Which is better: buying or selling a home in “fixer upper” condition, or aiming at “turnkey”?   In Silicon Valley today we are experiencing a shortage of good inventory. Home sellers may be tempted to market their home without preparing it well.  Buyers may feel that they will get a better deal if they purchase something that needs some work. What is really in your best interests?

Silicon Valley home buyers decide: bargain price and do the work, or turnkey and pay a premium?

Often it’s not a black and white choice of extremes between a “total fixer” and a “completely remodeled” home, but often there’s a basic stance that Silicon Valley home buyers must take: am I searching for turnkey or something that needs work? And if it needs work, how much am I willing to do?

A deep discount will be had on properties which are “all original”.  The question, though, is whether or not it will be worth the effort and cost to go through the trouble of extensive repairs and thorough remodeling.  Often the biggest projects are more profitably taken over by contractors – and even then it may not be profitable in the long run. Last summer I sold an original condition home to a contractor who remodeled and sold it.  The contractor did a lot of remodeling and sold the property a few months later for about 18% more than he paid for it.  When you consider the costs of buying and selling (8-10%), the cost of the remodeling (probably another 8-10% of the purchase price if you include the value of his labor), I’m not sure he really make much money.  For his sake I hope so.  For consumers, though, not contractors, it’s even harder to break even with huge remodels if you want to sell anytime soon.  What you do, do for the long run and for yourself – not because it will make you money!

At the same time, buyers need to be careful of homes which have been flipped by investors for a quick profit: they may have simply done the most visible work, leaving undone items which still need addressing, such as pipes, foundations, or structural items.

A few questions to ask yourself if you want to do a massive remodeling job (and buy a fixer upper):

• Do I have the time to oversee the work?
• Am I knowledgeable about construction? Or do I have time to research and learn prior to doing it?
• Can I do what I need and still put aside an allowance of 20% for non budgeted surprises?

For most buyers, changing paint, carpet, windows, appliances or counter tops is a big enough assignment. Rearranging floor plans and expanding a house is going to be too much work, cost, liability and stress for most.

Repair and staging advice for Silicon Valley home sellers

For most people who are selling Silicon Valley real estate, the house, townhouse or condo they are about to put on the market is the single largest asset they own. For this reason, maximizing the return on investment is extremely important. Most sellers avow that they want top dollar for their home.  Many, in the next breath, say “I want to sell As Is and I don’t want to fix anything.” Those two, unfortunately, are mutually exclusive.

To get the best price for your property, it needs to be the most attractive to potential buyers for the money (even in a seller’s market).  Often that means not just making the home attractive, with things like fresh carpet and paint (if needed), but worry free.  First time home buyers are especially prone to worrying: worrying about hidden costs, how difficult it will be to fix problems, whether issues will come back once addressed, etc.   A great example of this is water damage.  If a bathroom has water damage, and the seller wants to sell the house As Is, the buyers will be concerned, naturally, that if they complete the sale without a pest clearance they will later find that the entire bathroom needs to be remodeled due to the previously unknown extent of the problem.

One of the most important things that sellers want to understand about home buyers is this: worried buyers pay much less for their homes than do confident buyers.   For this reason, it is often best to get presale inspections and possibly have work done before a buyer ever crosses the threshold.  A super clean, well presented home (appropriately priced) will attract buyers who are confident and in turn will pay more for the home.

For more reading on this topic, please also see these related articles:

Preparing Your Silicon Valley Home to Sell: What Will It Cost?

Should You Repair & Update Your Home to Sell? Or Sell “As Is”?

Preparing Your Silicon Valley Home to Sell and Return on Investment

Want more personalized advice? Call me for a no pressure, no obligation consultation:
Mary Pope-Handy
408 204-7673

Silicon Valley home buyers (and sellers) are faced with a myriad of questions and choices when completing or reviewing residential real estate contracts to purchase the property.  One of them, early on, is whether or not a particular day is chosen for closing escrow or if instead it’s a number of days from contract formation (acceptance) to closing.

Which is better?

The are pros and cons to each approach, of course.  Many buyers want to be able to plan, without any ambiguity, when they will move in to their new home.  (For some this can be a matter of feng shui, astrology or a sense that some days are more fortuitous than others.)  This can work if negotiations are not protracted.

With distressed sales, though – bank owned properties (REOs) and short sales – and sometimes with multiple offers, the negotiations time frame can be hard to predict and if you pick one particular date, you may well have to change it later or find that you don’t really have enough time because a week or more gotten “eaten up” with counter offers, waiting for a bank or seller to respond or other delays. In those cases you may want to have the flexibility of writing in the length of escrow (number of days) rather than picking a certain date.

As always, talk with your professional real estate licensee for guidance as each case may be different.

For several years, we’ve seen declining residential real estate prices in much of Silicon Valley.  In many areas, though, prices are now either flat or bouncing up and down within a small range such that the probable buyer’s value or market value is very close to where it was a year or two ago.  Today’s San Jose Mercury News reports

“In a report to be released Monday, Clear Capital, a real estate valuations company in Truckee, predicts that prices will remain almost flat this year — compared with a 4.7 percent drop in 2011 — in the San Francisco-Oakland-Fremont metropolitan area, including Contra Costa County. Silicon Valley should see a 1.6 percent increase in home prices, compared with a 2.5 percent drop last year, the company said.” (Bolding mine.)

A small, modest increase in pricing is usually healthy for home sales as it gives buyers the confidence needed to finally take the plunge. It’s immensely challenging for people to buy when they believe any product – cards, home appliances or houses – will be cheaper in a day, a week or a month.

