Seller concession

Dogs playing tug of war - words seller concession, buyer concessionWhat is a seller concession? This refers to anything that the seller gives or grants to the buyer. Sellers are not the only ones who can grant concessions, but right now it’s in the news more due to changes underway in how we sell real estate and the forms and clauses we use to do so.

Concessions are a normal part of negotiation. Most of the time, both sides concede something in the arena of price and terms. In a sense, it’s a bit like tug of war in that both sides want the best price and terms, but most of the time the negotiation is a little give, a little take, unless there are a lot of multiple offers.

Seller concession examples

A good example of a seller concession would be accepting a price less than the list price. The seller concedes the desired price.  A concession can be about money, time, inclusions, or any number of things.

Other home seller concessions might include:

  • accepting an offer with a contingency, or some contingencies
  • home owner agreeing to pay for a home warranty
  • providing a credit to help with the buyer’s closing costs (if there’s a lender involved, there may be limits to that credit)
  • paying the buyer’s agent’s fee as outlined in the buyer representation agreement (there’s a box to check in the contract)
  • allowing a longer close of escrow than typical if the buyer requests it (perhaps to close escrow on their current home)
  • leaving personal property, such as the washer, dryer, and fridge – or patio furniture, a pool table, a TV, etc.
  • permitting a longer than typical timeframe to meet buyer’s needs for contingency removal or depositing money to escrow (we have run into religious reasons for this to be requested)
  • granting access to the home for visits beyond the typical 17 days
  • agreeing to remove a fixture that the buyer does not want
  • making repairs prior to close of escrow (termite work, roof leaks, or anything else that the buyer asks and the sellers agrees to cover)
  • with buyers of homes in common interest developments, sometimes the seller only orders the bare minimum, legally required HOA documents – if the buyer requests newsletters or other non-required items and the seller pays for and provides them, that’s another seller concession
  • the seller could agree to pay points on the borrower’s mortgage – this would also be a seller concession

 

Buyer concessions

Buyers sometimes make concessions, too. Some of the buyer concessions that we’ve seen included these:
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Do all home buyers purchase PMI (private mortgage insurance)?

What is PMI? Do all buyers need it? 
PMI - Hundred dollar bills, shape of house and words PMI and your mortgage

PMI, or Private Mortgage Insurance, is used when buyers have less than 20% down and are obtaining just one mortgage.

Who needs PMI? Who doesn’t?

Not everyone needs Private Mortgage Insurance.

If you have 20% to put down (your down payment), and it’s a regular or conventional loan, you do not need to pay for this insurance product.

Put another way, if you are obtaining one mortgage and it has a higher than 80% loan to value ratio, such as an 85% or 90% mortgage, you will buy the mortgage insurance.

A 10% or 15% down mortgage with just one loan will require PMI.

A way to avoid paying for this fee is to get an 80% first loan and a smaller second loan. The first loan won’t require the insurance. The second loan will have a higher interest rate, though. The advantage to this approach is that when you pay off the second mortgage, you are done with the higher cost.

On the other hand, if you have Private Mortgage Insurance and you want to be freed from it when your home value rises,  you’ll need to pay for an appraisal and hope that it comes out favorably. It can be a hassle to break loose of it.

If you’re purchasing with FHA backed financing, there’s mortgage insurance built into the product. (It’s government backed, so it’s just MI rather than PMI.)

Who is protected with PMI?

This type of insurance does not protect the consumer. Instead, it protects lenders in case of a default by the borrower.

 

Related reading:

What is mortgage insurance and how does it work? (From the Consumer Financial Protection Bureau)

Seller concession (this site)

 

 

 

The Cambrian Park Real Estate Market Update

Cambrian Park Real Estate Market graphicThe Cambrian Park real estate market remains a strong seller’s market.

For those new to the area, Cambrian is most of the 95124 zip code (south of Foxworthy) and most of 95118 (west of Almaden Expressway). It borders Los Gatos, Campbell, Willow Glen, and Blossom Valley.

The Cambrian Park Real Estate Market

The chart below is from the RE Report.

