Right now I’m working with a number of very frustrated home buyers.  Silicon Valley real estate inventory is painfully low, and in the lower price ranges especially, that means multiple offers are fairly common.  FHA home buyers, in particular, are getting out bid and out negotiated by all cash buyers, many of whom are investors.

How low is the inventory?  Let’s have a look at January’s inventory for houses & duet homes (“class 1″ or single family homes) over the last ten years in Santa Clara County (San Jose, Los Gatos, Campbell, etc.):

2012  1,382
2011  2,007
2010  2,426
2009  4,759
2008  4,872
2007  2,698
2006  2,202
2005  1,285
2004  1,612
2003  3,119

The average January inventory of available houses over the last 10 years is 2,636.  At 1,382, January 2012′s available inventory of houses for sale in the San Jose area was just 52% of normal.  It’s not really much different now, in early February (just did a quick check on the MLS and it’s  1509 houses now – 630 have sold & closed in the last 30 days so that’s 2.4 months of inventory – a hot seller’s market).  This is what constitutes a very severe inventory shortage.

Demand hasn’t slackened, but supply has.  You know what that means – it will push prices up, it will make buyers crazy feeling.

Why is inventory so low?

A common question is this: why is inventory so low?  I believe that there are a few drivers.  First, many home owners who would like to move really need more equity to do so.  They are waiting for the market to recover.  Some may be waiting for prices to return to their previous highs (they could be waiting awhile). Others just need a little more to make the move possible at all.

Many owners of higher priced homes are holding on until the second half of 2012, when it is expected that there will be more people with buying power due to recent and upcoming IPOs.  Economists are now predicting a bit of a frenzy the second half of this year with prices in more expensive homes getting pushed up due to competition from employees of various high tech firms.  Smart buyers are trying to get in before that hits – a real challenge given the inventory situation.

Reality check: not every house is selling!

The best properties are selling well – those which are newer or nicely remodeled, in turn key condition, easy to see, great marketing with multiple photos, appropriate MLS exposure and priced aggressively.  This is what every buyer wants, the perfect house.  Most of my clients tell me that they are willing to replace carpet and repaint, but they don’t want to do anything big, such as kitchen or bathroom remodels, removing a pool, foundation or drainage repairs, etc.  No one does!

One of the easiest ways of improving your odds on being able to purchase a house is to move away from the new or fully remodeled vision of your ideal house.  Lower your budget a little, decide to prefer homes that have been sitting on the market not due to location issues, but rather to pricing or condition issues – both of which can be fixed.

For instance, many home buyers will take a pass on properties which have a pool in the backyard.  A few months back, I did some research and found that houses with pools are harder to sell right now.  Appraisers count a pool as an improvement, but many consumers view it as a liability – an ongoing monthly expense to heat and maintain and a risk if there are small children.  Many think that it will be overwhelmingly difficult to remove and relandscape a pool, so will not even consider writing an offer if the property includes an in ground pool.

Truth is, it’s not that hard to hire a company to redo a backyard; it is not invasive the way a kitchen remodel is.  You could have it done before even moving in!  The cost varies on whether you want the pool fully removed or partially as well as how to relandscape afterwards.  I have seen bids for pool demolition work under $10,000 (relandscaping extra) with more bids between $10,000 and $25,000.  Lawn and sprinklers are not so expensive to add!

The pool issue is just one example – there are many other properties for sale which are passed over due to the condition not being ideal.  Remodeling can feel a little scary but when inventory is so tight, it can be the ticket to home ownership.

Likewise with over priced properties.  Although most homes sell within a couple of percent of list price, there are exceptions.  Sometimes real estate is badly overpriced, and in those cases you may get a seller to agree to a larger price reduction – 10% may even fly.  (This is unusual, I would note. Usually if a house is not worth within 5% of list price, the seller is unreasonable and won’t accept an offer which is less. But sometimes it can work.)

Here’s to the over priced ugly duckling.  It could be your best friend when inventory is rock bottom!

Cambrian Park, or more broadly, Cambrian, is a west San Jose neighborhood or district and is one of the more affordable, high-value areas in Silicon Valley. The schools are good, the crime is low, and the commute is not too bad. For people relocating to Santa Clara County, this is a place to know about since quality education and affordability are often high priorities!

What’s the compromise for the more reasonable prices of homes for sale? Well, Cambrian doesn’t have an interesting, upscale downtown area like Campbell, Los Gatos, Saratoga, or Willow Glen.

But it does have tons of shopping & restaurants and even a Farmer’s Market. It also enjoys a top notch hospital (Good Samaritan) and plenty of parks as well as a fantastic rec center with a large park adjacent to it, the Camden Community Center, which has tons of programs (including an after school program for youth), classes, and a fabulous pool.  (My family and I lived in Cambrian in the “Cambrian Gardens” neighborhood for 10 years and loved it – our kids made great use of the community center too.)

Altogether, there are about 75,000 to 80,000 residents in Cambrian, spread throughout the three zip codes of 95124, 95118 and a little tiny bit of 95008.

If there is a “central Cambrian Park”, it would have to be near the original Cambrian Park Shopping Center, which was the first actual mall in San Jose! That area is sometimes known as Cambrian Village.  People sometimes use the three names interchangeably: Cambrian, Cambrian Park, Cambrian Village.:

Where is Cambrian Park? Map of approximate Cambrian Boundaries:

View Cambrian Area of San Jose in a larger map

Cambrian Park is a west side suburban area, part of the city of San Jose for the most part (there are a few county pockets, a bit now covered by Campbell, though), which is located adjacent to Campbell, Los Gatos, Almaden Valley, Blossom Valley and Willow Glen.