Home sellers who have wanted to move up from a starter home to the one they hope to spend decades in have felt somewhat trapped by lack of equity in many cases.  In others, the idea of selling for less than at the peak was so upsetting that they felt terrible about moving ahead prior to a full recovery.  Most now understand that getting back to prices at the peak of the realty market in San Jose and Santa Clara County will take many years.

Some of them are tired of waiting and are electing to forget about the profit they could have had if they’d sold at the peak.  These folks have decided to make the jump now to get on with their lives, despite less equity than hoped for initially, while at least interest rates are so favorable.  (It should be added that the move-up home will now cost less also!)  This can be a very wise decision since buying a house, townhouse or condo is usually not one purchase but two: you’re buying the loan product also and the total cost of home ownership should factor in both the costs over the lifetime of the loan as well as the purchase price.

Have you been “on hold” and “waiting for prices to recover” before moving up?  It could be a long wait.  What else is on hold with it?  Better schools for your kids?  More room for visiting friends & family?  The view you’ve always wanted?

A client of mine said to me the other day, “it’s time for us to ‘bite the bullet’ and make the move“.  They know that they won’t get the price they originally wanted, but instead only what the market will bear.  They want to get on with their lives and quit waiting on the market – which is completely out of their (and my) control.

On the positive side, though, two years ago interest rates were hovering at 5% for a 30 year fixed, conforming rate loan.  Today they are at 3.91%.  The home they want to buy is 3-5% less than it would have been 2-3 years ago.  Prices are lower for selling, but the cost of buying their next place and also the cost of a loan is lower too. The math may work out very much in their favor after all.

Silicon Valley home buyers often state that they want to purchase a house, townhouse or condo which includes these attributes:

• inviting
• spacious, not cramped
• open (open floor plan)
• light, bright & airy – lots of natural sunlight inside
• has a good floor plan
• includes enough storage space
• well cared for (ideally, unless buying distressed)

In a nutshell, buyers want sunny, open, clean, uncluttered feeling spaces.

Rarely do they request cozy (implies small) or private (suggests flag lot or large hedges in the front, blocking view of the street), though most love a private back yard and some buyers really do want privacy in front as well as back (hence the great appeal to those who prefer an Eichler or other mid-century modern style house).  To get you the most money for your real estate sale, though, we don’t want to appeal to the few buyers who want one style; instead, to maximize your return we need to aim the staging at what the majority of buyers (or the most probable buyer for your property) will want.

How can you transform the home you live in to the house or condo you’re selling so that it appeals to these majority of buyers who want “sunny, open, and uncluttered” interiors and un-scary houses or homes?  Here are a few quick tips:

1. First, understand that you are moving from “your home” to a house or townhouse you’re selling – it is an item for sale and the main goal is to maximize what it will sell for. This is an attitude shift but is critical for getting you the best deal for your Silicon Valley property.
2. De-clutter: Anywhere from 1/4 to 1/2 of your belongings will probably need to go, whether to storage, to charity, to a garage sale, to a recycling plant or, all else failing, to the garbage.  A storage pod is a great help – they can take your stuff away and usually deliver it to your new place, if you are not moving too far away.  Most Americans have too much stuff in their homes. It’s fine to live that way but not so good to sell that way. (“The way you live in your home is not the way you sell it.”) Most of the “stuff” will come out of closets, hutches and cabinets but sometimes even walls need to be decluttered too. (Very smart to hire your Realtor BEFORE you do this so that you don’t get rid of the items you need the most and can get good advice on this action.)
3. Light, light and more light!  It’s so important to do everything you can to let the sunshine in from windows (pull curtains back, trim outside landscaping), have extra good interior lighting (add it if need be) and make sure that no room, hallway or area is dark.  Dark homes will truly cost you money!  Whether you need to increase the wattage of your light bulb or add a sun tunnel or two, look at every area of your house or home critically to see if it’s sunny and bright. If not, fix it!
4. Clean and scrub til it’s all shiny, including places where you never really look, like the sliding glass door or window tracks. Dirty homes cause buyers to worry about what is neglected, and worried buyers pay far less for homes.
5. Fix whatever doesn’t work well or is broken. Noisy fan – but it works? It’s usually inexpensive to replace it, so do! Loud fans and small things amiss tell buyers that you are deferring repairs, and they will wonder what else you’re not fixing that they’ll get stuck with, or worse, surprised with! That worry translates into lower offer prices.
6. Do pre-sale inspections. Confident, happy buyers write stronger, higher priced offers and back out of the deal far less often! Their happiness is contagious – you will sell for more and be happy too!
7. Offer and pay for a home warranty for the buyer. The buyers will feel better about paying top dollar when some fear is removed about expenses the first year after closing.
8. Don’t be there during showings. Buyers think it’s creepy if you’re there (sorry, but true) – they cannot talk freely and feel rushed to quit imposing and get out of your house. Plan to be gone!

If you hire a great Realtor to help you with pricing, marketing and negotiating your San Jose or Santa Clara County home for sale, you will have good help in making your property appeal to the largest pool of buyers and thus sell for more. Agents are not all alike, so hire carefully!

I’d love to be your first choice, so please call me, Mary Pope-Handy, for a no pressure, no obligation consultation on selling your home in Los Gatos, Saratoga, Campbell, San Jose are nearby: 408 204-7673 or email me at mary (at) popehandy (dot) com.

Real estate referral fees are often mysterious to folks who are buying and selling homes (whether in Silicon Valley or anywhere else), and there are a lot of misconceptions about them. So I’m going to explain what they are, who can get them,  how it works, and what to “beware of” with them.