 

Trends At a GlanceApr 2024Previous MonthYear-over-Year
Median Price$1,905,000 (+6.4%)$1,790,000$1,605,610 (+18.6%)
Average Price$1,965,730 (+4.6%)$1,878,510$1,710,090 (+14.9%)
No. of Sales49 (+22.5%)4050 (-2.0%)
Pending44 (-2.2%)4537 (+18.9%)
Active32 (+220.0%)1026 (+23.1%)
Sale vs. List Price113.8% (+0.3%)113.4%107.9% (+5.4%)
Days on Market(+5.7%)8(-8.5%)
Days of Inventory19 (+152.5%)815 (+25.6%)

 

The Cambrian market continues heating up. Check out the average sale price by month, including the partial month of May (so far).

 

Cambrian average sale price for single family homes (houses and duet homes)

 

If this continues in May, it will be one of the highest priced months ever (second only to April 2022). Cambrian has a lot of enduring value that makes home buyers decide that it’s worth fighting to get a foothold there.

 

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Willow Glen real estate market in San Jose

Willow Glen real estate market is a strong seller's market. This Willow Glen sign is from the downtown business district.The Willow Glen real estate market in San Jose remains a strong seller’s market.

  • Average and median home prices are up monthly and yearly.
  • Homes are selling in 11 days on average – super hot.
  • The sale to list price rose again to 108% in April (up from106.7% in March)

The best priced homes with no location or condition issues continue to sell quickly and with multiple offers and overbids.

Willow Glen Real Estate Market Trends: Single Family Homes

Willow Glen home prices area up monthly, but the average sale price slipped annually. The sale to list price ratio is rising, though, and the market is hot for homes priced aggressively, with good locations, and good (remodeled) condition.

Click for the complete Willow Glen real estate report:

Trends At a GlanceApr 2024Previous MonthYear-over-Year
Median Price$2,195,000 (+9.2%)$2,010,000$1,975,000 (+11.1%)
Average Price$2,287,280 (+2.8%)$2,223,900$2,192,020 (+4.3%)
No. of Sales36 (-2.7%)3731 (+16.1%)
Pending35 (+9.4%)3238 (-7.9%)
Active40 (+53.8%)2648 (-16.7%)
Sale vs. List Price108.0% (+1.3%)106.7%103.3% (+4.6%)
Days on Market11 (-38.7%)1814 (-22.6%)
Days of Inventory32 (+52.8%)2145 (-28.2%)

and a month earlier:

 

Trends At a GlanceMar 2024Previous MonthYear-over-Year
Median Price$2,010,000 (+9.5%)$1,835,000$1,875,000 (+7.2%)
Average Price$2,223,900 (+14.7%)$1,938,830$1,985,010 (+12.0%)
No. of Sales37 (+48.0%)2535 (+5.7%)
Pending32 (+6.7%)3027 (+18.5%)
Active26 (-3.7%)2745 (-42.2%)
Sale vs. List Price106.7% (+2.4%)104.2%104.5% (+2.1%)
Days on Market18 (-16.6%)2216 (+11.7%)
Days of Inventory21 (-30.3%)3039 (-45.3%)

 

 

Below please find a market profile and then a couple of charts for the Willow Glen real estate market for houses and duet homes (attached single family homes – not duplexes), care of Altos Research, to which I have a subscription. Altos uses list prices, not sold prices. The data is automatically updated each week, so please bookmark this post and come back often!


Data from Altos Research for Willow Glen Real Estate Market Trends – San Jose 95125

In the latest update, Altos says single family homes are in a strong seller’s market with rising market action, and a decrease in much needed, perpetually low inventory. As of today, 35% have taken price reductions.

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Cupertino Real Estate Market Trends and Statistics

Cupertino real estate market will be more expensive for view homes in nearly all cases -image taken from Ridge VineyardsHow’s the Cupertino real estate market? The Spring market is underway and the market is hot. The best homes are getting multiple offers and high overbids. Prices are up both monthly and yearly.

Our inventory has been extremely constricted, so it looks like these market conditions will persist for the near future, at the very least.

Cupertino Real Estate market – Closed Sales and Trends at a Glance

Here are the most recent real estate statistics, via our Cupertino Real Estate Report. The market is HOT!

(If you’re viewing the chart below on a mobile device, please swipe horizontally to see all columns.)

