contract

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/

  1. 2 beds, 2 baths
    Home size: 1,223 sq ft
    Lot size: 1,663 sqft
  2. 0 beds, 0 bath
    Home size: 2,599 sq ft
    Lot size: 13,198 sqft
  3. 3 beds, 2 baths
    Home size: 1,536 sq ft
  4. 3 beds, 2 baths
    Home size: 1,339 sq ft
  5. 3 beds, 3 baths
    Home size: 1,623 sq ft
    Lot size: 5,998 sqft

See all Real estate in the city of San Jose.
(all data current as of 7/22/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

5 things yourbuyers agent can doHome buyers in Silicon Valley are getting frustrated, discouraged and disheartened as they write offer after offer, only to lose out in multiple bid situations. It’s not just the poor FHA home buyer either – this is happening to those with 20% down and more too.   Yesterday I had about a dozen and a half offers on my cute listing in Santa Teresa, and had the unhappy task of telling all but one of those Realtors that their buyers did not get the house.

What can be done to improve the odds of success?

Usually losing out is a simple case of the best price and terms winning out.  (I wrote a series of articles on how to compete in multiple offers that you can find here.)  At times, though, there’s a bit more nuance, especially if there are two or more bids which are “neck and neck” or nearly tied.  Sometimes the buyer’s agent either does or doesn’t do certain things which can impact how your real estate purchase offer is viewed by the listing agent and seller(s).  Here are 5 important things that the buyer’s Realtor or sales person can do which will help the odds of success:

  1. The agent should read the MLS printout carefully to see if there are any instructions regarding offers.  This one may seem obvious. but too many buyer’s agents just draft the offer and send it in, ignoring information that will probably be useful (such as offer deadline, preferred form – CAR or PRDS contracts, availability of disclosures, the request to call before writing the contract etc.).  Ignoring clear instructions will usually result in creating bad feelings between the parties, and lessen the odds of success.
  2. The buyer’s agent should call or email the listing agent before writing the offer (and after reading the MLS!).  Sometimes there are requirements or just preferences that won’t be known unless contact is made.  Additionally, though, the listing agent will simply want to know about the level of interest and not have any surprises – it’s a courtesy call.  If the relationship between real estate agents is improved, so are the odds of success.
  3. The agent should ask if it is possible to present the offer in person… and be willing to do it, of course.  Many seller’s agents won’t want a live presentation (most would email), however the fact that your agent is willing to spend the time and make the effort to present in person usually speaks volumes about his or her professionalism. It’s also a hint that the agent is a cut above most.  In my real estate practice, several times I beat out other offers by asking if I could meet with the listing agent and sellers to discuss my clients’ offer, and then doing it.   (With my multiple offer situation yesterday, only 3 agents requested to present to me live.  One of them had the winning contract.  Of course, the rest of the package was also super strong – but this one step is a clue to the whole offer strength and commitment.)
    Continue reading

Can you change your offerWith multiple offer situations in Silicon Valley real estate bids, sometimes buyers write an offer and later decide that it’s too much or too little, or that some other change is warranted.

Can you change your offer after it’s written, or is it a “done deal” once you’ve signed it?

The good news is that you can change your offer. Many buyers do, either because they changed their mind or strategy, or because they just got new information.

Recently some of my buyers were bidding on a San Jose home. As I asked the listing agent more questions and we got a little more information from that agent on the numbers of offers being received, my clients wanted to improve their offer. We redid page 1 of the contract, which is where all the financial basics are listed. Their improved offer went to the listing agent and it was seamless.

At other times, even after the offer is submitted, I have had buyers ask to improve their offer. The pages of the contract which were involved in the change were redone, signed and resubmitted. This is a bit like going through the counter offer process yourself. Continue reading

A year or so ago, I attended a 2 day negotiation class in Los Gatos. It was quite good! At one point, we discussed negotiating offers in a buyer’s market and how challenging it can be to get showings and offers at all. The topic of a “reverse offer” came up next.