What they are: referral fees are a broker-to-broker (agent to agent) payment of money for business that one agent refers to another. For instance, if my friend, a real estate licensee, asks me to help her friend or relative to sell a home in Los Gatos, Saratoga, or San Jose (let’s say she’s in LA), I will pay her a percentage of the sales price (or possibly a fixed dollar amount) because she referred me the business. The amount varies, just like commissions do, but 25% is pretty common. When I was at Windermere, 20% was most common. When I was at Intero, there was no set fee but some agents required 30%. Some relocation firms demand 35% or more….

Relocation companies also vary among themselves in how this works, but basically they charge the agent a fairly high fee (40 – 50% is not unheard of, sometimes more – and the agent’s company often also reduces the “split” between the agent and the company) so that the buyer or seller’s move is underwritten somewhat by the commission dollars. The agent makes a lot less than usual on this deal, but hopefully the client will be happy and refer the agent to others (who will not have a referral fee attached to them).

What about Costco, USAA or others? To work a “referral” deal, they have to be licensed by the department of real estate in the places where they are referring business. Let’s say a big company wants in on this lucrative market. They get a license and offer to “feed” potential clients to hungry agents and in turn charge a set amount, such as 30%, as a “referral fee”. The big company, in turn, tells the potential buyer or seller, “find your agent through us and we’ll get you a rebate (kickback) of XX% or XX dollars!”  So maybe the agent is charged 30% to “find” a client and the client gets 20% back. Guess who gets the rest? Yup, the big company.

A couple of years ago, I had a potential client for buying a Los Gatos home, who’d found an agent through Costco once before, DEMAND a kickback or rebate of my commission when or if she bought a house through me. I told her that I don’t do that (no one referred her to me – she found me because of my Silicon Valley home sellers book and other connections, not because someone else “sold” her to me as a lead). I didn’t mind that she asked, but she got quite huffy about it when I tried explaining how referral fees work, and I realized that this woman just wanted a portion of my income and with her really bad attitude, I didn’t want to work with her.  There are a lot of nice folks buying & selling homes in the San Jose area, so I was OK letting her go.

There are lots of licensed middlemen like House Values, HomeGain and others who likewise collect leads and basically sell them to agents for a fee, whether a percentage at closing or a “per lead” cost. Again, they aggregate “leads” (people inquiring about selling or buying a home), pass the leads to local, San Jose area real estate agents and charge them for the leads, either per each lead, per territory each month, or at a successful closing. So what you may not realize, as a consumer, is that if you get an agent through one of these portals, that agent is probably paying a hefty fee for the pleasure of meeting you. (So if you were hoping for a discounted commission, it will be difficult for the agent to do that.) Also to be noted: many of the contracts between agent and aggregator prohibit them from telling you how much they must pay the referring company. This is particularly true among relocation companies.

As a consumer, is a referred real estate agent better for you or not?

Let’s dig a little deeper:

Are you better off with an agent you get by referral from another licensee or company than you are finding one yourself?  Some buyers and sellers are very cynical and suspicious of referred agents because they know that the referring agent or company is getting paid.  To see if it’s really in your best interest, we need to view the referral types distinctly from one another.

1. Agent to agent referrals

Often agent to agent referrals are excellent because the referring agent hand picks the individual that he or she feels will be your best match.  The agent who gets the referral is normally very grateful for the opportunity and will work hard for you both because he or she wants your repeat business and referrals, but also because of the hope for more future business from the referring agent.  Conversely, the agent who gets the referred business knows that if he or she screws up, there will be lost opportunities on both fronts.

When I make agent to agent referrals, I take it very seriously and do research before deciding not only who’s most knowledgeable but also who I trust to be honest, hardworking and diligent while assisting the client.  A bad referral reflects poorly on me, too, so not only will I make the original introduction, but I’ll check back to make sure all stays on track and that my clients are taken care of from start to finish.

Agent to agent referrals are usually not at a high cost.  Sometimes they are made at a really low cost to the receiving salesperson, and occasionally at no cost at all.  Don’t assume that if your current agent is referring you to someone else that there’s a big payoff happening.  Of all referral categories, in my experience, these are the most trustworthy and are often head & shoulders above picking someone you don’t know (and might not know how to glean on your own).

2. Relocation referrals

Many times, when a company relocates its employees there is a benefits package which requires that you work with a real estate licensee or brokerage which is assigned to you.  Because relo referral fees are so high (50% in many cases), the best agents – the successful ones – won’t do it.  Why work so hard for half the pay?

Sometimes, though, the fees aren’t so high.  And sometimes you may be able to work with anyone you want (and get your benefits if the agent agrees to the fee).  In some cases, there is no fee from the agent at all.  They’re not all alike.

Relo benefits are hugely helpful in making a move, both for assistance on the practical items but also for the cash assistance which is very often involved.  Best if you can find out upfront, before you even start surfing the web about your future home, what the rules of engagement are so that your relocation is as smooth as possible. (Your agent will thank you for it too.)

3. Lead aggregaters

The final category is that of lead aggregaters. These companies have websites which are designed to “capture leads” – that is, you and your contact information – so that they can sell them off to hungry agents who “buy leads”.  Sometimes the cost by the agent or Realtor is per lead, other times it’s a referral fee if a transaction closes, sometimes it’s a monthly fee – or some combination of all three.

Even within this category there are better and worse companies which provide more or less help to the consumer.  Some home buyers will want to use these companies or sites because of a promised rebate or lower selling commission. Just remember that as with other cases discussed above, the more of a discount there is from the agent, very likely the lower the quality of the agent since the best agents don’t have to work for pennies on the dollar – and they won’t.

In order to work for a really low amount of pay, to make a decent living these same agents absolutely must increase their volume and lower what is offered to their customers or clients in terms of time and attention.  This may not be true on every transaction but over time, it will happen because there’s not nearly the profit margin built into the traditional model that the public might think (there’s a lot of hidden work in the real estate business which isn’t obvious to those outside of the industry).

