Ten years ago, about a year after purchasing our home in the Belwood area of Los Gatos, we remodeled our kitchen.  It was quite an upheaval and very expensive, so we were hoping it would “last” awhile.  (Kitchens get a remodel on average every 16 years in the U.S., by the way.)  But by years nine and ten, some of our kitchen appliances started to act up, and this week our dishwasher gave up the ghost entirely.  I really had hoped it would have gone closer to 15 years, but the apparently the fancy newer appliances have a lot of parts, all of which can fail.  I was told that ten years is about average now.

Jim and I are very analytical about major purchases, so I spent a lot of time on Consumer Reports (where I’m a member) first, reading reviews, watching videos and eliminating a few brands right off the bat.  Unfortunately the CS site does not include Energy Star ratings info, so I also visited the PG & E site and was cross referencing.  Naturally, I’d like to get a rebate!  There’s also a sort of cash for clunker appliances deal, too – you can get $100 back for your old dishwasher if you purchase one of the newer models on a list that the stores have.  Buying a dishwasher is a little like booking airline tickets now: you have to factor in any rebates, trade ins, delivery charges, haul away fees, etc. as well as the actual price so you can compare the true net cost of one appliance versus another.

We visited seven stores on Saturday, hoping for good Labor Day sales and wanting to end hand-washing our dishes as soon as possible.  We stopped by businesses in Campbell, Santa Clara and San Jose (skipping another good store in Mountain View as it was just too far for us):  Fry’s, Home Depot, University Electric , Western Appliance, Sears, Costco and Best Buy.  I didn’t want to make this purchase online as there are too many things that might not be fully disclosed with a web purchase but can be understood in person.

At most of the shops, our experience was fine, but there was, of course, a range from pleasant to OK to really unpleasant. 

University Electric has a sign explaining “if you want assistance, please sign in”.  That was nice – we got breathing room to roam but knew how to get help if we wanted it.  After looking around for about 20 minutes, we did chat with a nice sales lady named EJ Rodrigues who was really knowledgeable but not in the least bit pushy.

In most stores we had to look for an employee for help (Costco, Sears, Fry’s, Best Buy, Home Depot) but usually that wasn’t too hard to do.  Some places had very little selection, so it was “in & out” (Costco had some online but none at the Almaden Valley Fashion Plaza store location).  (I should add that Best Buy has a wonderful website for comparing appliances.  It rolled a lot of the Consumer Report type info in with the Energy Star info.  Next time I will start with this website.)

Our one negative experience was at Western Appliance, where a sales guy began walking along side of us the moment we walked in and asked if he could help us. That part was OK, of course.  I explained that we were looking for dishwashers but weren’t going to buy that day (we had 7 stores to visit first!).  He laughed in response and asked why not.  I explained (or tried to) that we are very analytical. . . .  He laughed some more, before I could finish my sentence, asking why we were so analytical or something along those lines.  Having been laughed at and interrupted, I asked if we could please just see the dishwashers and he showed us where they were.  He informed us that he was very knowledgeable about them…and then left us alone – I think he knew that he’d blown his opportunity with us and realized we didn’t want to be “sold to”.  We did not stay long as I couldn’t leave that store fast enough!  (I have bought there before – several times, actually – because the prices are often good, but had warned my husband that the sales people there tend to be very aggressive in my experience.) That was really the only unpleasant shopping experience I had all day, but I have patronized that store in the past and it wasn’t nearly so bad previously, so I wouldn’t say to rule it out based on my one negative encounter. 

After all the visits and looking at all the models – which ranged from about $250 for ugly and loud to about $1600 for a fabulous Miele model that can be used in an amazing number of ways, we did decide on both a make, model, and store. 

We’re going back to University Electric to purchase one of the models that EJ showed us.  The one we’ve decided upon has the right combination of features (it’s quiet, above all), look, and is in budget.  And it’s nice to do business with a company which is helpful but not pushy.

