What should you look for when buying a luxury home in Silicon Valley? Whether it’s a move-up purchase or a first home, there are a few tips which will be helpful for you to know going into it that will make the whole home buying experience smoother and easier.  We’ll hit on 3 areas: first geography & construction, second hyper local factors that impact market value, and finally qualities or features of the property or house itself.

It’s hard to assign an exact price tag on what constitutes an estate or luxury property, but in and near Silicon Valley, in most regions it’s the $2,000,000 and up price point (it will be less in Morgan Hill, Coyote and Gilroy – and likely more in Hillsborough).

1. Geography and Bay Area Construction: it’s different here!

The first and most important thing to understand is that real estate and housing construction vary from one region of the country (or the world) to the next.  This is true for all types of homes, actually, but perhaps more obvious in the priciest homes. Luxury real estate in Silicon Valley is a little different from similarly expensive homes in other parts of the country due to our climate, soil conditions, and natural hazards, such as earthquakes. What seems mandatory for a high end home (and might be ideal to have elsewhere) could be a problem here, so it’s helpful to literally understand the lay of the land before you get too far along the home buying path. A couple of quick examples:

• A fabulous home in Boston or anywhere in New England may be built of brick.
• Here, a brick house is seldom seen because of earthquakes – we need our houses to move and bricks are not usually too good at that!

I mention these two upfront because well intentioned friends and relatives may want to stress the importance of this or that in a property – and it may simply not apply here. (Please see article: Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley)  If you are non-native to the San Francisco Bay Area, you may have assumptions about construction or architecture that may not work here. Please just be aware of that possibility.

2. Understand the importance of hyper local factors on the market value of a property

Schools can be a main driver for home values in the luxury market as all other segments.  Home buyers may not know that the town or city boundaries are usually irrelevant to school district boundaries. Here are a few examples:

• In Saratoga  there are 3 high school districts and 4 elementary school districts.  Before buying anywhere in Saratoga, then, you’ll want to know which district is which and where you’re buying.  If you want to utilize private schools, you may be delighted to find that you can buy more house for your money in one area of this lovely city than another.  Or you may want one school area over another for any number of reasons.
• In Los Gatos there are 2 high school districts and 3 elementary school districts.
• In the Almaden Valley area of San Jose, there are 3 high school districts and 3 elementary school districts

Often the lesser public school districts will have a lower lid on pricing than the very top districts or schools, so it’s important, when analyzing the pricing of an estate home, to factor in the weight of the school. (more…)

Halloween is almost here and it is time to get creative! Sereno’s in on the spirit too.   Each year, Sereno Group Real Estate offices in the San Jose and Silicon Valley area have a Halloween pumpkin decorating contest for kids.  Winner’s pumpkins (and names of winners if parental permission is received) will be advertised in our local papers after the contest is finished.

Contest Rules:

No Carving

Decorate your own small pumpkin, or pick up a complimentary pumpkin at one of our offices in Los Gatos, Saratoga, Soquel/Santa Cruz, Los Altos, or Palo Alto.

3 age groups: toddler, early elementary, late elementary

All contestants will receive a gift goodie bag

One grand prize per age group, per office, will be awarded

Any carved or punctured pumpkins will be disqualified due to rotting

All entries must be dropped off at your nearest Sereno Group Office by Friday, October 21st at 5pm.  Judging will happen the week of October 24th during our regular real estate marketing meeting.

Where and when can you drop off a pumpkin?  Please find the office locations and hours below.  We are looking forward to seeing some wonderful kids’ creations!

Selling a house or home is usually very challenging and emotional, even under the best of circumstances.  It’s all the worse if the folks on the other side of the transaction – the buyers, their real estate agent or both – are difficult, rude, hot headed, verbally bullying, not performing on time or otherwise making the escrow and sale more upsetting than is necessary.  What can a seller or listing agent do about it? Can the seller cancel the contract and boot the bad guys out?

If there is a seller contingency, it may not be hard to do this at all. (For example: home sale subject to seller finding replacement property – they can just not look!) But that’s rare. Most of the time, only the home buyer has contingencies.

In Silicon Valley, we have 2 different contracts in use – the CAR and PRDS.  Before we can answer the question of how to get rid of nasty buyers or agents, it’s important to know and understand the contractual agreement clearly.  So the first question is “what does the contract say?“  Often the sellers don’t have an easy way to boot obnoxious agents out of contract.  But it may be possible to catch the buyers in a default (that is, not performing) via some subtlety in the contract and that may eventually enable the sellers to cancel the contract.