A reverse offer is when a home seller initiates negotiations with a buyer by drafting a purchase agreement. Yes, this is backwards!  The seller may not know the buyer’s ability to pay, what type of loan it could be, or even the prospective buyer’s name! The idea is that if buyers are on the fence, this may get the ball rolling. Only seldom does it result in an immediate agreement. More often, it’s either rejected outright or countered. Or perhaps the buyer and the buyer’s agent will draft a whole new contract. But it may be a useful strategy if a property is not selling and there seems to be interest from buyers who aren’t going to the next step of putting an offer in writing.

Related reading:

What is the difference between the CAR and PRDS purchase agreements? Does it matter which contract is used?

What is a sharp offer or relative bid?

What is a blind real estate offer?

Q & A on making an offer (on my popehandy.com website)

  1. 4 beds, 3 baths
    Home size: 2,165 sq ft
    Lot size: 2,848 sqft
  2. 4 beds, 3 baths
    Home size: 2,224 sq ft
    Lot size: 3,319 sqft
  3. 4 beds, 2 baths
    Home size: 1,983 sq ft
    Lot size: 10,101 sqft
  4. 3 beds, 3 baths
    Home size: 2,057 sq ft
    Lot size: 10,375 sqft
  5. 5 beds, 5 baths
    Home size: 6,181 sq ft
    Lot size: 3.79 ac
  6. 3 beds, 3 baths
    Home size: 2,106 sq ft
    Lot size: 8,881 sqft
  7. 6 beds, 3 baths
    Home size: 2,758 sq ft
    Lot size: 7,143 sqft
  8. 3 beds, 3 baths
    Home size: 2,319 sq ft
    Lot size: 1,916 sqft
  9. 4 beds, 3 baths
    Home size: 3,014 sq ft
    Lot size: 17,755 sqft
  10. 4 beds, 3 baths
    Home size: 2,313 sq ft
    Lot size: 17,755 sqft

See all Real estate in the Los Gatos/Monte Sereno community.
(all data current as of 7/22/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Silicon Valley home sellers may find themselves exhausted by their move and wonder if they can leave trash or other debris behind when they move out.  Most of the time, San Jose area home buyers aren’t thrilled with this idea (though there are exceptions).  The main thing is this: what does the contract say?

Both the PRDS and CAR contracts do address this issue of what can be left behind.  First, here’s the CAR paragraph on this topic:

CAR on removal of debris at close of escrow

And here’s what the PRDS purchase agreement says:

PRDS on removal of debris at possession

Both of them say that debris must be removed either at the close of escrow, or if there’s a rentback, when the buyer takes possession.

That said, sometimes buyers will write into the contract that the seller is allowed to leave behind debris.  Why would they do this?  If it’s multiple offers, making the move easier on the seller may increase the odds of getting the offer accepted.  Or perhaps the buyers just really want the ‘stuff’ in the garage.  I’ve seen it happen.

Either way, if you are buying or selling a home, it’s important to read and understand your obligations and rights.  The final walk through can be an opportunity to point out debris that may be a concern, among other things.  Best to not wait until after closing, if possible, to find things for the seller to do.

  1. 2 beds, 2 baths
    Home size: 1,223 sq ft
    Lot size: 1,663 sqft
  2. 0 beds, 0 bath
    Home size: 2,599 sq ft
    Lot size: 13,198 sqft
  3. 3 beds, 2 baths
    Home size: 1,536 sq ft
  4. 3 beds, 2 baths
    Home size: 1,339 sq ft
  5. 3 beds, 3 baths
    Home size: 1,623 sq ft
    Lot size: 5,998 sqft
  6. 3 beds, 2 baths
    Home size: 1,641 sq ft
    Lot size: 6,438 sqft
  7. 3 beds, 2 baths
    Home size: 1,356 sq ft
    Lot size: 8,637 sqft
  8. 2 beds, 2 baths
    Home size: 1,223 sq ft
    Lot size: 1,663 sqft
  9. 4 beds, 2 baths
    Home size: 1,376 sq ft
    Lot size: 6,098 sqft
  10. 0 beds, 0 bath
    Home size: 2,420 sq ft
    Lot size: 6,346 sqft