Being in sales myself, this experience made me think of realty consumers who walk through the door of an open house and how they feel when having to deal with real estate agents here in Silicon Valley. Different agents can provide a totally different experience, ranging from super aggressive (never leaving you alone, asking an invasive feeling number of questions or pressuring to the point of being slimey), to not very available (during open houses they stay on the couch, reading a paper, working on their computers or staying on their cell phone the whole time).  Many, I hope, are “just right”, trying to be helpful and available without being pushy.

I’m keenly aware of this problem – my own goal as a real estate professional holding an open house is to provide helpful information about the property I am trying to sell, find out just a little about anyone who comes through the door, and then give them breathing room to see the property without being tailed.  (I do always ask how people found the open house: via signs, an ad, the internet, an agent etc. – this is helpful to me for many reasons.)  I don’t do a “sign in sheet”, which is mostly used for agents to pick up leads, not really to protect the seller. If people linger too long in any part of the house, I will go see what’s happening, though, because I also need to help protect the seller’s personal property, which may be at risk when people mill through the home.

I think most consumers want the same thing: information, guidance, being treated politely and respectfully.  Whether you’re buying a home appliance, a car or a house or condo, buyers and sellers have choices.  You can work with the best fit and have a better experience.  When I’m wearing my consumer hat, that’s exactly what I do, too.

• pricing the home
• photographing the property
• describing the home on the MLS (and including good pictures)
• the quality of the flyers
• the print advertising
• the online advertising & exposure
• the networking with other agents
• the direct outreach and appeal to consumers
• the accessibility of the home
• staging the home to sell (appeal, cleanliness, no odors, etc.)

Marketing can be good, bad, or somewhere in between. Bad marketing will likely cost sellers money and good marketing will likely make them money.  

Today we’ll go over the most important elements of marketing because sellers should evaluate them when hiring a Realtor to assist them in the marketing and sale of their home.  While there are many areas of marketing, the most crucial, by far, are these three: pricing, photos, and the description on the MLS.

Pricing:  The biggest marketing mistake which is commonly seen is overpricing.  Sellers sometimes believe that their home is worth more than the buying public do and a home will remain unsold no matter what else is done right.  In fact, you could fly airplanes aroud the home and put full page color ads in every paper around the world but if the home is overpriced, it still won’t sell!  Pricing is the most important part of marketing.   With a too-high price, traffic will be diminished and offers will be low at best (lower than actual market value).

Of course, most homes are worth not just one exact dollar amount but somewhere within a range of prices, depending on terms, the speed of the sale etc.  If the pricing is well done and the rest of the marketing is also quite good, the home ought to sell on the high end of what is possible at that time.

Pricing mistakes are very costly and very easy to make.  Here are some of the ways which sellers can be misled about the probable market value of their home:

• using old comps
• relying upon online home valuations
• basing their home’s sale price on what they “need”
• hiring an agent based on his/her suggesting the highest list price (we call that “buying the listing” when an agent overstates value to secure the listing)
• expecting 100% back from all improvements done to the home
• believing buyers can “always make an offer” (if it’s overpriced, they usually won’t)
• thinking there’s no harm in just reducing the price later (if the market is going down, you will be “chasing the market down”)

The one thing that neither the sellers nor their Realtors control is the real estate market, which is fickle and can change.  In recent years it’s been up and down, depending upon location, price point, school districts and more.  Using six month old comparable sales to establish current market value just isn’t appropriate.  Sometimes even the most recently closed sale is not enough, especially if the market is sliding.  Instead of just relying on the solds, also look at the pendings and the current competition.  The less competition your home has, the better odds you have of selling it – and for more.  But a surge of inventory will cause home values (including yours) to drop.   To understand the probable buyer’s value, all of these must be factored in together.  (The online valuation sites do not do that.)

I should add that it is harder to sell a property that has issues such as high voltage power lines, deferred maintenance, messy tenants who make showings difficult, busy road, junky neighbors, or some other undesirable element.  Many agents will suggest a lower price to compensate for whatever issue is hurting the marketability of the home.

