Normally I do not reference other Realtors’ blog posts on any of my blogs or sites, but this morning I read one worth calling out because it raises a good issue that home buyers and sellers often never consider: the ongoing exposure of sold listings’ information, videos and photos on the web will continue to be present long after the home sale is closed.

The post, by Norma Toering of ReMax Palos Verdes Realty, is entitled “Please remove my home from the internet” and can be found on the Active Rain website at the link provided above.  This conscientious Realtor sold her listing and got it closed last week.  Now the buyer, the new owner, wants all traces of the listing removed from the internet.  Many people are private and may be uncomfortable with videos and pics of their home online (even if with the last owner’s consent, decor and furnishings).  But it is nearly impossible to remove all online photos because they are syndicated or pushed to other sites where we agents have no control. 

One commenter suggested that perhaps we need another disclosure so that buyers know and understand that what’s out there on the internet cannot be removed (and for that matter, that agents don’t want to spend many hours to remove them – a challenging task for which there is no compensation).  Having photos on the web is part of marketing and once it’s done it simply cannot be undone (at least not fully and certainly not easily).  I don’t think a new disclosure is a bad idea.  Our purchase agreement forms or contracts inform buyers and sellers that there will be dissemination of information on the MLS regarding the sale status and later the closing price and terms.  It wouldn’t hurt to also warn the parties that once images are disseminated on the internet, they are very likely to remain online a long, long time.

There are a number of things which are related to the purchase and sale of real estate which require the professional guidance of those other than your Realtor, namely a legal or tax professional.  This sometimes surprises consumers.  Once I was discussing one of these areas with a prospective client and she felt quite frustrated and exclaimed, “you know the answer, you just won’t tell me!”  That was many years ago, but I’ve never forgotten it.  Many Silicon Valley home buyers and home sellers assume that they’ll never need to talk to a tax or legal professional, and if advised to do so, may balk.

So let’s talk about it.

In other states, such as New York, attorneys are very involved in real estate transactions. Here in California, though, that’s not the case most of the time.  We call on CPAs and lawyers when there’s a problem or a question which is beyond the real estate licensee’s scope.  I’ll provide a few examples.

Holding Title: Probably the most frequent question I get that I’m not allowed (or qualified) to answer is about how people should hold title when buying a home.  The purchase agreements we use (both CAR and PRDS) lay it out best and puts it in bold so that consumers don’t miss it:

“THE MANNER OF TAKING TITLE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL.” (newest revision of the CAR contract, April 2010)

Most title companies have a nifty little chart that summarizes the pros and cons of the various ways in which people can hold title.  But neither the escrow officer nor the real estate agent can tell you what’s best for you.  We know what’s most common, but that doesn’t mean it is best for you and your particular set of circumstances.  So talk to a CPA or talk to a lawyer (or both) if you do your research and are at all unsure of what to choose! (Old Republic Title has a summary of the most common ways to hold title in a downloadable pdf file, which you can access via this link.)
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Pricing is the most important element of “marketing a home for sale” that sellers and their agents do and over-pricing is the #1 reason why some homes don’t sell.  Here’s a quick list of the most common pricing errors which Silicon Valley home sellers should avoid because they often lead to overpricing:

1. Selecting the list price of the home based on what you want or need rather than on what the market will bear (the “probable buyer’s value” of your home).
2. Using dissimilar “comps”.   The best comparable properties will be within a mile  of the subject property, within 10% of the home’s size and 10% of your lot’s size,  in the same school district and ideally in similar condition and very recently sold.
3. Hiring an agent who tells you an inflated price and then using that number. Look at the numbers yourself.  A better practice is to first select the best Realtor and then arrive at a pricing strategy together. Many agents are pressured by homeowners to tell the owner what he or she wants to hear.  This is truly counter-productive! 
4. Not factoring in negative issues which could impact your home’s value, such as proximity to busy roads, high voltage power lines, the look of nearby homes and yards, non-permitted work or additions, etc. Ignoring it – or believing that buyers will – means you will be perpetually too high in your assessment of your home’s value.
5. Failing to include the current competition in your assessment of your real estate’s value.  Are there a lot of homes like yours on the market? Are they just not selling? If so, the buyers are telling you that the whole lot is overpriced!  Are there lots of short sales and bank owned homes selling nearby? Unfortunately, those are going to pull your home’s value down, so those need to be included in your assessment. It is very important to establish the probable sales price of your home by looking at the competition as well as the pending sales and recently sold homes.

Formal appraisals are not the same thing as a competitive market analysis (CMA).  An appraisal only looks at the already sold homes (and perhaps may factor in the current market climate, but not to the same degree at CMA would do).  A good CMA will provide data on the active listings, pending sales and nearby solds which are similar to the subject property.  It ideally will be very honest about any negative (as well as positive) elements that alter the likely sales price of your home.  A home’s appraised value may NOT be its market value! 

If you’d like to chat about selling your home in San Jose, Los Gatos, Saratoga, or nearby, please call or email me.  When we meet, I will give you a complimentary copy of my book, “Get The Best Deal When Selling Your Home in Silicon Valley“.

You keep reading that it’s a “seller’s market” in Silicon Valley real estate.  You hear about multiple offers and home prices getting pushed up.  There are tax credits which cause buyers to fight to buy homes.

Should you jump in as a San Jose area seller now? 

Maybe, but if you do it, do it right!  The dirty little secret that no one talks about is that most Santa Clara County homes for sale are not selling.  They sit on the market, popping up on MLS searches for month after month.

There are quite a few common myths that home owners believe about selling their property. Believe these, and act accordingly, and your chances of selling are dramatically damaged:

• my price is high, but buyers can always “make an offer”
• it’s a seller’s market, my home does not have to be perfect
• if I fix up the home to sell, the buyer may not like the changes
• it was like this when I bought it, so I don’t have to improve it now
• I have lived with (fill in the blank) forever, there’s nothing wrong with it

Getting the staging and pricing right matter tremendously.  Today let’s just focus on staging.
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A very common seller concern, understandably, is selling the home for too little money.  Oftentimes they want to price their Silicon Valley home so that they “have room to negotiate” and “don’t leave too much money on the table”. 

The trick is in figuring out how much room you really need to negotiate and at what point you’re dramatically hurting your chances of selling by overpricing. Where’s the tipping point?

Let’s do some mythical math – let’s say a 4 bed, 2 bath home in Los Gatos or Almaden Valley is worth approximately $1,000,000 (depending on terms like “As Is”, the loan type or all cash, free rent back, etc., the probable sales price range might go from about $975,000 to $1,025,000). 

If the home’s likely value on the market is worth about one million, many agents will suggest listing the home at about $999,000 in order to get buyers who may not search over the $1 million mark and to drum up interest, traffic, and hopefully at least one offer.

Saavy and experienced agents know that most homes sell fairly close to list price in today’s market (Almaden Valley houses are selling, on average, at 99% of list price and Los Gatos homes are selling at an average of 97% of list price), so most would not want to go beyond that percentage – whatever it is – since we also know that most homes are not selling.  Five percent over probable list price is ususually the upper limits of what may be wise positioning.   In the case of our mythical million dollar home, the highest that some agents would see as potentially viable might be $1,050,000 – but many others would not venture that high, feeling it creates a big risk of the home sitting on the market too long and ultimately selling for much less if the home is perceived as shopworn. They might place the upper limit at $1,025,000 or close to there.

Sellers, though, sometimes see the numbers but want to list their home higher – perhaps 10% higher or more over probable market value.  Why is this so often the case?

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