Referrals are very helpful for agents looking to grow their business, whether by relocation companies or via an agent network. If you want to make some money in real estate yourself, get your license and network like mad. You can make a decent amount of money and never have to actually sell a house yourself!

This article originally published by Mary Pope-Handy for this blog in 2008; updated & expanded in 2011.

Whether you’re preparing to sell a home or are in contract to purchase real estate in Silicon Valley, you likely will be faced with the prospect of hiring professionals to inspect your home. This can run hundreds of dollars, a thousand dollars or more. The potential liability, though, could be much higher than the cost of paying the professionals to inspect your home, so you’ll want to hire very carefully.

So, what must you know when selecting inspectors in the San Jose & Santa Clara County area?

First, there are different types of inspectors:

There are inspectors who focus on particular elements of the property, examples being termite or pest inspectors, chimney and masonry inspectors, foundation & drainage engineers, pool inspectors, heating & air conditioning inspectors and more. Generally, these are all licensed by the state of California, and they may perform repairs on the items they find in need of repair.  The two go together – licensing and being allowed to do repairs.

But this is not true for property or home inspectors. There is no license for doing house or condo or townhouse inspections in this state. Is that good or bad? Part of that package is that they can’t do repairs on problems they find. You can see why it’s good to separate finding problems from being paid to fix them. That’s the plus.  There is another side, though.

Finding the Right Home Inspector

The down side to this is that in the San Francisco Bay Area  or anywhere in California, anyone can call herself a home inspector. As with many aspects of real estate, just because it’s legal doesn’t mean it’s ideal.

There are two trade associations or groups (voluntary) for inspectors in California, both of which uphold a high standard of practice. One is CREIA, a state organization, the California Real Estate Inspection Association.

The other is ASHI, the American Society of Home Inspectors, a national group with exceedingly high standards (and two levels of membership, ASHI inspectors and “associates” who are on their way to being ASHI inspectors). ASHI inspectors have a higher standard of practice, are extremely experienced and keep current on the latest practices to provide consumers with the best information available.

My impression is that ASHI is a higher standard than CREIA, but either one would be a minimum pre-requesite for most realty agents.

What else should you be concerned with, as a consumer faced with hiring a home inspector?

• What is the inspector’s scope of the inspection? Usually, it’s limited to the visible areas – but check – it may vary from one inspector to the next. For instance, are sprinklers or fences included, or just items within the walls of the home? Ask. Obviousy, the inspector cannot see between the walls or inside the concrete of the foundation. All inspections are limited. Some inspectors limit a lot!
  
• What is the inspector’s insurance coverage? Ask about malpractice or “errors and ommissions” insurance. Some will limit liability to the cost of the inspection. Others will limit it to $1,000. Inspectors make mistakes, just like the rest of us. What happens if your inspector misses a $5,000 item? Ask.
• How high-tech is your inspector? Does he or she take digital photos to show you the areas you cannot easily see, such as under the house or in the attic? Does the inspector use a moisture meter or other devices to help detect issues that aren’t easily seen?
• How easy is the inspection to read? How comprehensive is it? Some inspectors will not just tell you how things look today, but what the anticipated lifespan is for that item (such as how much longer the roof will last). This can be enormously helpful information to have, but many inspectors don’t include it.
• How quickly will you get your report after the inspection? In real estate transactions, “time is of the essence”. Getting an inspection within 24 hours can be a big plus!

Finally, how do you choose an inspector if you’ve got several names of ASHI or CREIA inspectors who all seem to be knowledgeable, experienced, communicative, and so on? As with many other aspects of real estate, referrals can be invaluable. Ask successful Silicon Valley Realtors whom they use. Ideally, you want to find the inspector that agents say they hire “for everyone”, both buyers and sellers alike. Those are the inspectors that ought to be fair and honest, who don’t miss anything important but who also don’t create panic. Good inspectors can convey why something’s a problem, how it might be addressed, and put everything in context too.

It should be added that some of the other inspectors, those who are licensed to inspect roofs or chimneys or other elements of the home, may work on commission. Ask about this; clearly it’s a conflict of neutrality if the guy looking at your roof is paid more to find more that’s wrong! And again, ask successful, experienced agents for names of reputable inspectors in any of these industries.

Related topics for further reading:

What to consider when buying a hillside home in Silicon Valley

What happens when inspectors disagree about the property?

This house was ‘termited’ four years ago. Do we need to do it again?

Would you recognize signs of subterranean termites if you saw them?

What is fumigation prep work?

Watch for dampwood termites in Silicon Valley!

If a house or other building is going to be fumigated or tented for termites (or other pests), certain things must be done for the tent to go on and to effectively seal the structure.  We call that “fume prep” work or “fumigation prep” work. It is sometimes included in the cost of the fumigation, and sometimes not – so if this work is being done at your property, be sure to ask if it’s part of the bid!  If it’s not included, there are companies that can be hired to do these jobs if you do not want to or cannot do them yourself. (If you need one in Silicon Valley, please email me and I can give you a name or two.)

Anything which obstructs being able to enclose the home or building must be cut back, disconnected or removed.  For instance:

• fences or gates which touch the building must have a few slats or sections removed so the tent can be placed next to the house
• bushes, hedges, trees and other plants which are adjacent to the house must be trimmed back or pulled away as much as possible – at least 12″ from the structure (if trees are touching it, they must be trimmed)
• any other structure such as a trellis or deck must either be included with the fumigation or separated from the house so that a tent can go between it and the house
• downspouts connected to French drains must be disconnected at the ground
• loose gravel, tanbark or mulch needs to be raked back or removed at least 12″
• any stored items up against the building must be removed

Other items which make it hard for the fumigation to happen need to be removed, such as an aerial or antenna on the roof or an awning on the side of the home., a chimney cap, or weather vane.  Solar panels must be drained.