While it’s true that there is no problem that a better price cannot fix, most sellers are trying to maximize their sales price.  For that reason, I’d always suggest asking your real estate agent if there’s anything that can be done to improve the market value aside from that lower price.  Sometimes fresh paint and carpet and a professional house cleaning can do wonders for the home’s saleability.  Or giving tenants a lower rent in exchange for their cooperation during the sale will create an easier time for buyers wanting to see and purchase your home.   A little effort may have a great payoff.  (Some agents focus almost exclusively on price and may not be worried about any other element of marketing.  This is a mistake, so be aware that you may run into an agent with this belief.)

Photographs:  Beyond pricing, the next biggest area where we commonly see bad marketing is in poor photography of the home.  Buyers care a tremendous amount about the photos of the home, both outside and inside, and will not bother to see properties where the pics are absent or skip main rooms (such as kitchens and bathrooms, which are expensive to remodel). The presumption is that if it’s not photographed, it’s because it’s horrible.

Good photography will show the home in its best realistic light.  It will not have over-saturation (somewhat surreal looking, which seems to be in style now). 

A good main photo will show front of the home and include the front door and windows (without focusing on the garage).  Bad photography will not only zero in on the garage and driveway, but will likely include a car parked there (too much trouble to ask them to move it!) or maybe garbage bins, toys, hoses or other distractions laying about. This main photograph will show up everywhere from the MLS to the house flyer to a myriad of online websites; I cannot stress enough how important it is that it be nicely done!

The photo below is of a home in Saratoga that my parents owned for about 20 years, and which I sold for my dad after my mother’s passing.  This house is on a flag lot -  it’s behind another home and to get to it, you have to go down a long driveway.  At the end of the driveway, naturally, is a garage.  When photos are taken from there, what is prominent is a 3 car garage and a whole lot of concrete.  That’s the easiest place from which to take photographs, but not the best!

Photograph of home with front door as main focus

The interior and backyard shots also need to be good, of course.  Pictures should not be taken until the home is clean, staged and “show ready”.  For some home owners, it’s not difficult to get their home in shape for the public to view it online and in person. For others, it’s an immense effort.  If you fall into the latter category, get help!  It is cheaper to hire a stager to assist with decluttering and staging then it is to lose the buyer.

Remember, any main area of the condo, townhouse or house which is not photographed will be presumed to be bad by the buying public.  Make sure that the bathrooms and kitchen, especially, gleam and are well photographed!

The MLS:  The multiple listing service (MLS) is the # 1 way we reach buyers in the San Jose – Los Gatos – Saratoga – Silicon Valley area.  The description and photos there are key to getting qualified traffic into the home.  In addition to good still pics, it’s helpful to have a high-quality virtual tour.  Today many of the virtual tours are really just slideshows of still photos.  The better ones, though, include pan shots or actual videos.  (When I do virtual tours they include many photos which I stitch together to create pans of rooms and yards. In the last year or two I’ve been doing 40 – 60 photos per tour.)

The description on the MLS is also key. There are a limited number of characters for comments.  Using precise, descriptive words can be very powerful, while using vague descriptives can be very unconvincing.  Here are some examples:

Weak:
Nice floors
Gorgeous kitchen
Beautiful
Newer appliances
Well maintained
Updated kitchen
Newer roof
Newer windows
air conditioning
(also weak: no permits or finals or “permits unknown”)

Strong:
Hardwood floors, just refinished
Slab Granite countertops, stainless steel appliances
Wolf range, Bosch dishwasher, (brand names)
Kitchen remodeled 3 years ago
Presidential roof, 1 year old
Trane heater & A/C, 3 years old
(Brand name – Andersen, Pella etc) windows installed 2 years ago
If work done with permits and finals, say so!
If work done by well known builder or kitchen remodeler, say so!

Obviously, only offer the age of the components of the home if they’re newer!