The Cambrian Park boundaries are, approximately, Foxworthy Avenue, Bascom Avenue, Carlton Avenue, Blossom Hill Road (except for a jut up in the Vista Loop area), Camden Avenue, the Guadalupe Creek (between Coleman Ave and Blossom Hill Rd.) and Almaden Expressway. There are many many zigs and zags, especially with the Los Gatos border, but I sketched out the approximate boundaries so that readers could get a rough idea of the area we call Cambrian Park – see the map above.

What are the schools in Cambrian?

Cambrian is served by 3 elementary school districts: The Union School District (in the area closest to Los Gatos), the Cambrian School District (the part to the north, closer to Campbell) and San Jose Unified School District (covering most of the 95118 section).   High Schools are served by Campbell Union High School District if the homes are in the Union or Cambrian schools area, or San Jose Unified in the rest of Cambrian. (Some school districts are elementary and middle only, with a separate high school district.  Others are “unified”, covering K – 12.)

The newest API scores for Santa Clara County’s public schools have been released as of Nov 29, 2011.  If you are unfamiliar with how API scores work, it’s on a scale of 1 to 1000.  The target number for the county is 800, so anything higher is considered good.  Getting close to or over 900 is rare and is the mark of an exceptionally excellent school.

Cambrian came out even stronger than in years past, particularly in the Union School District, where 5 out of 6 elementary schools were in the 900s and the other 1 school was at 878.

The middle schools in the Union area of Cambrian Park also scored high in 2010, with Dartmouth at 900 and Union Middle at 881. For some reason there are NO scores for 2011.

In the Cambrian School District there are 4 grammar schools, 3 of which slipped from the previous year and 1 of which went up.  Bagby was at 905 this time and the rest were in the 8s. Price Charter Middle School held steady at 864.

The high schools in this region (the Campbell Union HSD) all went up from the previous year, but only one of them, Leigh, is over 800 (Leigh has a strong 822 API).

Maps for the school district boundaries and school of attendance in Cambrian:

Map of the Union School District (loads slowly, please allow more time than seems reasonable):
http://www3.unionsd.org/unionsd/lib/unionsd/union_boundarymap.pdf

Map of the Cambrian School District of its boundaries (zoom in for better view), showing school of attendance maps also (they include the Farnaham charter School):
http://www.cambrian.k12.ca.us/oldSite/district_site/images/Cambrian_School_District_Map.jpg

The Cambrian elementary schools covered by the San Jose Unified School District are:
Almaden Elementary (782 API), Hacienda Science/Environmental Magnet Elementary (872) , and Reed Elementary (844).  The middle schools in Cambrian or covering Cambrian for the SJUSD are Castillero (795, slipped a little from the previous year – this school is in Almaden Valley) and John Muir (782).  The map of this district is not very helpful – cannot seem to zoom in:
http://www.sjusd.org/school/district/map_district/

The History of Cambrian, via the Cambrian Community Council

A friend & past client of mine (who purchased a home with me in Cambrian) very kindly told me about a wonderful article on the history of the Cambrian area which can be found on the Cambrian Community Council website.

Cambrian Area: It was always about the schools!

As with many parts of California, interestingly, the name itself goes back to the naming of a school (Cambria being another name for Wales).  This happened in the mid to late 1800s. The details of the founding of the Union School District and the Cambrian School District are shared there, too. It’s funny to think that more than a century later, the high quality schools in this San Jose neighborhood are still of prime importance and a main driver in home values.

Where was Cambrian originally?

The article further explains that the Cambrian area was an enormous stretch of land, and that Cambrian Park is within that general area (as is “Cambrian Village”, found at the crossroads of Union and Camden Avenues in San Jose).  The boundaries got defined differently at various points in time, and at times has included part of Los Gatos. (I read elsewhere that Cambrian was said to extend as far as Dry Creek Road at one point.) Some areas that were originally Cambrian are now part of Willow Glen or part of Campbell. Our local Realtor MLS defines the area as going roughly from about Foxworthy to the north to Blossom Hill in the south, Almaden Expressway to the east and Bascom Avenue to the west. (It touches Los Gatos, Almaden Valley, Willow Glen, and Campbell.)

If you live in this wonderful part of Silicon Valley, I encourage you to visit the CCC website and enjoy their colorful article, History of the Cambrian Area.

Cambrian Park Neighborhoods

Because I sell a fair amount in Cambrian and lived there, I am very partial to this area and have begun doing posts which are Cambrian neighborhood spotlight pieces.  I hope you will enjoy them.  More posts are to come but here are a few to get you started:

The Alta Vista Neighborhood, Where San Jose’s Cambrian Park and Los Gatos Weave Together Along The Base of the Hills

The “King Street” Neighborhood of Cambrian Park on the Los Gatos Border

Cambrian Park Neighborhoods: How to Choose Where to Live?

How’s the Cambrian Park Real Estate Market?

You can read about the Cambrian real estate market (as well as other Silicon Valley real estate markets in Santa Clara County) on my REReport, which is updated in the first week or so of each month.

The current RE Report for Cambrian Park Houses
The current RE Report for Cambrian Condominiums & Townhouses

What is my Cambrian home worth?