See all Real estate in the city of San Jose.
(all data current as of 7/22/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Have your own agentSome Silicon Valley home buyers do not want to have their own buyers agent, but instead expect that they can find properties in the San Jose area that they want to see and request that the listing agent show it to them in a private appointment.  These same potential buyers may be surprised that the listing agent may refuse to show them the listing outside of a regularly scheduled open house – that is, if the seller is permitting open houses.

What’s going on?

In earlier articles we’ve discussed the need for a buyer broker agreement (verbal at the least, but possibly in writing) and why you, as a buyer, ought to have your own representation at the negotiation table.  (If you missed these, see the links under “related reading” below.)   Today I want to dispel the myth that the listing agent is required to open up and show condos or houses for sale to anyone who calls and requests seeing them and explain why that’s the case.

Showings of homes for sale are determined by the listing agreement or contract between the home seller, the listing agent or Realtor and the broker

The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate.   It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. Here are some of the expected scenarios and reasons why showings are somewhat restricted most of the time: Continue reading

Although most of the time, a home seller’s main concern is with getting the highest price (or net), that’s usually not the only concern – and sometimes it’s not even the most important one.  Selling one’s house, townhome or condo is highly personal and not just a business decision.  The relationship with the buyer and their agent is extremely important. It can literally make or break the deal!

So let’s talk about the things which can help or hurt the relationship between the buyer and the seller.

Selling relationships

With multiple offer situations, many home buyers in Silicon Valley know that it’s in their best interest to write a nice letter, perhaps with a photo, discussing why they love this property.  A lot of garbage clauses go out the window when there are multiples.  But now, in the San Jose area we are seeing a return to normalcy and many bids are not multiple offer situations.  Some buyers think that it’s no longer necessary to try so hard.    I’d advise against acting on this impulse, because the little things, or lack of them, can cause a transaction to succeed or fail.

In recent weeks I’ve seen home buyers shoot undermine their own best interests by dragging their feet on negotiation response times, asking for unreasonable things in the purchase offer, or having a buyer’s agent who appeared incompetent.  Think of the offer process as a courtship and ratifying the sale as a marriage.  If the courtship is rocky, why would the marriage be any more promising?  The market remains a seller’s market, if a calmer one, but home owners don’t want to be mistreated.

The old adage that “you only get one chance to make a first impression” is still true with real estate contracts and negotiations.  If you don’t present yourself well, with your Realtor’s help, then the seller is not going to want to sign an agreement that ties them to you for the next month or two.  And he or she certainly won’t want to see you in their beloved home.

  1. 3 beds, 2 baths
    Home size: 1,779 sq ft
    Lot size: 19,950 sqft
  2. 4 beds, 2 baths
    Home size: 2,820 sq ft
    Lot size: 3.34 ac
  3. 6 beds, 5 baths
    Home size: 7,561 sq ft
    Lot size: 2.21 ac
  4. 9 beds, 5 baths
    Home size: 4,980 sq ft
    Lot size: 11.62 ac
  5. 5 beds, 2 baths
    Home size: 1,904 sq ft
    Lot size: 5.00 ac
  6. 3 beds, 2 baths
    Home size: 2,000 sq ft
    Lot size: 13,285 sqft
  7. 4 beds, 3 baths
    Home size: 3,270 sq ft
    Lot size: 6.13 ac
  8. 3 beds, 3 baths
    Home size: 2,357 sq ft
    Lot size: 4.99 ac
  9. 5 beds, 5 baths
    Home size: 5,477 sq ft
    Lot size: 2.46 ac
  10. 4 beds, 2 baths
    Home size: 1,680 sq ft
    Lot size: 7,187 sqft

See all Real estate in the Los Gatos Mountains community.
(all data current as of 7/22/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Good checks acceptedHome buyers might be surprised that there’s a right and wrong way to draft the check for the initial deposit or earnest money when a real estate contract is presented here in Silicon Valley.