Flyers and Print ads: Usually if there’s a problem with the flyers or ads, there’s a bigger, underlying problem with the photos or MLS and the bad flyers and ads are something of a trickle-down problem.  But let’s touch on the print media too since it’s a hot button for many, including me (I cringe when I see awful flyers).  

Recently I saw a one-sided house flyer of a million dollar home that has one terrible “main” photo which showcases the garage door & driveway and the street in front of it (with the manhole cover being prominent) and a bunch of very tiny thumbnail pics on the side which are too small to even figure out.  Takeaway: the garage is the big deal here. Forget the house. Oh and to top it off, there’s a car in the driveway! (Sorry folks, it’s not included in the sale.)

The description on this marketing piece was awful too.  The main title was a non-descriptive line: “Gorgeous Home”. That could mean almost anything, it’s so vague!  And the address line included the state – very silly since we are hundreds of miles from anything out of California.

To top it off, the price was missing on this info sheet, and so was the MLS number.  Why?  Usually agents do that so they can get the “up calls” and try to convert leads to buyers.  (So too was the agent’s license number missing, which is now required by the California Department of Real Estate.) 

It’s frustrating to see really terrible marketing, because I know that the seller is going to be hurt by it, but once a home is listed, other agents cannot interfere.  I wish that managing brokers paid more attention to the marketing that their agents did – it would help both the consumers and the real estate businesses to do a better job.

So what should you expect in a home flyer if your home is listed for sale by a Realtor?  Ask before you hire so you are not surprised!  Some agents (small minority) will do no flyer or just print out info directly from the MLS.  Some will do a lousy one sided piece.   Most agents will do a nice 2 sided, color flyer with photos on both sides for most homes, including condos.  For very high end or luxury homes, there may be a large handout with four sides and many photos and text.   (Some agents will produce a 4 sided flyer but reserve the last page to advertise themselves rather than their listing.)

But do flyers really matter at all? 

I believe that they do matter.  Buyers, their family and friends use flyers on the for sale sign’s post box to screen homes to see.  Great flyer? Go see the home!   Lousy flyer? Forget it.  (Buyers also use the flyer as a memory jog after seeing homes so they can keep them all straight.)  It’s not a huge percentage of impact, perhaps somewhere between 3% and 10%, but would you want to eliminate any significant chances of your home selling for top dollar? 

Print advertisements, on the other hand, are not effective for selling homes anymore.  They are effective for marketing the listing agent, though!  Buyers and their agents are not looking at the local newspaper or homes magazine but instead are browsing homes online. 

The magazines are beautiful but have a deadline several weeks prior to production, so by the time they are on the shelves at the local grocery store, the homes advertised may be long gone.  Newspapers are more current but still not 100% up to date for the same reason. 

But visit www.MLSListings.com (the public and the data you pull is current to within 15 minutes.  Can’t beat that.

So forget the print ads.  They make the sellers feel good to see their home in print but they are not effective at marketing the property, just the listing agent. 

To get the most bang for your buck with real estate marketing, focus first on correct pricing, fabulous photographs and ideal MLS description & comments.  These are the foundation for excellent realty marketing of homes for sale in Santa Clara County and throughout the state.  Also pay attention to staging (in conjunction with photos) and the home flyers.  Keeping the home accessible and pleasant not just on the day the photographs are shot but throughout the listing period is important too, of course. 

It’s a great bonus if your agent is a good networker, since often homes “sell twice”, first to the real estate community and second to the buyers themselves.  In some cases, this is extremely important, but most of the time the networking element is icing on the cake.  As long as the fundamentals are right, this last bit of marketing may not matter too tremendously in the majority of cases, but if your agent does it, consider that a plus.

