and sellers agree - even if one of them is a little reluctant. This is true universally, whether you’re in the market in San Jose, Saratoga, Los Gatos or anywhere in Silicon Valley (and just as true elsewhere in California or elsewhere in the world).

Real estate agents don’t control the value of the home. However, good agents can maximize the potential of the market. Homes are never worth just one set price. There’s usually a range within which terms (or conditions) can move the value up or down. It’s “price and terms”.

For instance, let’s say you have an upscale home that’s worth about 1.5 million, more or less. If an offer were to come in contingent upon the sale of another home, in a normal or balanced market, the seller would probably want more than the 1.5 because of the uncertainty. Perhaps that home would sell, if contingent, for 1.6 million (only for illustration). On the other hand, if an all-cash buyer showed up, could close in 5 days (I have seen it happen) and allowed a free rentback for a month, the home might sell for closer to 1.4 million - if the seller really needed a fast close to prevent foreclosure or to secure the deal on another home. It’s always about price and terms.

Want a good deal on price? Sweeten the terms.

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 If you are contemplating selling one home and buying another in the same general area, it may be that you need more space - or it may be that you simply want a home that’s updated and you’re not sure you want to experience, first-hand, the joys of remodeling.

Not too long ago, I stumbled upon a website to help folks work through this question:  www.RemodelOrMove.com.

Have a look. I think it’s pretty unbiased information that can help with this angle of the “move up” question.