When everything else is done, it’s important to soak the soil around the building (the perimeter) so that it’s really wet going down about 4″ and out from the house or other building about 12″.  The damp soil helps to create a seal so that the fume is effective.

Please note, this list may not include everything required for your specific building!  Your fumigation contractor should provide you a comprehensive list both of what is needed for the fume prep and also what is needed inside the home (food removal, for instance), by way of utilities, accessibility & keys etc..  There’s a lot of paperwork that you will be asked to sign when you hire a fumigator, but don’t just skim and sign: read and make sure you understand everything so that there are no surprises!

Related reading:

Choosing a home inspector in Silicon Valley

How often should you get a termite inspection?

Choosing a termite company (on my Live in Los Gatos blog)

Both buyers and sellers in Silicon Valley find themselves having to compromise in order to purchase or sell homes in today’s market. In a red hot seller’s market, the buyer usually makes most of the concessions. In a deep buyer’s market, that can be said of the sellers. Right now, though, it is fairly balanced in the sense that homes are selling fast – but only if they are priced aggressively. In some areas, such as the Cambrian Park area of San Jose, prices continue to inch downward.  Sellers often feel as though they are compromising left and right before they even get their property on the market! What kind of compromises might you expect when buying or selling a home in Santa Clara County now?

Silicon Valley Home Seller Compromises

Most sellers want to sell for full price and to not have to do any repairs – that is, they want to sell “As Is”.  Unless they get multiple offers, though, often that’s not the case.  Often sellers must compromise on both price and terms, and may find themselves providing a pest clearance or do other repairs in order for the property to sell.  In some cases, though, the compromises are larger still: they may need to pay points for the buyer’s loan, provide credits, re-roof or do other work to make the transaction work. A suggestion for most sellers is to do pre-sale inspections. One of my clients this last year objected, asking why they needed to spend money (the cost of the inspections) to find out that they needed to spend money (the cost of the repairs)?  But in truth, by doing this, the seller can take care of some items up front, create a more secure feeling for the buyers and then maximize the sales price in most cases. It is a compromise, though, to do these inspections upfront. That said, it’s a worthwhile one because normally it will net the sellers more money in the end! A word to the wise: selling As Is often means not getting top dollar for the property (most sellers want Top Dollar with NO WORK – it doesn’t work that way).  To get the most money out of the sale, usually a hoe owner will need to make the property worry proof: do repairs upfront, before a buyer ever even sees it.

Silicon Valley Home Buyer Compromises

Most San Jose area home buyers want to purchase a home for 10-20% less than what the sellers think it’s worth.  The main compromise is on price!  It’s sticker shock every time, but especially for real estate purchasers who are coming from out of the area. Additionally, buyers tend to want homes in turnkey, perfect condition.  That is, they don’t want issues with permits, repairs, health and safety hazards, termites, and so on. They want to move in and “not have to worry” for a few years. So moving from this position to a purchase where they take on some responsibility for repairs or updating is a major concession or compromise right there. A word to the wise for buyers: demanding every little repair and home perfection will not usually work UNLESS you pay “top dollar” for a property. If you want the best price, be prepared to take on some of the responsibility upfront. For buyers and sellers to agree on price and terms it’s going to involve compromises on both sides. With proper planning, though, these compromises will result in a win-win for all.

Homes which are dark inside, or which feel dark to potential buyers, are much more difficult to sell, and virtually always sell for less money than those which are perceived as “light, bright and airy”.  While a property’s owner might love the cozy feeling of dark paneling, deep overhangs and low lighting, it’s not what most buyers want today.  To maximize the amount a house, condo or townhouse in Silicon Valley will sell for, it’s imperative to make it as attractive to buyers as possible.  In many cases, that means it needs to be lightened and brightened to sell for top dollar.

How can a home owner make a house or home be – or seem – more bright?  One of the biggest “offenders” in this area involves windows! Here are a few window-related problems that can make a home feel significantly darker than necessary, together with some potential solutions:

• an interior room with no windows (seen with additions sometimes) or dark hallway

**consider adding a sun tunnel or skylight (as well as ceiling & other lights)

• tinted windows

**remove film, if applicable, or replace with non-tinted windows

• curtains/blinds which obstruct part of the window

**pull back so that 100%, or close to it, of window is visible

• shrubs, and trees covering some of the window

**trim back so the window’s glass panes are 100% visible, if at all possible, to let maximum light in

• deep roof overhang which prevents sunlight from directly entering the home for much of the day

**look into adding skylights over the porch – keep the overhang but allow more light in!

Once you’ve done as much as possible to allow the maximum amount of natural light into the home through the windows, it’s time to tackle other areas where light is either absent, minimal, or otherwise obstructed.

• heavily landscaped yards, especially with many thick, deep trees and/or hillside adjacent

**being close to a hill will cut down on light and can’t be mitigated, but a heavy canopy of shade from thick, tall trees can be addressed with trimming and thinning (possibly topping) the trees. Don’t remove or severely trim – many areas have laws against damaging trees or removing larger ones so check before you do anything.

• lack of ceiling lights inside: many houses lack high lighting and instead rely upon lamps at the coffee table level.  These will not be able to make a room as bright as lights on the ceiling or high on the wall (sconces)

**Adding recessed or other lighting up high can make a huge difference in the amount of light there.

• dark floor coverings and wall coverings – these don’t make a room darker per se but they make buyers feel that the room is heavy and dark

**best to remove dark paneling, wallpaper and carpet and substitute lighter colors instead to create the “light, bright and airy” feeling that buyers strongly prefer

Every home is unique, so hire a great Realtor who can assist you in making your Silicon Valley home as appealing as possible to the largest numbers of buyers so that you can get the best deal when selling your home.