Default is a strong word which refers to a failure to do something promised in contract or not doing it on time; we sometimes call it “non-performance”.  In the purchase agreement, buyers and sellers both make promises to do certain things within a certain timeframe, so either one could potentially default.  For instance, the following items are areas where a buyer could default:

• not putting the initial deposit (good faith deposit) into escrow on time
• cancelling the sale after removing all contingencies or without cause allowed by the contract
• not removing contingencies on time (or possibly ignoring other deadlines)
• not completing loan papers on time

Missing contingency removal deadlines may be a default.  For instance, the PRDS contract states on page 1 of that agreement:

BUYER’S  FUNDS:  Buyer  represents  that  all  funds,  including  deposits,  cash  balance,  and closing costs, will be readily available as “good funds” (as determined by Escrow Holder) at  the  time  of  payment.  Obtaining  these  funds  is not a contingency of this Contract.

The loan approval, though, may be indirectly tied to whether or not the buyer liquidates stocks or other accounts to provide the downpayment.  What happens if the loan is fully approved except for the verification of this downpayment?  The buyer’s job is to have the funds available so that obtaining them later does not cause a delay.  If a delay is caused because the buyer didn’t get the funds ready on time, that is a buyer default.

Not every default is an equally grave problem, of course.  In the case above, the buyer can go ahead and remove the loan contingency and continue to liquidate the downpayment assets (which should have been done much earlier in the escrow).  BUT, if the buyer does not complete the sale due to a problem with getting those funds, his or her good faith deposit will be at risk via the liquidated damages clause because getting those funds is not a contingency.

Sellers, too, can be guilty of defaulting on contractual promises. Here are some areas in which a seller could default:

• not moving out on time
• not providing completed disclosures or reports on time
• not having work done which was contractually required (such as pest work or repairs)
• not keeping the power & water on for inspections and final walk through
• causing a delay in closing due to not signing off on time

In Silicon Valley, there are two purchase agreement forms in use: the California Association of Realtors (CAR) contract and the Peninsula Regional Data Service (PRDS) contract.  Generally speaking, the PRDS & CAR contracts are similar on many points.  They are not so similar in the treatment of defaults, though.

Oddly, the CAR contract only mentions the word default twice, and in both cases the topic is a buyer’s default, first in the liquidated damages paragraph (25) and next in the other terms & conditions paragraph (27).

Paragraph 25: “If Buyer fails to complete this purchase because of Buyer’s default, Seller shall retain, as liquidated damages, the deposit actually paid.”

What about the PRDS contract?

One of the pluses to the PRDS purchase agreement, in my opinion, is that it has a fairly comprehensive discussion on the concept of default in the realty transaction (paragraph 22).

[The first part of this paragraph (mentioning paragraph 5) is referencing the liquidated damages clause.]

This PRDS discussion of default lays out very clearly that if one party defaults, he or she may be liable for damages.  Seller doesn’t move out on time? Perhaps he or she will be footing the bill for the buyer’s storage and hotel costs.  Buyer default causes escrow to not close? Deposit is at risk.  “Other Non-Performance” puts everyone involved on notice that a default may cause the one responsible to pay damages.

When is it not a default?

Buyers usually have some time to investigate the property and anything which materially impacts the home’s value or desirability.  Let’s say they have 10 days to remove their property condition contingency, and during that time they have a foundation inspection which turns up a lot of work which needs to be done.  The buyers could ask the sellers to fix it, and if the sellers refuse, the buyers may be able to get out of the contract and have their deposit returned (less any costs not yet paid for inspection, appraisal, etc.).  This contingency period gives the buyers the right to back out if they learn something about the property that they cannot or do not accept.

So too with an appraisal contingency – if the home does not appraise to purchase price, they don’t have to buy it.  Also with loan or other contingencies.

Sellers sometimes have contingencies, too.  If the sale of the house, condo or townhouse is subject to (contingent upon) a bank approval of the sale because it’s a short sale, the seller does not have to sell if the lender either does not approve the sale or if the lender will only approve it if the seller will put money into the transaction.  The seller can elect to not complete the sale if she or he does not like the bank’s terms.

If the home is significantly damaged prior to close of escrow due to something like an earthquake or fire, the buyers can usually get out of contract even if their contingencies have been removed due to the changed condition of the property.  This would not be a default.