Both of the purchase agreements used in Santa Clara, San Mateo and nearby counties include a list of rights and responsibilities for both sellers and buyers.  They also include time frames: buyers and sellers must do these certain things within a specified number of days (some are boilerplate and others are written in and variable). So these contractual “technicalities” may be time frames which have been ignored inadvertently.

It’s no slam dunk most of the time, though, to get rid of buyers and their real estate representatives.  Usually it will be necessary to put the other side on notice that they are out of contract and to give them a chance to get back on track.  This official notice that they are at risk of having the sale cancelled is called a “notice to perform“. (more…)

In Silicon Valley, it seems the more expensive the neighborhood, the less likely it is that you’ll find a bargain. Saratoga CA home buyers who are working hard to get their feet in the door during this opportunity in the market (with low prices and even lower interest rates) are scrambling to find a creative way to make their budget line up with this high end enclave’s real estate prices.

One solution is to attempt to buy a distressed property in Saratoga – namely foreclosure or a bank owned (REO – real estate owned by the bank) house, condo or townhouse or a pre-foreclosure or short sale listing.

There aren’t many of them to choose from, which makes the few that do come available very prized by motivated buyers.

Below please find a list of all available distressed properties for sale in Saratoga, CA. This city has several school districts so if you are looking for one in particular, please contact me and we can chat about finding you that perfect home.

Note: some of the homes which have a “Saratoga mailing address” with a Saratoga, CA 95070 address actually belong to a neighboring city (or the county), such as Campbell. So you may see some homes in the list below which say Campbell, for instance. Want to read more about Saratoga and its neighborhoods? (I grew up there and graduated from Saratoga High many years ago…) Please also check out this article on my popehandy.com website: Saratoga Real Estate and Saratoga Homes for Sale”. Also check out the Saratoga California real estate market update post on this blog.

Check back frequently – this list is updated automatically!

Sometimes a  friend will call or email me and say that he or she is buying or selling a house, has a Realtor but wants my advice about the real estate purchase contract nuances, analyzing comps, or any other real estate related question. Usually it’s someone out of my Silicon Valley market area, though a few times it’s been someone closer to home.

Most professionals don’t want to be asked to give professional advice when they aren’t going to be compensated – this is true for lawyers, doctors, and many others.  But it’s also true for real estate professionals, too.  The problem, though, is not really that some folks overstep the bounds of asking for a favor. Instead, it is a matter of ethics.

I cannot interfere or meddle if you or they have a Realtor.  This is part of our Realtor Code of Ethics:

Code of Ethics
The Code establishes time-honored and baseline principles that come from the collective experiences of REALTORS® since the Code of Ethics was first established in 1913. Those principles can be loosely defined as:

• Loyalty to clients;
• Fiduciary (legal) duty to clients;
• Cooperation with competitors;
• Truthfulness in statements and advertising; and non-interference in exclusive relationships that other REALTORS® have with their clients.

Non Realtor real estate licensees also have boundaries on what they can and cannot do, too.  One big area is that we are not supposed to advice outside of our areas of competency.  I feel pretty good about a lot of areas ranging from Santa Cruz to the south to Redwood Shores to the north and Fremont, Pleasanton or Livermore on the east bay plus all of Santa Clara County.  But I don’t know Sacramento real estate, Santa Barbara Real Estate or San Diego real estate, so it would be wrong for me to suddenly delve into those arenas.  Even more so if that friend or relative asking “for a favor” were working with a Realtor or other real estate licensee and my commenting would constitute interference.

If you are shopping for a Silicon Valley condominium, townhouse, loft or other property that’s part of a home owners association or “HOA”, you may find yourself flabbergasted at some of the dues being charged in San Jose, Los Gatos, Saratoga, and all over Santa Clara Valley.  A question I hear all the time is this: “Why are those HOA dues so high?”

HOA dues may cover a number of things, including:

• common areas, such as driveways, parking, pool, fitness center, rec room, elevators, landscaping, etc.
• insurance: regular homeowners or blanket insurance but perhaps also earthquake or flood insurance
• reserve funds for planned improvements (repainting, termite work, reroofing, repaving, pool replastering etc.)
• covering the defaults from units where the owners are in or about to be in foreclosure

What is the range of pricing for HOA dues in Santa Clara County and Silicon Valley?

Depending on the age of the property and the amenities, the dues may run between $150 and $250 on the low end (newer, no amenities) to close to a thousand on the high end (The Villages retirement community has extraordinarily high dues but they may include membership in the golf course too).

“Normal” is anywhere from $350 to $400 per month for a typical condo or townhome community.

Dues over $400 per month will deter investment buyers.  Dues over $500 per month will deter almost everyone! (more…)

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

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

What about seller contingencies?

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

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

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

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

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