More home selling tips & information

Home sellers: beware over improving your property when preparing to sell

Selling your home in rainy weather

Home selling tips (ValleyOfHeartsDelight.com site)

Free reports about selling (popehandy.com site)

Those of us who sell real estate for a living know that consumers want to hear back from us as soon as possible when they call or email (or text, in some cases).  What’s a realistic turnaround time for the response?

If not with clients or otherwise tied up, many Realtors (yours truly included) will pick up the phone when called during business hours. (Some won’t. Some do time blocking and return calls at set times, such as between 11am and noon and 4 and 5pm. Those who time block in this way will often put a message on their voice mail explaining when they will call back. Hopefully, that works for the caller!)    In general, Realtors and real estate sales people will not take calls or return phone calls while they are with other clients unless there is a really crucial event happening – and if that’s the case, they’ll let the folks they’re with know about it upfront.  Depending on how long the appointment is, then, the return call could be an hour or two or, in the extreme, at the very end of the day (if with relocating clients and doing a crash course in the area that goes 8 hours – it can happen, but is exhausting for all).

Once in awhile, a voice mail or text simply won’t be delivered by the wireless carrier in a timely manner. This is extremely embarassing and upsetting to everyone impacted by it.  So please keep in mind that it’s always possible that your message simply wasn’t delivered.

If something big is going on, check in ahead of time with your Realtor

If there is some momentous event or report looming, talk to your buyer’s or seller’s agent ahead of time to learn his or her schedule and availability.  This is key for reducing everyone’s stress!

Agents do sometimes take time off, too. Communicate with yours to know when he or she is off, and do your best to respect that time. Real estate licensees who get too burned out are less effective in the long run.

In my practice, often I can call back within a few minutes if I am simply on the other line when I miss a call. Most of the time, my appointments (listing or showing homes) last only about 2 hours, so I can get back to callers within 2-3 hours 95% of the time.  On very rare occassions, I’ll have a marathon appointment and be tied up all day.

If your agent is really busy – and we all get at least some spells like this - know that he or she will probably call you back within a couple of hours. If you don’t get a response and it’s some sort of emergency, try texting (many agents now communicate that way – I do) but know that you are probably interrupting so it may not be possible for your agent to call you back immediately.

It’s all about expectations: if you know your agent’s availability, it won’t be frustrating for you or her/him if there’s a small amount of phone tag.

Finally, I should add that the best agents are not available 100% of the time!  This week I learned that in Santa Clara County, 78% Of the agents have sold either no homes or only 1 home this year.  Those agents may be more available – but they may not be the best agent you could hire.  When hiring an agent, do find out how busy he or she is generally. You’ll all be happier to establish realistic expectations upfront.

Should you market your home for sale through the holidays?  It’s now mid November, and if your property has been listed for sale but not gotten an acceptable purchase offer, you may be thinking of taking your house or condo off the market until sometime in the new year. Is that a good idea?  Below, please find some considerations for you as you decide what to do. We’ll

Pricing: will the home sell for more now, or in the new year or spring?

No one can tell you whether prices will be better or worse in the first quarter of 2012 than they are now.  I just returned from the annual conference for the National Association of Realtors (of which I am a member), and quite honestly, I got conflicting information.  Some reports indicate that prices will be lower in the spring, others that they will be higher – or interest rates may be higher, which puts pressure on pricing since affordability is strained when that happens.   Pricing is local, though – so no matter what’s happening nationwide, it could be different in Silicon Valley, in Almaden, Cambrian, or Los Gatos, or in your subdivision or school area.  But bottom line: we really don’t know what pricing will do, we only know the probable buyer’s value – a range of likely sales prices – right now.

Being disturbed during the holidays

Many home owners really don’t want a lot of traffic coming through the home from Thanksgiving through the New Year due to visiting relatives, events planned such as parties at the home, the presence of gifts and concerns over theft, etc.  They may also be worried about rainy weather and carpets getting soiled.

At the same time, though, during the holidays many of us make our homes warm, bright and inviting, particularly if we decorate for Christmas, Thanksgiving, Hanukkah, etc.  Even the smells can do wonders: gingerbread cookies, Christmas trees, hot mulled wine…. With family and friends coming to visit, we tend to “deck the halls” and make our houses really feel like homes.  For many condos, townhouses and houses, during the holidays these homes really show at their best.

The potential to sell a home in December is actually a lot higher both because of the decor and ambiance, but also because so much of the competition is withdrawn from the market.  The odds shift much more in your favor if you keep your home on the market!

Market the home – but differently!

A great solution is to continue to market the home for sale, but to do it differently:

• remove the for sale sign & outside flyer box
• remove the lock box, showings by appointment only (by agent or seller)
• remove the seller’s phone number from the MLS – all appointments will be by appointment only
• flyer stand, disclosure binder and other marketing materials out of sight
• keep home listed for sale on MLSListings.com but more restricted hours

This sort of marketing will result in fewer showings but showings of more qualified, more motivated buyers.  It will be less intrusive to you and everyone in your household too.