In closing, if you are in transaction to purchase or sell property, it is imperative to remember that time is of the essence and all changes must be agreed to in writing.  If there’s a problem with some part of what you need to do, see if you can fix it with a little more time and if so, consider writing an addendum and asking the other side to agree to the new terms.  Staying out of default will make the transaction infinitely easier and happier for all.

The page is Cambrian Home Sale (www.CambrianHomeSale.com). There you’ll find:

• current Cambrian real estate market activity
• Cambrian homes for sale
• recent sales of homes in Cambrian Park
• information on finding out your home’s current market value
• Cambrian real estate market trends & statistics
• FAQs by Cambrian home sellers
• links to relevant posts on the Cambrian market
• downloadable (pdf) pre-listing packet
• and tons more!

Please visit Cambrian Home Sale for loads of helpful information specifically provided for Cambrian Park home sellers.

Let’s look at the data for October in Campbell – actives, pendings, and closeds (care of the RE Report).

While in many parts of the greater San Jose area the Days on Market (DOM) are lengthening, they are shortening in Campbell! Sales are up, but prices are still declining a bit (in several areas of Santa Clara County, prices are again inching up – this tends to happen in less expensive areas).  Pending sales are up and inventory is down.  So there are some mixed indicators but Campbell appears to be at or near “the bottom”.

The real estate market in Campbell, like in all of Santa Clara County, varies from one price point (and specific location) to the next. Have a look at the recent numbers, broken down into quartile:

Please note in the above image what a big difference there is between the top quartile and the other three price points.  Interestingly, the “hottest” market of the three is the second from the top – a good sized (but not too small) home of about 1800 square feet is the part of the housing market most likely to sell in Campbell right now.  Here are those “days on market” numbers in a graph, blended into rolling averages (7 and 90 days).

Curious that the four quartiles were behaving fairly similarly in terms of the days on market (DOM) until 2009.

What about home values? It looks as though, from the following graph, list prices hit bottom and coasted there for a bit earlier this year prior to having a bit of a rally – and then fell again recently. This could be due to the time of year – or not. We’ll really only know when we get through the winter and look backwards to see where we’ve been. “Hindsight is 20/20″ applies here, too.

Now I’ll insert some “live” charts that will stay current even into the future.

If we look at the median  list price of Campbell, CA, single family homes for sale, with all prices combined (not separated by quartile), it really looks rather bleak:

Separate it out by price quartile, and it’s less alarming (if no less true):

Let’s view them individually, then. First, the most affordable, entry level houses for sales in Campbell, California:

These (above) took a big hit, but then “skated along the bottom” for awhile.

The lower middle quartile has had a less pleasant ride:

The upper middle’s list prices have fallen more constantly – no respite, no plateau, anytime recently:

And the most expensive Campbell homes for sale experienced a good rally in summer before falling again.

A longer view of history, extending back to 2005, shows us that the top tier of homes for sale in Cambpell tends to have the most erratic path – the least predictable, the most tumultuous.

If you are a Campbell homeowner, take heart – many of the indicators point to this being close to the bottom of the market.  If you are a home buyer, interested in purchasing a house in Campbell, now is a fantastic opportunity. Prices have “rolled back” about six years in many segments of this market.

For more information, please visit the Campbell pages on my RE Report for single family homes and also for condos and townhomes.  Or contact me for a confidential, no-obligation consulation on your real estate wants and needs here in Silicon Valley.

Los Gatos offers a wide variety of home styles and size, acreage and useage. From small, modest cottages to large estates, there’s something for everyone in Los Gatos. Below, please find the links to available and listed Los Gatos homes for sale offered at two million dollars or more.  These will take you to my other website, PopeHandy.com, and open in a new window.

Los Gatos Homes between $2,000,000 and $3,000,000
Los Gatos Homes between $3,000,000 and $5,000,000
Los Gatos Homes priced over $5,000,000