If you live in Cambrian now and are wondering about the market value of your home today, there are two approaches you can take.  You can request from me an online valuation (which will be approximate only as it’s “sight unseen”) at either of two places:

Price Your Home request on popehandy.com or at SiliconValleyHomeValue.com

Both of these come to me and I run the numbers personally for home owners who request them (sorry, this offer is not for home buyers).  I can usually turn the info around within a day, but sometimes it takes a couple of days if I happen to be travelling or otherwise overly busy.  If you make a request and for some reason don’t hear back from me within a couple of hours to acknowledge your request, please email or phone me!  Once in awhile, technology doesn’t come through and I don’t get an email alert when I should.

Alternatively, if you do not wish to share your contact info with me at this time, you can also simply browse the sold real estate listings in Cambrian on my Property Analysis page of the RE Report.  Just input an address (it’s not saved, I won’t see it) anywhere in Santa Clara County, and you’ll be able to view nearby sold, pending and available homes for sale close to your property.

What do houses cost in Cambrian?

If you’d like to buy a Cambrian home, you can browse the MLS listings of Cambrian Homes for Sale on this blogsite.  I have them listed by zip code on separate posts for houses, and below this section are the currently available condo and townhome properties which are on our MLS.

Houses for Sale in Cambrian Park, San Jose, 95118

Cambrian Park Houses for Sale in 95124

What do townhouses and condos cost in Cambrian?

Below, please browse MLS listings of Cambrian condos for sale and Cambrian townhouses for sale in 95124 and 95118:

Showing properties 1 - 5 of 14. See more 95124 zip code real estate.
(all data current as of 2/10/2012)

1. $165,000 : 3152 Kimber Ct #57, San Jose
   
   1 bed, 1 full bath

   Home size: 815 sq ft

   Lot size: 1,066 sq ft
   
2. $223,500 : 3164 Kimber Ct #70, San Jose
   
   2 beds, 1 full bath

   Home size: 886 sq ft

   Lot size: 1,148 sq ft
   
3. $245,000 : 2332 Saidel Dr #4, San Jose
   
   2 beds, 1 full bath

   Home size: 798 sq ft

   Lot size: 2,580 sq ft
   
4. $520,100 : 6030 Calle De Suerte, San Jose
   
   3 beds, 3 full baths

   Home size: 2,235 sq ft

   Lot size: 1,840 sq ft
   
5. $270,000 : 2785 S Bascom Av #22, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,262 sq ft

   Lot size: 740 sq ft
   

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

Showing properties 1 - 3 of 3. See more 95118 zip code real estate.
(all data current as of 2/10/2012)

1. $365,000 : 1118 Dinkel Ct, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 1,573 sq ft

   Lot size: 1,742 sq ft
   
2. $157,000 : 1347 Scossa Av #1, San Jose
   
   2 beds, 1 full bath

   Home size: 810 sq ft

   Lot size: 435 sq ft
   
3. $304,900 : 5685 Hollyleaf Ln, San Jose
   
   2 beds, 2 full baths

   Home size: 974 sq ft

   Lot size: 2,025 sq ft
   

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

Median List price for San Jose 95129

Average Days on Market for 95129

Inventory of houses for sale in San Jose 95129

The annual market report is out at popehandy.REReport.com and we can now learn how 2011 compared to 2010.  The median sales price for houses in Santa Clara County was off 5.3% overall.  But from one part of the valley to the next it varied wildly with 6 cities or areas finding themselves in positive territory while others were off by double digits.

In the image to the left, I’ve put into bold the cities where the median sales price of houses which sold and closed escrow in 2011 were ahead of 2010′s pricing.

What is it that makes Gilroy, Los Altos Hills, Los Gatos, Mountain View and Palo Alto “in the black”?

Most of these cities/towns are upscale, west valley communities.  But so are Saratoga, Cupertino, and Monte Sereno.

Gilroy was especially hard-hit with the housing downturn so perhaps in that case, it’s just coming back into more of a balance. (Then again, so was Morgan Hill and it’s still off by 12%.)

The LinkedIn IPO and others in the Palo Alto area drove prices up for some parts of the housing market nearby and it’s likely that this explains the positive growth for Palo Alto, Mountain View, and Los Altos Hills.  That said, it would seem that Los Altos, and perhaps even Sunnyvale would have seen stronger numbers on the same account.  Perhaps school scores are the key driver here.

Los Gatos, Saratoga and Monte Sereno often behave somewhat similarly as they are adjacent to one another and often attract similar home buyers who want good schools, a nice downtown area nearby and scenic beauty with the hills.  The annual numbers show Monte Sereno down 6.7%, Saratoga down 2% but Los Gatos up 6.4%.  With Monte Sereno, there are very few sales each month and each year (only about 4,000 residents), so there can be a wider swing without it necessarily being accurate. Saratoga and Los Gatos each have about 30,000 people who call these areas home, though, so the data is much more helpful.  Saratoga and Los Gatos both have multiple school districts, views, homes with better proximity to “downtown” and more variables – I think we’d have to dig a lot deeper to learn why these two neighboring markets are so diverse.  We might also have to look at multiple years of data to see if Saratoga spiked while LG slumped to explain the difference.

