Our fall weather here in Silicon Valley is acting like spring weather – bouncing back and forth between warm, dry days and cold, wet ones.  Should this impact the way you present your home to the real estate market if it’s for sale?  Absolutely.

If you want to make the best impression on potential home buyers, your house, townhouse or condo needs to be inviting no matter what the weather may be doing.  In the heat of summer, sellers are tempted to close up all the curtains to keep out the sun and heat – it’s a mistake because buyers typically don’t respond well to dark, cave like homes.  The wet weather brings different challenges that also must be handled appropriately if you are to snag that best buyer!  Here are a few tips to make your listing the one that appeals to Silicon Valley home buyers who come out to see it:

1. Make sure that your downspouts are directing rain water away from your house or any structures (often 6′ or more is suggested); it is imperative that there be no “pooling” of water, especially near the home – this will cause buyers to worry about water in the crawl space and what it may be doing (foundation cracks, mold, etc.)
2. Trim bushes and vegetation back from walkways and sidewalks.  When it’s wet outside, these lovely bunches of greenery collect water and as visitors go past them, they can spill water onto the passers by. Not pleasant.  Look at your sidewalks, driveway, and walkway and make sure that wet bushes and branches won’t be hitting anyone coming up to your front door.
3. If your gutters leak, they’ll be noticed and will indicate that your property hasn’t been properly maintained, so repair or replace them.
4. Indoors, keep the heat on if the temperature would be below the comfortable range – cold buyers don’t linger, and buyers who don’t linger don’t buy! I suggest at least 66-67 degrees. (more…)

A real estate contingency is a provision that something must be overcome or approved to consummate a transaction.  In other words, it’s a condition, such as “I will buy this house IF (fill in the blank)”.

Silicon Valley real estate consumers are well aware that home buyers normally have a few contingencies during escrow.  The major ones are for property condition or inspection and loan or finance (to include appraisal).  But there are others too, such as approving the preliminary title report, obtaining and accepting disclosures etc. (On rare occasions, such as some tenant occupied properties, the buyer may have to make an offer first and then, after it’s accepted, view the home or apartment building. In that case it’s “write offer subject to inspection” – a contingency that you’ll accept it after you get into escrow! This is how apartment buildings and some multi-family dwellings are sold.)

What about seller contingencies?

Sellers, too, may be able to back out of the contract if certain conditions are not met.  The two we see most common are these:

1. In the case of a short sale, the sellers have a contingency for bank approval and for their acceptance of the bank’s terms.  If the bank doesn’t approve the short payoff, the seller does not have to sell the house to the buyer.
2. Sometimes sellers only want to sell their home if they can find another one which they wish to purchase.  This can be a contingency also: “sale subject to sellers’ finding a replacement property within X number of days“.

Some homes are part of a co-op (cooperative) and in a few areas around the country, I think mainly in New York City, a board must approve whomever wants to purchase the home or unit.  In those cases, there would be a seller contingency for board approval.  I have never run into it in the San Jose, Los Gatos, or Saratoga area but it is possible that you could see it somewhere in California.

How does a seller’s contingency impact value and desirability?

Seller contingencies usually make it difficult to attract buyers since there is a giant unknown in terms of the ability to close escrow and it’s not in the buyer’s control to fix it.  With short sales, that contingency must be in place for the seller, but not so for the “replacement property” clause.  When sellers invoke that contingency (which must be listed in the MLS), it will usually cut down on showings, offers, and ultimately the probable buyer’s value for the home – so normally this is not advisable.

What’s your home buying style?  Impulsive? Cautious? Analytic?  Deep bargain hunter?

A few times in my real estate career, I’ve worked with Silicon Valley home buyers who were so anxious to purchase a home that I was concerned that their impulsivity might be a cause for buyer’s remorse later.  When that happens, I try to slow them down a little – I’ll suggest “let’s look at least a few homes” if it happens that they want to buy the very first home they saw. Part of my fiduciary duty is to look out for my clients’ best interests, and sometimes that means putting the brakes on just a little (or telling them what they don’t want to hear).

More commonly, it’s the other extreme that I see in our very well educated, extremely analytic population: paralysis by analysis or an overabundance of caution. (Sometimes it’s overabundance of bargain hunting.)

The vast majority of successful Silicon Valley home buyers are somewhere in between: they set up their priorities and goals (“I want to buy in the next 4 months at this price with this location or school and this type of property and size of home”). The clearer they are on their goals, wants and needs, the easier it is to help them get it – as long as they have realistic expections. That is key!