 

Trends At a GlanceApr 2024Previous MonthYear-over-Year
Median Price$3,450,000 (-3.8%)$3,588,000$2,800,000 (+23.2%)
Average Price$3,529,810 (-0.7%)$3,553,500$3,113,500 (+13.4%)
No. of Sales33 (+57.1%)2111 (+200.0%)
Pending15 (-48.3%)2917 (-11.8%)
Active17 (+112.5%)814 (+21.4%)
Sale vs. List Price110.8% (+1.2%)109.4%107.7% (+2.9%)
Days on Market10 (+21.5%)812 (-17.8%)
Days of Inventory15 (+30.7%)1137 (-59.5%)

 

Cupertino real estate market via the Altos Research weekly charts (they use LIST prices, not sale prices):

 

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Saratoga CA Real Estate Market Update

Orchard and Hills in Saratoga, California - photo for article on the Saratoga CA real estate market

Orchard and Hills in Saratoga, California

The Saratoga CA real estate market is a strengthening sellers’ market for single family homes :

  • the average sale price rose both monthly and annually
  • inventory of Saratoga houses for sale is up both month over month and year over year
  • the sale to list price ratio slipped from 106.8% in March to 106.3% in April, still a strong seller’s market

How’s the Saratoga CA real estate market?

Saratoga has a diverse real estate market due to a wide range of home prices, square footage, lot sizes, school districts, and more. The luxury tier, generally $4 million and up (but in Saratoga, that’s really still just a house in an expensive part of town) normally moves slower than other price points. Saratoga’s entry level housing is usually the strongest. If the numbers swing wildly at any given month, it could be that more or fewer homes in a particular school district and pricing tier.

To really understand the Saratoga CA real estate market, you’ll need to get hyper local data for that home’s pricing tier, school district, and any other impactful data points.

 

Trends at a Glance for the Saratoga CA Real Estate Market

Here’s a quick overview from the RE Report details below or please view the full data here.

Trends At a GlanceApr 2024Previous MonthYear-over-Year
Median Price$4,215,000 (+0.4%)$4,200,000$3,780,000 (+11.5%)
Average Price$4,533,660 (+5.4%)$4,299,500$4,008,360 (+13.1%)
No. of Sales18 (-14.3%)2122 (-18.2%)
Pending22 (+69.2%)1319 (+15.8%)
Active35 (+66.7%)2125 (+40.0%)
Sale vs. List Price106.3% (-0.5%)106.8%98.7% (+7.6%)
Days on Market29 (+24.8%)2351 (-43.5%)
Days of Inventory56 (+88.0%)3033 (+71.1%)

 

Altos Research real estate market data for Saratoga, CA single family homes

Next, a quick glance at the Altos Research market profile for a quick summary of the Saratoga CA real estate market conditions. Altos uses LIST prices, not sold prices, for this chart and the others, below.

Market profile for Saratoga CA 95070

 

Real-Time Market Profile Saratoga, CA 95070

 

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Almaden Valley Real Estate Market Conditions

Almaden Valley Real Estate Market Conditions San Jose 95120 - photo with Mt Umunhum in backgroundThe Almaden Valley real estate market is experiencing some up and down, but remains clearly in a seller’s market and much stronger than it was one year ago. Inventory remains perpetually low, so the best homes in great locations are selling like hotcakes while buyers are passing over others that may need more work.

Almaden Valley Real Estate Market Conditions: Trends at a Glance

First, a look at the residential real estate market statistics for Almaden, or San Jose 95120 from the Real Estate Report (a subscription that uses closed / sold data).

Please note that there are 28 closed sales and just 26 active – that ratio tells us that the houses in 95120 are in strong demand. The sale to list price ratio is just over 106%, so we know buyers are competing to get these properties, and most are selling with multiple offers.

 

Trends At a GlanceApr 2024Previous MonthYear-over-Year
Median Price$2,327,500 (+5.5%)$2,205,750$2,350,000 (-1.0%)
Average Price$2,383,930 (+0.6%)$2,370,700$2,357,370 (+1.1%)
No. of Sales28 (+27.3%)2227 (+3.7%)
Pending30 (+50.0%)2021 (+42.9%)
Active26 (+52.9%)1723 (+13.0%)
Sale vs. List Price106.2% (+0.3%)105.9%101.4% (+4.8%)
Days on Market10 (-26.7%)1420 (-47.0%)
Days of Inventory27 (+16.2%)2325 (+9.0%)

 

Altos Research charts for Almaden Valley real estate market, single family homes segment (more…)