Coming in at last place: the Santa Cruz Mountains or Los Gatos Mountains area (zip code 95033), where the median list price of houses sold slipped 17% from the year before.  This beautifully scenic region covers a lot of territory and several quite different neighborhoods, some more convenient and others more remote.  It often takes much longer to sell a home in the mountains than on the valley floor but it can be a great “bang for your buck” for great schools, clean area, less crowding, etc.  The remoteness of some homes, the increased rain and other challenges generally make this part of the valley a more challenging real estate market most of the time, and in a down market that’s even more true.

Palo Alto, Mountain View and Los Altos each have regions which can be tracked in addition to the cities as a whole. If you’d like to see these numbers, please visit http://popehandy.rereport.com and then click on Yearly, then select the city, then the neighborhood and you can see how Baron Park or other areas are faring in particular (also for their monthly or quartly reports).

Areas within San Jose, like PA, MV and LA, can be tracked. Since I am very active in several of them (Almaden Valley, Cambrian Park, Willow Glen, Blossom Valley and others on the west side), I want to share those next.

The median sales price of houses which sold & closed in 2011 in the City of San Jose was down 5.9%, lower than the county as a whole.  Most of San Jose was worse off than the prior year – all except Alviso!

Alviso, which was a separate town until not so long ago, sold with a double digit increase in the median sales price – a whopping 10.6% higher than in 2010.  Affordability and investor activity are most likely the cause – more demand and less inventory than the year before. (I suspect either fewer distressed properties or that they were gobbled up quickly. Knowing would require more research.)

Downtown or central San Jose took a beating with the median sales price down 9.6%.  Why did it fall from grace?  Not everything in this area is affordable – consider that it includes Naglee Park, The Rosegarden, and a few other tony areas. I suspect it’s the number of foreclosures (REOs) and short sales but I don’t have that information at hand.  It would require a much closer look that our brief survey here to uncover what’s happening.  (We know that there are many unsold, new condos in downtown San Jose but those should not be impacting the sales of single family homes.)

In future articles or posts I hope to look at a few of these areas more carefully to see what is causing the great diversity between the areas showing improvement over 2010 such as Alviso, Palo Alto, Gilroy, Los Altos Hills, Los Gatos and Mountain View versus those which are really hurting: downtown San Jose, the Los Gatos Mountains, Evergreen, Morgan Hill, Milpitas.  Very likely it’s a combination of the distressed market activity in some areas, school scores, the pricing tier (i.e., homes between 1 and 2 million near Palo Alto) and more factors.  With real estate, it’s always local – and that’s just the starting point.

Recently I was speaking with a neighbor of mine in Los Gatos who’s a high powered lender with decades of experience all over Santa Clara County.  In the last year or two she’s been doing many more FHA backed loans, rather than conventional ones, as smart home buyers, especially first time home buyers, try to get into a house while both home prices and interest rates are at record lows.  This makes a lot of sense as it can take a long time to save 20% or more and in that time, both interest rates and real estate prices in Silicon Valley could go through the roof.  (If my kids were out of college and working, I’d be encouraging them to buy a home using FHA backed financing too.)

FHA backed mortgages do require a lot more work, though, so I extended my sympathy that she’s having to jump through so many hoops and that they are for much smaller sales prices (many areas of San Jose have dropped 35 – 40% since the market collapse).  Mortgage brokers often make about 1% of the value of the loan as their compensation, so I imagined this great loan officer spending twice as much time with FHA paperwork as on a normal loan, on a smaller priced property, resulting in “half the pay for twice the work”.

Apparently that’s not the case with FHA loans!

“It’s better for me when the buyer uses FHA”, she assured me.  Really?  “Instead of getting 1 point, we are often paid 2.5 points when we close an FHA loan.”   That didn’t seem unfair to me since there’s a lot more paperwork involved.  But consumers probably don’t realize that their banker or mortgage broker will be paid much more if the loan is FHA backed rather than conventional.

If you have saved enough money for a conventional loan product but your lender is pushing FHA, be doubly careful before deciding what to do. There are pros and cons to each loan product you buy (you are “buying” or “paying for” a loan).  Make sure that you aren’t getting FHA financing only because it is more profitable for your lender.

How’s the Almaden Valley real estate market?   Prices appear to  have been rising, but slipped some this last month. There’s not much inventory in this part of the valley so it remains a seller’s market, incredibly. A  fairly nice 4 bed, 2 bath house in most parts of the San Jose 95120 zip code will still cost about a million dollars (more if it’s in the best areas with best schools and best condition).  A smaller 3-4 bedroom townhouse with good schools will be about half that much unless it’s really young and highly upgraded.

Average Days on Market  & Sale to List Price Ratio for Almaden Valley (San Jose, CA 95120) houses in 2011:

Number of Homes For Sale vs Sold for Almaden Houses on the Market

Date is between Jan 2011 and Dec 2011

Property Sub Class is ‘Single Family Residential’

Area AreaIdName is ’13 Almaden Valley’

Results calculated from approximately 570 listings

Listings by Price Range

Date is between Feb 2011 and Jan 2012

Property Sub Class is ‘Single Family Residential’

Area AreaIdName is ’13 Almaden Valley’

Results calculated from approximately 470 listings

Sales by price range

Date is between Jan 2011 and Dec 2011

Property Sub Class is ‘Single Family Residential’

Area AreaIdName is ’13 Almaden Valley’

Results calculated from approximately 320 listings

For more info please see my Almaden Valley real estate report.