Once – only once – I sold a Los Gatos house in which the husband purchased without the wife’s physically seeing it.  This is rare!  They had moved so many times that he understood precisely what mattered to her, and if the house met that list, he was good to go. (more…)

Multiple offers have returned to many segments of the Silicon Valley real estate market.  We are hearing about them in Palo Alto, Cupertino, Mountain View – areas where newly minted IPO money is having an impact – but also in more modest, middle class areas such as San Jose’s Cambrian neighborhood. The trend appears to be spreading.

What Silicon Valley home sellers need to know and do to attract multiple offers

If you’re a Silicon Valley home seller, what do you need to know to try to get multiples on your home?  What should you beware of?  In short, here’s what needs to happen if you want to attract multiple offers on your home for sale:

1. The home must be turnkey, either fully remodeled or close to it – it must look like there’s nothing or very little for a buyer to do.  In addition to being turnkey, it must be squeaky clean and well staged! It needs to be comfortable – not too hot, not too cold. You want buyers and their agent to linger longer.
   
2. The price must be at or even under market value.  That is, you must be willing to price it aggressively.  Think it’s worth $1,050,000?  You might list it at $999,999 to get in under a major price threshold and to be the very best, most attractive property for the money. Yes, it might be under priced.  Over priced listings get either one offer at best or, more likely, none at all.
3. The property must be highly accessible. If it is hard to see, you probably won’t get multiple offers (and may get none at all).  (Please see articles on accessibility and on open houses.)
4. Finally, the property must be well marketed.  This includes a wide range of factors ranging from photographs, text, fliers, signs, and even the commission rate offered to the buyer’s side.

What Silicon Valley home buyers need to know and do to compete with multiple offers

If you’re a Silicon Valley home buyer, how do you win out in multiples without giving away all of your rights or overpaying for your house/home? (more…)

If you are planning to purchase a home in Silicon Valley, most likely you’ll be working with a real estate professional and together you will use either the California Association of Realtors (CAR) purchase agreement form or the Peninsula Regional Data Source contract (PRDS). Both of them begin with the same basics: who is making the offer, what property is involved, how much is being offered to the home owner and how much is being put down or put into escrow as an initial deposit or good faith deposit.

What is the initial deposit in real estate contracts?

The initial deposit, or good faith deposit, is the amount of money which the buyer puts into the escrow account at the beginning of the transaction. It is usually given in a personal check, which is cashed within a day or two of being brought to the escrow holder (in our area, that’s a title company – in southern California, they tend to use escrow companies or even one of the real estate brokers).

How much is the initial deposit?

In Santa Clara County, or the San Jose area, often the initial deposit is anywhere from 1% to 3%.  I have occasionally seen offers with as little as $1,000 on them but have not seen sellers want to take those offers.  They want to know that the buyer they get into contract with “has a little skin in the game”. (more…)

Did you buy your house at the peak of the market?

Recently I met with some of my past clients, who purchased their San Jose house close to the height of the market (2005-2007).  In those days it was a hot seller’s market (not unlike many parts of the Silicon Valley real estate landscape today, actually), and buyers routinely purchased their homes “As Is“, meaning no repairs provided by the sellers.  Desperate to get in when prices were appreciating fast, it seemed that most home buyers said “we’ll take care of it after we own it“.

But they forgot.

Actually this didn’t just happen during the peak of the market here in Santa Clara County – there’s always a percentage of consumers who buy As Is to get a better price.  They have good intentions about taking care of the mold, the termites, the roof and whatever else might not be either in good working order or free of infestation.  But once they move in, the “to do list” doesn’t seem to have those items as a high priority, and over time they completely fall through the cracks.

Pull out your old file, find your inspection reports and review them, especially if you are preparing to sell your home

Today I want to encourage you to dig out your old home inspection and pest reports, dust them off, and have a look.  Did you need to address a problem with termites, electrical issues, leaks?  Is there something to take care of with the roof, gutters, dry rot or fungus?  All of those things do not self-correct, but instead grow worse over time.  (more…)

Do pools enhance property value in Silicon Valley back yards?  Do they make homes easier or more difficult to sell in Santa Clara County? What’s the impact on resale value?  The common wisdom is that it depends on the amount of yard or lot size, the price point and the location of the residence. When a pool takes up the majority (or virtually all) of the back yard, most often it makes the property undesirable to buyers – at least to most home buyers – and that, in turn, causes the sales price to slip a bit. It used to be that pools were almost a given on more expensive residential real estate, particularly if there is a lot of land.  Today I ran the numbers, though, and it appears that things have changed.  Below please find the “months of inventory” for homes with and without pools and note that it is very consistent, in the fields I checked, that it’s now harder to sell a home with a pool than without

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Pools appear to make it harder to sell a home in Santa Clara County right now.

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