Home sellers in Silicon Valley today worry about things they never had to worry about10 years ago, many of which they have little control over.  Like what? Much of it has to do with online or web marketing via websites, blogs, web portals and social media sites.   Here are a few:

• County records on properties are now public and available online almost everywhere, including permit records, info on the structure and lot size, etc.  If the public or county records are incorrect, buyers still use them – so wrong info on home size, bedrooms, baths etc. can hurt market value, as can incomplete or missing permit files online with the city, town or county.
• If the Google street view of the property happened on a bad day (say, the neighbors were having some sort of RV get together and the street was jammed with trucks and motorhomes or the yard happened to be in disarray), it can kill viewings.  Buyers and agents may skip that house all together if the “street view” makes it look bad.
• Some websites that display the information on listed homes permit consumers to blog or comment about the home.  Consumer comments online  can be devastating if the remarks aren’t good!
• If homes need good “social media exposure” to sell for top dollar, how can home owners know what constitutes good social media marketing – especially if I’m not on Twitter, Facebook, YouTube, LinkedIn or any of those popular sites? (Do I need to be on every site?)
• Syndicated errors: If a home’s marketing is incorrect on the MLS but corrected later, will all of the sites it was syndicated to get the correction, or will the info stay wrong and cause us harm in marketing the house or condo?

What can consumers do? To begin with, it would be wise to hire someone web-savvy, someone who knows the ropes with internet marketing at a minimum, to help you to navigate these waters. Additionally, it would be smart to work with someone who’s very strongly proactive, who can ferret out errors and work to correct them.  Understand that even the web-savvy agent cannot fix all problems, but at least they’ll have a head start on understanding what it takes to address them!

Shameless plug: This is work I often do. I can’t guarantee results as I have no control over the county records or syndication, but I have had good success in this arena and am also well known for successes with social media!

Related reading:

How important are permits and finals?

Building Permits Are Online and Easy to View in San Jose

Monte Sereno building permit nightmare

Selling your Silicon Valley home? The common wisdom is to interview at least 3-4 real estate agents, ideally from as many brokerages,  before selecting one to work with you on the listing, marketing, sale and escrow of your home.  Many Silicon Valley home sellers don’t do that, though – in fact about half hire the first person they speak with – for better or worse.

But let’s say you’re doing your “due diligence”  and have interviewed a few agents.   How do you dismiss the ones you aren’t hiring?  Today I want to present a few thoughts and ideas on this for you, and I’ll keep it brief.

1. On the off-chance that your property doesn’t sell with the agent you are now selecting, you want to keep the door open for future business with the other agents whom  you’re not hiring now.  In other words, if the agent you hire today ends up being a dud, you do want to be on good enough terms that you can go back to one of the agents you’re rejecting today to hire later. So # 1, be polite and friendly with every agent, even the ones you aren’t going to employ.
2. Additionally, many of the agents you are now dismissing may later have a buyer who’s perfect for your home later. So again, be polite and friendly with every agent.
3. Please remember that for Realtors and other real estate professionals, each listing presentation or buyer presentation is really a job interview.  Just as you would be waiting anxiously to hear back if you’re going to be hired for a position, so do they wait for news to learn if they are employed or not!
4. It is important for agents to know what you’ve decided, even if they don’t get the job.  If they’ve done a good job, but you’re selecting someone else anyway, do tell them that you appreciate their hard work but are hiring someone else at this time. Sometimes it is really difficult to choose whom to hire if you meet a few stellar agents.   The worst thing is for them to not hear back from you at all, or led to believe that you’re going to hire them, only to have someone else’s sign show up in the front yard.  Almost every agent I know has had this happen and it’s one of the low points of being in real estate when it does happen.

Agents often spend many hours preparing to meet with potential seller clients, studying the market, pulling comps, and gathering presentation materials as well as listing papers, most likely, in case you want to sign with them when they arrive. (One of the worst things an agent can do is to show up at a listing presentation and not be prepared to sign a listing if the clients want to do so – and that does happen at times!) Whether you decide to hire them or not, it’s best for them – and for you – to communicate nicely and clearly what your decision is.

Related Reading:

What do Silicon Valley Real Estate Agents Do?

Selling Your Home in Silicon Valley

What happens if your home does not sell within a few months and you take it off the market? If your property status is changed to a cancelled, expired or withdrawn listing, it may be viewed by real estate agents as their potential business, and you may begin to hear from them  – a lot!

What is the difference between expired, cancelled and withdrawn listings?

Let us begin by discussing the difference between cancelled, expired, and withdrawn listings and how each impacts your vulnerability to being swamped with messages from real estate agents.

1. A withdrawn listing means that the property is still listed for sale with a real estate agent or broker but is no longer listed on the multiple listing service (MLS).  It’s still a valid listing and other agents should not approach you about working with them since you are still in a contract to sell your home with your current agent.
2. An expired listing means that the contract for your listing has come to an end and the listing is no longer in place.  Other agents may approach you since there is no valid listing in place.
3. A cancelled listing is one in which the seller and agent or broker agree to terminate the listing. Since the listing has ended, other agents are free to contact you.

In a nutshell, if your Silicon Valley home’s listing becomes either cancelled or expired, real estate sales people may contact you, but if it is merely withdrawn, they are not supposed to reach out to you because you still have a valid listing in place.

My agent removed my phone number before changing the status, but agents still call. What gives?

If you and your agent terminate the listing on good terms, and perhaps even if that isn’t the case, he or she will likely do you the courtesy of removing your phone number to cut down on the barrage of phone calls you will get from agents “working the expireds“, as it’s called.  This helps, but many salespeople routinely download listing information from our MLS so that they have the old info in case anything helpful to them is removed – such as your phone number.  Unfortunately, if your number is ever listed, it’s likely that someone may have it and try to contact you later if your home does not sell.

It’s not just phone calls when your property goes off market

Many of the agents who are “working expired listings” won’t just phone you, but will mail you stuff or even drop by in person (dropping by is called a “pop by” in Realtor circles).  It is unlikely that any of them will have your email address, though, so there’s a small silver lining!

How long does all of this last?

Usually the worst of it is the first week or two and then it begins to taper.   Some sales people, though, only begin at 2 weeks because they want to miss the avalanche of activity (and your likely irritation at it).  Of those late bloomers, some will literally mail you or phone you only once.  Most realty professionals who regularly list previously expired listings and make that a significant portion of their business plan will attempt to reach you many, many times over a month or two, maybe longer.