Houses, sales, pendings, prices in San Jose 95120 for November 2011 – note that they are down month over month and year over year BUT if you go back to October, they were way, way up (double digit). It’s helpful to have the “big picture” and not focus on just a small amount of data. Reviewing several months in a row we see some ups, some down – mostly down (in single or double digits) but when up, it was way up (20-40%). No easy answers here.

Trends At a Glance	Nov 2011	Previous Month	Year-over Year
Median Price	$935,000	$1,075,000 (-13.0%)	$950,000 (-1.6%)
Average Price	$1,007,750	$1,144,880 (-12.0%)	$1,123,800 (-10.3%)
No. of Sales	19	27 (-29.6%)	21 (-9.5%)
Pending Properties	31	35 (-11.4%)	45 (-31.1%)
Active	55	68 (-19.1%)	93 (-40.9%)
Sale vs. List Price	98.8%	97.0% (+1.9%)	97.5% (+1.3%)
Days on Market	47	52 (-8.7%)	40 (+18.2%)

Numbers for October – notice the big jump from September in pricing!

Trends At a Glance	Oct 2011	Previous Month	Year-over Year
Median Price	$1,075,000	$822,000 (+30.8%)	$885,000 (+21.5%)
Average Price	$1,144,880	$815,646 (+40.4%)	$910,012 (+25.8%)
No. of Sales	27	24 (+12.5%)	22 (+22.7%)
Pending Properties	35	42 (-16.7%)	41 (-14.6%)
Active	68	67 (+1.5%)	111 (-38.7%)
Sale vs. List Price	97.0%	95.6% (+1.4%)	97.4% (-0.5%)
Days on Market	52	46 (+13.6%)	36 (+42.2%)

The list price to sales price ratio moved up but days on market and number of pendings were off from the month prior – though not year over year. Compared to a year ago, prices are up and all is rosier except the days on market. Buyers may be having trouble adjusting to the rising prices in Almaden.

Trends At a Glance	Sep 2011	Previous Month	Year-over Year
Median Price	$822,000	$835,000 (-1.6%)	$931,000 (-11.7%)
Average Price	$815,646	$868,909 (-6.1%)	$967,599 (-15.7%)
No. of Sales	24	39 (-38.5%)	27 (-11.1%)
Pending Properties	42	37 (+13.5%)	34 (+23.5%)
Active	67	83 (-19.3%)	124 (-46.0%)
Sale vs. List Price	95.6%	97.1% (-1.6%)	98.3% (-2.8%)
Days on Market	46	62 (-26.4%)	37 (+24.1%)

And August:

Trends At a Glance	Aug 2011	Previous Month	Year-over Year
Median Price	$835,000	$926,000 (-9.8%)	$932,500 (-10.5%)
Average Price	$868,909	$1,038,120 (-16.3%)	$997,688 (-12.9%)
No. of Sales	39	20 (+95.0%)	32 (+21.9%)
Pending Properties	37	53 (-30.2%)	46 (-19.6%)
Active	83	93 (-10.8%)	121 (-31.4%)
Sale vs. List Price	97.1%	97.0% (+0.2%)	99.0% (-1.9%)
Days on Market	62	65 (-5.7%)	36 (+70.9%)

CONDOS

Next the Almaden Valley condo market.  It’s improved over last month!  Some quick stats:
Sales fell 0.0% from the month before, and were up 200.0% year-over-year.  Prices improved in Sep 2011 with the median price climbing 11.6% from the previous month, down 23% compared to last year. The average price rose 22.9%, a yearly loss of 15.7%.  Inventory fell 0.0% from last month, and was down 23.8% year-over-year.

Trends At a Glance	Nov 2011	Previous Month	Year-over Year
Median Price	$577,000	$495,000 (+16.6%)	$620,000 (-6.9%)
Average Price	$577,000	$498,333 (+15.8%)	$620,000 (-6.9%)
No. of Sales	2	3 (-33.3%)	2 (0.0%)
Pending Properties	3	3 (0.0%)	3 (0.0%)
Active	11	11 (0.0%)	16 (-31.3%)
Sale vs. List Price	97.5%	98.4% (-1.0%)	95.6% (+1.9%)
Days on Market	118	93 (+25.9%)	34 (+250.8%)

October:

Trends At a Glance	Oct 2011	Previous Month	Year-over Year
Median Price	$495,000	$512,000 (-3.3%)	$683,000 (-27.5%)
Average Price	$498,333	$560,667 (-11.1%)	$715,250 (-30.3%)
No. of Sales	3	3 (0.0%)	4 (-25.0%)
Pending Properties	3	4 (-25.0%)	2 (+50.0%)
Active	11	12 (-8.3%)	15 (-26.7%)
Sale vs. List Price	98.4%	98.0% (+0.4%)	95.4% (+3.2%)
Days on Market	93	67 (+40.0%)	40 (+134.8%)

September:

Trends At a Glance	Sep 2011	Previous Month	Year-over Year
Median Price	$512,000	$458,900 (+11.6%)	$665,000 (-23.0%)
Average Price	$560,667	$456,300 (+22.9%)	$665,000 (-15.7%)
No. of Sales	3	3 (0.0%)	1 (+200.0%)
Pending Properties	4	5 (-20.0%)	7 (-42.9%)
Active	12	11 (+9.1%)	14 (-14.3%)
Sale vs. List Price	98.0%	97.3% (+0.7%)	95.3% (+2.8%)
Days on Market	67	91 (-27.0%)	25 (+166.7%)