Right way – Be Specific:

  • Find out the name of the title company and make the check payable to that particular title company
  • Put the property address in the memo line
  • Write a new check for every offer

Wrong Way – :

  • Leave a big, blank space and write only Title Company in the “to” line
  • Write a generic initial deposit number that has nothing to do with your offer (not 3% of the offer amount)
  • Leave the date blank so that your agent or someone else can fill in the date later (with different hand writing & ink)

Why does it matter?  The first way, the seller and listing agent know that you are interested enough to find out where escrow is opened and to write a check for this particular property.  The second way is as if you are throwing spaghetti at a wall to see if it will stick. (Yes, throwing cooked spaghetti at a wall IS a good way to know if it’s cooked, but it doesn’t work well for much else in life.)

Perhaps if your offer is the only one, the effort you put in with this small detail will seem moot.  But if you are up against multiple offers, shortcuts on your part, or your agent’s, will count against you.  Put it this way: if you don’t look serious when you’re trying to make a good impression (think of a courtship), how will you be in escrow (think marriage)? If it’s bumpy now, it doesn’t bode well for the future – and you might be eliminated from the running since you’ve failed to make a better first impression.    So slow down and do it right!

  1. 2 beds, 2 baths
    Home size: 1,223 sq ft
    Lot size: 1,663 sqft
  2. 4 beds, 2 baths
    Home size: 1,683 sq ft
    Lot size: 7,000 sqft
  3. 0 beds, 0 bath
    Home size: 2,599 sq ft
    Lot size: 13,198 sqft
  4. 3 beds, 2 baths
    Home size: 1,536 sq ft
  5. 3 beds, 2 baths
    Home size: 1,339 sq ft
  6. 3 beds, 3 baths
    Home size: 1,623 sq ft
    Lot size: 5,998 sqft
  7. 3 beds, 2 baths
    Home size: 1,641 sq ft
    Lot size: 6,438 sqft
  8. 4 beds, 3 baths
    Home size: 1,538 sq ft
    Lot size: 6,098 sqft
  9. 4 beds, 3 baths
    Home size: 1,891 sq ft
    Lot size: 11,160 sqft
  10. 3 beds, 2 baths
    Home size: 1,356 sq ft
    Lot size: 8,637 sqft

See all Real estate matching your search.
(all data current as of 7/22/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Congratulations your home is sale pendingIf you have had your San Jose or Los Gatos home on the market and just gotten it under contract, or sale pending, you may be very excited and happy.  Perhaps you’re a little worried too.  What should you expect now that you’ve got a ratified offer?

Each purchase agreement is a little different from every other one, so this article cannot give you an exact road map.  But let’s look at the big picture and touch on what normally happens to give you an overview.  We’ll do this in a simple list – which is not exhaustive!  Your real estate professional can provide you more info specific to your transaction.

