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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Sometimes when I meet prospective clients who are thinking of selling their home, I hear immediately, “we only want to sell As Is”.  In the next breath, they tell me, “and we want top dollar for our house”.  Those two are often mutually exclusive desires - that is, getting one usually means you won’t get the other.  But not always, and I’ll show you how to increase the odds of doing both.

To get top dollar, a Silicon Valley home for sale must appear to be the best value for the money and attract the most qualified buyers who step forward with a strong offer.  There are a number of things which must be done for that to happen, but one of the most important has to do with the condition and appearance of the property. Confident buyers write stronger offers than buyers who are concerned about the house or condo and potentially unknown risks.  Home buying is both a business decision as well as an emotional decision.  To get top dollar, your home has to make sense and appeal to buyers on both levels, and we’ll discuss both in this post.

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Yesterday some clients of mine asked me about seniors selling their home and purchasing another residence while keeping the older, lower property tax rate. I did a little digging and thought I’d share what I found.

There are actually two propositions involved.  Prop 60 applies to moves within Santa Clara County, and Prop 90 relates to moves between counties which are participating in this benefit to seniors (only these few, as of the date of this posting: Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, Ventura).

Some of the basics:

• Homeowners 55 and older at the time of sale of the original property.
• Homeowner must be on record both for the home that’s sold and the replacement property.
• The replacement residence must be equal to or lesser in value than the original residence.
• There are special rules for multi-family (duplex, triplex, fourplex) properties and for mobile homes.

In the most typical scenario, a senior homeowner would sell a house (or townhome or condo) and “downsize” to another, less expensive, smaller house or condo.  If the homeowner had been in the first property for a very long time, then the low tax rate would be hard to give up, but Props 60 and 90 enable that homeowner to go to another, less expensive home and carry the old tax rate along - one time, and either in the home county or in one of the participating counties. 

I have known seniors to sell a house in Los Gatos, Saratoga or San Jose and move to The Villages or to gated senior communities out of the area but closer to their grown kids and make use of these two propositions.

For more information and to get all the details, please click on the links above.

Silicon Valley home values are dropping, but it may not be as bad as you think. If you only read the headlines, you might think that the value of homes across the south bay has dropped 41% in the last year.  For example, Friday’s print edition of the San Jose Mercury news screams in its headline, “Median Home Price Dives 41%”. ( The online edition had a milder headline, Santa Clara County median home price plunges, sales rise.)

Have home prices really dropped 41% from a year ago?  No. (But it is critically important to know how much values are dropping, especially if you put your home on the market.)  The median home price is the number at which half of all sales were higher and half lower than that number.   For instance, if you had three homes sell, one at $300,000, one at $500,000 and one at $501,000, the “median home price” would be $500,000.   If you had five sell at $100,000 and three sell at $2,000,000, the median would be $100,000. You can see the problem.

What the median home price does explain is market heat, or where the market is most active.  Often, the median price tracks home values - but not always. And this is one of those times.

So how much value has been lost? It will vary from area to area, sometimes even block by block.  Loss in value will be tied to when either you bought the home or when your area was at its peak.  For many parts of San Jose and Silicon Valley, that peak was about 2 years ago, late 2006 to early 2007.

The best way to know what home values are doing is to study the comps, or the comparable home sales. It is easiest to do this in a tract neighborhood (we have no shortage of those in Santa Clara County).

For example, in the South San Jose zip code area of 95138, I took a sample tract home floorplan of 1355 square feet and charted it back over the last ten  years.    Here’s what the average price per SF was for that floorplan per year:

2009   $321.03  just one so far - $435,000
2008   $362.45   av sales price $483,870
2007   $470.55  av sales price $637,595
2006   $492.15  av sales price  $666,863
2005   $453.26  av sales price  $614,167
2004   $407.06  av sales price $551,566
2003   $332.39  av sales price  $450,388
2002   $334.46  av sales price $453,193
2001   $304.80  av sales price  $413,004
2000  $318.25  av sales price  $431,288
1999   $225.09  av sales price $304,996
1998   $205.35  av sales price  $278,249
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Do you want or need to sell your Silicon Valley home this year? If so, you ought to take the staging of your home very seriously. Often homeowners hire a Realtor (or other real estate licensee), ask for their advice on preparing the house and yard for sale, and then proceed to disregard all or most of the guidance given.

Why do would sellers hire an agent and then not take the professional advice offered? Especially in THIS market? The result is frustrating for both the homeowner (who will not realize the best possible price) and for the agent (who cannot control the condition, but who is hampered in selling the home because of it).

To be candid, the odds are that you will not be able to sell your home in San Jose, Los Gatos, or Saratoga this year. Countywide, most homes are NOT selling. Actually, let’s look at the numbers for just a moment - you will see that it’s fairly sobering.

In the Cambrian Park area of San Jose (zip codes 95124, 95118 and a little of 95008), there are 241 single family homes and condos or townhomes for sale (the “active listings”). In that same district, just 109 are pending sales. This refects about a 45% chance of selling.

In Almaden Valley, an upscale collection of neighborhoods comprising the 95120 zip code area of San Jose, it’s much worse. There are 121 houses and townhouses or condominiums for sale, and a mere 34 which are under contract to sell. The odds here are 28% that you’ll sell.

For Los Gatos (95032 and 95030), it’s 203 available vs 50 pending. Down to 24% opportunity to sell.

Saratoga (95070) has 152 active listings and just 33 pendings, or a 21.7% sales success.
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