And for August:

Trends At a Glance	Aug 2011	Previous Month	Year-over Year
Median Price	$458,900	$565,000 (-18.8%)	$635,000 (-27.7%)
Average Price	$456,300	$555,200 (-17.8%)	$635,000 (-28.1%)
No. of Sales	3	5 (-40.0%)	2 (+50.0%)
Pending Properties	5	5 (0.0%)	3 (+66.7%)
Active	11	13 (-15.4%)	16 (-31.3%)
Sale vs. List Price	97.3%	98.1% (-0.9%)	98.4% (-1.1%)
Days on Market	91	103 (-11.7%)	7 (+1,121.0%)

Next let’s have a multi year look at the Almaden Valley real estate market.  Below please notice the supply & demand graph going back to late 2007. Although it’s been a “wild ride”, you can see a very clear pattern emerge that around December or January of eacy year, inventory falls (the dark gray line) and relative to the months just before or after, these tend to be “better” for sellers. What’s happening?  The available supply of homes tends to diminish over the holidays.  Prices are perhaps softer than at other times of the year.  Buyers who need to buy, do buy.  The odds of selling are actually higher, in many cases, during this time of year than others!

Here are a few quick stats from Altos Research (which will be automatically updated weekly and to which I have a subscription) – these are based on the list price of townhouses, condominiums and houses for sale in San Jose’s Almaden Valley 95120 area:

90-day stats for Single Family properties in SAN JOSE, CA95120 as of October 7, 2011
Median List Price:	$927,953	Average List Price:	$1,056,795
Total Inventory:	129	Price per Square Foot:	$405
Average Home Size:	2,414	Median Lot Size:	8,580
Average # Beds:	4.04	Average # Baths:	2.72
Homes Absorbed:	11	Newly Listed:	8
Days on Market:	113	Average Age:	36

90-day stats for Condo properties in SAN JOSE, CA95120 as of October 7, 2011
Median List Price:	$606,104	Average List Price:	$637,011
Total Inventory:	17	Price per Square Foot:	$365
Average Home Size:	1,674	Median Lot Size:	n/a
Average # Beds:	2.79	Average # Baths:	2.34
Homes Absorbed:	1	Newly Listed:	1
Days on Market:	178	Average Age:	26

The residential real estate market in San Jose’s Almaden Valley area was a “hot seller’s market” early this year due to more demand than supply but it is cooling slightly now, which will be a great relief to frustrated home buyers, but it has not been giving them the big influx of inventory they’d like to see.

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.

Some 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:

• Some properties are tenant occupied and it may be the case that you cannot even see the house or condo until after your offer is accepted. Most often it will be challenging to see homes with renters in them, but it is possible, usually, to see them prior to purchasing. (This is less true with duplexes, triplexes and four plexes. Apartment buildings are always sold “subject to inspection”.)
• Other times there may be a restriction such as 24 or 48 hours notice required for showings when homes are owner occupied.
• Most of the time, the seller has requested that any private showings, by appointment, involve ONLY pre-approved buyers. The sellers don’t want to waste their time with tire-kickers.  They want serious buyers.
• Most of the time, a seller will not want the listing agent to also represent the buyer and will expect serious home buyers to have a buyer’s agent.  If you are working with your own agent, that’s who should show the home to you.  If you have your own buyer agent, he or she can see what is involved in showing the property to you by looking at the agent version of the MLS (which includes showing instruction information and restrictions)
• Some sellers want open houses, some don’t.  For those selling a home during the holidays, often the for sale sign and lock box are removed and it becomes harder to get into these properties.
• Safety is a HUGE concern, both for home owners selling on their own and for realty professionals. Each year, Realtors and other real estate professionals are injured or killed in their line of work. If this surprises you, ask yourself how smart is it to meet total strangers at an empty house? It’s not.  If you want the listing agent to show you the house, expect to be asked a lot of questions (are you preapproved? if so, with who? how can we verify that?) and usually expect to meet the agent at the office first. Many Realtors will ask to photo copy your driver’s license prior to taking you to the home – this is for personal safety reasons. We realize that you will feel uncomfortable but please remember that real estate is risky for us and we absolutely must be cautious.

Related reading:

Do You Need a Buyer’s Agent? Or Should You Find a Home, Then Use the Listing Agent?

Silicon Valley Home Buyers: Should You Use a Buyer Broker Agreement?

Every couple of weeks I update this post to bring fresh news and data on the Cambrian Park real estate market. On Dec 9th  I went onto the MLS and ran the “months of inventory” or absorption rate of houses and duet homes (what our MLS calls “class 1″)  in “area 14″ or Cambrian area of San Jose. This time I broke it down into price points as well as the type of sale (regular, short sale, bank owned)  so you can pinpoint the pricing for the various segments of the Cambrian market. (Reminder: months of inventory reflects how long it will take to sell a property if sales continue at the current rate. Six months or so is considered “balanced”. More is a buyer’s market and less is a seller’s.)

**please note – typo below – numbers were crunched December 9th, 2011, not December 10th.

Cambrian Park (San Jose) Months of Inventory by sale type & price point Dec 9, 2011

What’s selling? “Regular sales” – non distressed. Not faring so well? Short sales.  In many price points, although many are under contract or pending, FEW – sometimes none – are making it to the closing table.  We are hearing a lot about the streamlined processes for short sales, but these numbers hint at a different reality, namely that Silicon Valley and Cambrian short sales sell but often don’t close escrow.