  1. You should get a copy of all the paperwork which you have signed (electronically or paper)
  2. A timeline is usually given to the seller by the listing agent, an assistant, transaction coordinator or someone else involved in the sale (so that you know the major dates)
  3. The buyer’s initial deposit or good faith deposit should go to escrow (most often within 3 business days, most often a check but sometimes by wire)
  4. In Silicon Valley, normally buyers and their agent get disclosures from your listing agent prior to submitting their bid.  If they did not return the signed disclosures with the offer, this should be done not too long after the offer is accepted and certainly within any contingency timeframe for property condition.  The buyer’s agent will need to do a disclosure after walking through the property and carefully noting the condition (this is the AVID or Agent Visual Inspection Disclosure), so expect him or her to need to visit your property and spend some time looking at it carefully.
  5. The buyers may order inspections or have a walk through with the home inspector that you hired prior to putting your property on the market
  6. Assuming that this is a normal sale with some buyer contingencies, there will be a deadline for them to be removed.  Depending on many factors, the buyers may want to renegotiate some aspects of the contract after obtaining inspections or further information on the house, townhouse or condo.
  7. Once all contingencies are removed, you’re in the home stretch!  The next big events are the signoff at the title company and the final walk through, both of which tend to happen within the last week of the escrow period.
  8. Sometimes there is a seller rent back or lease back, and the seller may stay past the close of escrow date if that’s part of the agreement.  Normally, though, the seller must be fully out of the home on the day of closing, and the property should be reasonably clean or “broom clean”.  You’re not expected to wash the carpets and windows, but there should be no debris, the home should be fully empty and vacuumed and generally cleaned up after everything is gone.  Most sellers hire a cleaning crew to do this either the morning of the closing or the day before.

These are general milestones, not a complete list of what to expect. Want more info?  This is covered in more depth in my book, “Get the Best Deal When Selling Your Home in Silicon Valley“.

  1. 4 beds, 3 baths
    Home size: 2,165 sq ft
    Lot size: 2,848 sqft
  2. 4 beds, 3 baths
    Home size: 2,224 sq ft
    Lot size: 3,319 sqft
  3. 4 beds, 2 baths
    Home size: 1,983 sq ft
    Lot size: 10,101 sqft
  4. 3 beds, 3 baths
    Home size: 2,057 sq ft
    Lot size: 10,375 sqft
  5. 5 beds, 5 baths
    Home size: 6,181 sq ft
    Lot size: 3.79 ac
  6. 3 beds, 3 baths
    Home size: 2,106 sq ft
    Lot size: 8,881 sqft
  7. 6 beds, 3 baths
    Home size: 2,758 sq ft
    Lot size: 7,143 sqft
  8. 3 beds, 3 baths
    Home size: 2,319 sq ft
    Lot size: 1,916 sqft
  9. 4 beds, 3 baths
    Home size: 3,014 sq ft
    Lot size: 17,755 sqft
  10. 4 beds, 3 baths
    Home size: 2,313 sq ft
    Lot size: 17,755 sqft

See all Real estate in the Los Gatos/Monte Sereno community.
(all data current as of 7/22/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

What is happening?In the San Jose area, probably 90% or more of real estate purchase contracts are emailed to the listing agent by the buyer’s agent.  In the old days, the standard of practice was to have a live presentation by the buyer’s agent to both the listing and agent and the seller(s). Can the buyer’s agent present the real estate purchase contract directly to the seller and listing agent in Silicon Valley? Yes – it’s just not so common anymore.

Either way, what happens after the contract has been delivered or presented?  If it’s a live presentation, the buyer’s agent will be asked to either leave and be called later (or emailed) or requested to take a seat in the lobby (or in his or her car, if at the seller’s home) and wait while a private discussion happens between seller(s) and listing agent.  From there, it could be some questions to clarify why things are a certain way (such as a low initial deposit, a long escrow or long contingency time frames).   Questions aside, the response could be quick if it’s a super clean offer and the only one presented (or in the wings).  Conversely, it may be several hours, or possibly longer, before hearing back with an acceptance, rejection, or counter offer.

It’s similar with an email presentation.  You might get questions or clarification requests right away (ideally one call with all questions, rather than a stream of them over several hours) coming from the agent and/or seller through the agent.  Or you may not get much other than an acknowledgement that the paperwork was received.  You may find yourself waiting and waiting….

What’s happening behind the scenes if the response is not forthcoming in a short period of time? Continue reading

Translation

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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
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Santa Clara County,
San Mateo County, and
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