Drip campaigns and off market homes

The agents who seriously focus on getting the expired or cancelled listing business will most likely try to connect with you by doing all three: phoning, mailing goods (or drop them off or have them delivered) and also stop by.  Real estate trainers teach them that most prospects say “no” four or five times before they say “yes”, so for these highly determined business people, each no means that they should be closer to a yes.

At what point do they quit?  Perhaps after 6 – 8 attempts over a 4 – 8 week time frame.  They will have a marketing plan that includes drip mailing programs, calls and visits in the hopes that their persistence will indicate to you their overall professional determination.  (“If he’s working this hard to list my house, he’ll probably work just as hard to sell it” is the message they hope to convey.)

How can I make the calls, mail and visits from all of these agents stop?

The clearest cut way to make them stop is to list your property for sale (either with your previous agent or a new one of your choosing).  Agents absolutely cannot (should not) contact you if your home is listed for sale with another broker or agent.  Along these lines, rather than have your listing expire or be cancelled, you can make the status “withdrawn” instead – leaving it listed but currently unavailable and not on the multiple listing.

Short of having it listed, you can simply let all calls roll to voice mail and delete them once you know it’s an agent calling; you can leave a message on your VM that you don’t want any agent contacts also.  You can keep a log of everyone who contacts you, and how, and ask each one to not do it again.  They are supposed to respect your wishes if you ask them to not call, drop by or mail you things.  (You can not answer your door and leave a note up that you do not want to be contacted by any real estate sales people t0o.)

Most of the time, the agents who try to get ahold of you will be polite and well intended.  They should not call before 8am or after 9pm.

Best of all, it’s temporary.  They’ll stop trying within a few weeks in 99% of the cases.

Smart, saavy Silicon Valley real estate agents won’t take just any listing.   New agents (or brokerages, for that matter) or those struggling may be less picky.  This may be confusing to home owners who find that some Realtors will agree to list the home, others won’t – so let’s discuss it a little.

Real estate licensees aren’t just people who hold open houses on weekends.  Rather, real estate agents are independent businesspeople in the business of selling real estate. Many of them work 50+ hours per week.  In order to be successful, they have to evaluate the probability of success, whether with buyers or sellers, before deciding to take on those clients.  If they agree to work with buyers who never buy or sellers who never sell, they will be out of time, out of money, and if they make this judgement mistake too often, out of business entirely.   In the last 4-5 years about 1/3 of real estate salespeople have left the industry.  Those who are surviving or thriving are very judicious about how they expend their time and resources.

Under some circumstances, home sellers may project enough “red flags” or have unreasonable expectations such that real estate agents will turn down the chance to list their home.  Here are a few things I’ve run into over the years, either personally or heard about from other agents who said no to sellers:

1. Unrealistic expection on likely sales price of the home (demanding more than the probable buyer’s value of the home)
2. Unwilling to compensate agents or brokers as they require OR expecting them to take on far more work than is to be expected in selling a property (such as overseeing the entire remodel of a house – we are not general contractors!)
3. Overly restrictive showings (too much advance notice, insisting that listing agent be present for all showings)
4. Not permitting some basic marketing or access avenues (no open house, no sign, no lockbox) or unwilling to follow sound professional advice on staging, presale inspections to make the property attractive to buyers – these are “basics”
5. Problems with showings (messy, smelly homes or sellers insist on staying home during showings, follow buyers around in the house etc.)
6. Secretiveness – when sellers won’t level with agents about their plans it sets a bad, even scary, tone that causes agents to worry about hidden risks
7. Nastiness, second guessing or micro-managing – some sellers may want to call the agent 8 or 10 times per day or desire to oversee even the smallest detail on marketing the home (see every email sent, for example).  Others can be rude or insulting.  Some constantly double check everything the agent says to verify every angle or detail and then quotes back to the agent “well another agent I know says…” which is frustrating and insulting.  Sometimes listening to others at work, who are unqualified to give real estate advice and getting that “over the cubicle wall advice”, causes home owners to not follow their agent’s advice (see # 4 above).
8. Concerns over legal problems and liability, such as a home owner with dementia selling the house rather than the adult kids or other friends or relatives getting a power of attorney to do it for the parent (I have run into this directly). If there are any mental capacity issues, it is a lawsuit waiting to happen.

Most of the time, real estate agents want to list good homes and have the opportunity to market and sell them.  If they (or I) see enough “red flags” with a seller or the property, though, it’s time to decline the opportunity.  Often times, these same houses do not sell the first time they are on the market but later become an expired, withdrawn or cancelled listing.  (Sometimes they simply take a very long time to sell as the owners adjust to market realities and begin to accept their agent’s advice.)  Sellers wonder to themselves, “why didn’t my house sell?”  The answer is often an inflated price but just as often there are other problems compunding the failed sales effort too, very frequently an unwillingness to follow professional real estate advice.

Not every home will sell.  A wise real estate sales person will not get hooked into a listing agreement where the seller isn’t as motivated to sell the property as the agent is to sell it.  This is a team effort, requiring a shared vision of what needs to happen.  Even under the best of circumstances, homes don’t always sell.  So if there are big issues from the seller or the way the home is shown, it’s a bad business decision for the real estate licensee to get tied to them – it’s too much like trying to do the job with one hand tied behind your back. Who agents and brokers work with is ultimately a business decision.  If they are turning you down for the listing contract, at the end of the day it’s a statement about your or your property’s business risk. If you are confused as to why they decline the opportunity to list your house, townhouse or condo, you can always ask them, and most likely you’ll get a helpful answer.