What is the typical kind of home and price for these neighborhoods?  Of the homes which transferred ownership in the last 30 days, a typical house cost about $600,000, has about 1600 square feet and sits on a lot of around 6700 square feet (and is “partially updated”, not fully remodeled).  The price per square foot averaged $376 but ran from $205 (distressed and on a hugely busy road) to $513 (close to the hills near Almaden and Los Gatos).  If the home you want to buy or sell needs remodeling or is “all original” it’s probably going to sell for less. If it’s in a great area, is a regular sale and absolutely turnkey and fully remodeled, it’ll sell for more.  A beautifully remodeled Cambrian house with 3 bed, 2 bath and 1200 square feet can easily run $600,000 or more if it’s a regular sale and in a good area with no “issues” (high voltage lines, backing to busy road or school etc.).

What about the pending sales?

As of this morning, there are 95 houses & duet homes which are sale pending.  Of those, 39 are regular sales (a mere 41%!), 48 are short sales and 8 are bank owned properties (REOs).  How do the pendings compare to the homes sold?  Here’s a quick breakdown for all price ranges in “area 14″ of San Jose:

ALL types Pending – 95   Sold in last 30 days – 37
Regular sales – 39   Sold in last 30 days – 32
Short sales -  48   Sold in last 30 days – 1
Bank owned sales – 8   Sold in last 30 days – 2

This underlines the fact that the short sales are getting into contract…but just not getting to the closing table! Bank owned homes are better, but the ratio of pendings to closings is much, much better with regular sales.  This explains why the regular sales are the hottest ticket in Cambrian Park right now: buyers don’t want to just buy, they want to close!

Some sellers are borderline on being able to sell without either having to bring cash to the closing table or having to attempt a short sale.  What do these numbers suggest?  That if you really want to sell and can do it – you may be best off doing a regular sale, even if you need to bring money to the title company to make it work.   (This is general advice only, your own situation may be different – please consult with your Realtor, lawyer and tax advisor before deciding to do, or not to do, a short sale.)

Here’s a snapshot view what was happening in the 95124 and 95118 areas of San Jose as of December 2nd, 2011. (My last update for this part of San Jose -  a mini update.)

Cambrian Park (San Jose) quick real estate stats for houses Dec 2, 2011

Interestingly, the hottest segment of this market is not the distressed sales, but regular ones, which are being absorbed three times as fast as the short sales or bank owned homes on the market. And it’s understandable: REOs don’t provide any disclosures and may contain surprises after close of escrow, and short sales may never close.  Just look at the huge number of pendings as opposed to the short sales which actually become a finalized transaction!  We hear that the odds are improving on short sales closing, but this graph doesn’t validate that impression at all.

Cambrian San Jose Real Estate Trends & Statistics for Sold Homes

It’s been a “hot sellers market” in the Cambrian district of San Jose for many months now with most homes that sell going fairly close to list price (1-2% off on average).  That doesn’t mean that the best idea is to always offer less than list price, though, as many homes are selling at or above list price.

If we took a close look at what’s selling and closed recently, we would find that some Cambrian houses are selling for more than list price, some right at list price and others below or well under the offered price.  Some Cambrian real estate is listed strategically low in order to get multiple offers and drive the price up.  Some are overpriced and others are priced “right on the money”.

Data on real estate solds in Cambrian area of San Jose, for November, October, September and August 2011 among houses from my Real Estate Report:

Next, October:

September:

Next, August (note that prices were higher, pending prices were higher in August as opposed to September).

Inventory is down about 32% from a year ago.  Prices are down, too, both year over year and month over month. Even so, the Cambrian real estate market is fairly hot, a good strong seller’s market as long as homes are priced well, staged well, and marketed well.  That doesn’t mean that every home is selling, but those which are nicely staged and marketed and correctly priced are selling at a good pace – and many of them get multiple offers, as the overbids attest.

Just now I checked what has closed in the Cambrian area in the last 30 days. There were 36 houses that closed. Of them 9 sold over list price, a few sold right at list price but most sold under list (and a very few sold grossly lower).

Now let’s work with Altos Research’s graphs and get a feel for the Cambrian realty market in “real time”.  These use list prices, whereas my REReport uses sold data.

First, the statistics by quartile for houses in San Jose 95118:

Next, the stats and trends by price quartile for houses in San Jose 95124:

Median list price of homes for sale in 95124 and 95118:

Very interesting that the 95124 pricing appears to be swinging upward while the 95118 pricing continues to go down.  I believe that this is mainly because the schools in 95124 have been trending upward strongly with the API scores.  Prices are also at a higher level, and those are less impacted by short sales and REOs countywide.  So it may be the result of multiple factors.  (95124 is about 2/3 of the Cambrian real estate market.)

Inventory in Cambrian area of San Jose 95124, 95118:

Surprising, isn’t it, to see how differently these two San Jose zip codes are behaving from each other?

Average days on Market in San Jose’s Cambrian area

And again, really different trends on these neighboring zips, both in Cambrian!

Another anecdotal story to share: Recently I closed the sale on my listing at 5114 Nerissa Way in Cambrian with Union Schools and Alta Vista in particular. We were listed at $579,000 and received 4 offers and sold at $585,000. Interestingly, we received 2 nearly identical “best” offers, both at $585,000. One was completely As Is and the other was almost As Is (they wanted a fumigation and pest clearance provided).  That is usually a pretty good affirmation of market value, and the property did appraise at the sales price.  The other two offers we got were below list price.  One was all cash and it was extremely low.  Buyers who are purchasing without financing sometimes misunderstand the type of discount that their all-cash status will get for them, so sometimes the worst offers are all cash and that was the case this time.

Want more info on your neighborhood, your house, or your target home to buy? Please call me!

Showing properties 1 - 5 of 63. See more 95124 zip code real estate.
(all data current as of 2/10/2012)

1. $685,000 : 1671 Zinnia Ln, San Jose
   
   3 beds, 2 full baths

   Home size: 1,410 sq ft

   Lot size: 6,240 sq ft
   
2. $549,900 : 2423 Loment Pl, San Jose
   
   3 beds, 2 full baths

   Home size: 1,539 sq ft

   Lot size: 4,232 sq ft
   
3. $639,000 : 1695 Merrill Dr, San Jose
   
   4 beds, 2 full baths

   Home size: 1,396 sq ft

   Lot size: 7,200 sq ft
   
4. $550,000 : 5051 Nerissa Wy, San Jose
   
   3 beds, 2 full baths

   Home size: 1,120 sq ft

   Lot size: 10,824 sq ft
   
5. $748,000 : 1830 Curtner Av, San Jose
   
   5 beds, 2 full, 1 part baths

   Home size: 2,191 sq ft

   Lot size: 6,000 sq ft
   

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

Showing properties 1 - 5 of 28. See more 95118 zip code real estate.
(all data current as of 2/10/2012)

1. $575,000 : 3213 Gardendale Dr, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,800 sq ft

   Lot size: 6,313 sq ft
   
2. $489,900 : 1349 Lyonsville Ln, San Jose
   
   4 beds, 2 full baths

   Home size: 1,692 sq ft

   Lot size: 9,583 sq ft
   
3. $499,000 : 3119 Santa Margarita Av, San Jose
   
   3 beds, 1 full bath

   Home size: 1,071 sq ft

   Lot size: 7,840 sq ft
   
4. $430,000 : 1560 Hillsdale Av, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,654 sq ft

   Lot size: 6,890 sq ft
   
5. $534,888 : 3183 Cheshire Dr, San Jose
   
   3 beds, 2 full baths

   Home size: 1,570 sq ft

   Lot size: 6,000 sq ft
   

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

Browse lists of Cambrian & Cambrian Park homes for sale:
Houses for sale in the 95118 part of Cambrian
Cambrian Park Houses for Sale in 95124

Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: “Get The Best Deal When Selling Your Home In Silicon Valley”
408 204-7673 (Cell)
emailto: Mary (at) PopeHandy.com
Blog: www.LiveInLosGatos.com & www.ValleyOfHeartsDelight.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.

Recently Jim & I had an appointment at a high rise in downtown San Jose near the Hotel De Anza. It was a clear day and the view was lovely, so I took a few photos and stitched them together to share.  Hope you enjoy it!  For those not from the Santa Clara Valley, this is looking east.  The hills you see are green during the rainy season and yellow-brown in the dry summer months.

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!

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.

The Little Italy San Jose Foundation is in the process of rebuilding the original Italian settlement neighborhood in San Jose, which dated back to about the 1870s, with a cultural center, authentic Italian shops and restaurants, and restored buildings.  The cultural center offers Italian language classes for adults and children both. Eventually there will be an Italian-American Historical Museum too.

Where is Little Italy San Jose?

I had mistakenly thought that Little Italy San Jose would be in Willow Glen, but that’s not the case. This little neighborhood is close to the San Jose arena in downtown and includes Henry’s Hi-Life, which was the former Torino Hotel.  You can see a map of the exact area on the LittleItalySJ site. (In the video mentioned below, we learn that originally there were 3 Italian settlements, but this one was the first. The others are Willow Glen and Goosetown.)

It’s a massive grassroots project, backed by 15 different Italian American groups or clubs, which will feature 3 archways into the neighborhood, a brick piazza, a mural underpass, a history walkway, street banners, and bocce ball courts. A few businesses are operating now, with more to come.

Volunteers have been raising both money and awareness for several years and they are making great headway. (You may recall that the old Italian cultural center, the Italian Gardens, was torn down some years ago and now is the site of apartment buildings.)  There are several projects which need donations, including the archways, bocce courts, and mural.  Or you can donate $100 or more and have an engraved brick for stage 3 of the piazza (square).

There’s a great video that can explain more about what the Little Italy San Jose Foundation is doing. Or read more on the website: LittleItalySJ.com.

Where to donate to help the Little Italy San Jose project

The Little Italy website has a number of projects that can be supported via donations:

The Archway

The Bocce Courts

The Brick Piazza

The Mural Underpass (going under Highway 87, connecting the neighborhood to downtown SJ)

Share your family’s Little Italy story

If you’d like to share some local history for this effort, your images, biographical information and more is very welcome. There’s a page for that too: http://www.littleitalysj.com/history_walk.html

On a personal note, I’m very happy to see this project moving ahead. I don’t come from Italian heritage per se but I studied Italian in college, spent a junior year abroad in Firenze (Gonzaga-in-Florence), and feel as though the Italian culture is part of my family, too.  I love the food, emphasis on family, art, music and friendliness of Italy and welcome seeing more of it here in Silicon Valley.

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)