by Mary Pope-Handy | Jan 10, 2023 | Buying Tips, Finance Information, Multiple Offers, Selling Tips, Working in real estate
The probable buyer’s value for a home is very similar to market value, as a home is only worth what a buyer will pay. If the seller wants more than that, it won’t sell. If it’s unlikely that their ranges overlap at all, we’ll have a listing that is difficult or impossible to sell.
Quick summary on the probable buyer’s value:
- The probable buyer’s value is a range of what most buyers would pay for a particular property if there was no undue pressure on the buyer or seller.
- The probable buyer’s value will be impacted by many factors, such as the timing (if there are other houses which are more competitively priced or no other inventory), the property condition, the presentation of the property, the accessibility of the property (how hard is it to see – is it vacant or occupied?), the marketing (photos, floor plans, etc.), and many other things.
- The buyer’s terms weigh heavily on what the buyer can or will pay for any home.
Sometimes it can be tricky to estimate what a home might sell for. I usually talk with my seller clients about trying to find the probable buyer’s value. The seller may have a range of prices that he or she anticipates and would accept. So too with the buyer, whose range will likely be lower than the seller’s. The key is finding where the buyer and seller price ranges overlap.

Let’s take a hypothetical case of a home worth about a million dollars (see image above). The seller would love for the property to sell close to $1,040,000. The buyer would like to purchase it for $960,000. The agent’s competitive market analysis indicates that similar homes have sold or are selling at around a million dollars, give or take a percent or two. If the buyer and seller can come to a meeting of the minds, and there’s no undue pressure on either one of them, we have (hopefully) a sale and we have the fair market value.
But as we know, sometimes homes sell for much more than they would seem to be worth, and other times much less.
What causes property values to go above or below what would seem to be the probable buyer’s value? Undue pressure can certainly cause values to rise (desperate buyer who just has to get into a house, even if overpaying or desperate seller who has got to unload a property, even if selling too low).
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by Mary Pope-Handy, Clair Handy | Jul 17, 2022 | Buying Tips, Multiple Offers
A great buyer’s agent can be hard to find and keep. Here’s what to do to enlist the help of one and how to make sure you stick together as a team and get you into your new home.
Summary:
- Only a fraction of all interested home buyers actually buy in the year they attempt to do so. For various reasons they decide to keep renting, or move away, or give up, or simply don’t write offers that are selected (they may chronically low-ball)
- Some home buyers are very serious but also very time consuming, and if it takes them a long time to buy, it can be draining for their real estate agent, and if prices are rising, it can shrink the odds of success.
- Many Realtors prefer to work with sellers when the market is hot – which it nearly always is in Silicon Valley, since most homes do sell (while far fewer buyers buy).
- Buyers who want to enlist a strong Realtor will need to be serious about home buying, able and ready (have the money and a pre-approval in place), and loyal as the starting point. Your real estate licensee may ask you to sign a buyer-broker agreement, just as home sellers sign a listing contract.
- To keep your great buyer’s agent on your team, it’s imperative that you allow that Realtor to guide you, whether it’s getting preapproved with a strong lender, deciding on priorities (must have versus nice-to-have list), or moving quickly to view houses, or taking the paperwork seriously – or any other major step. You need to be as motivated as your agent!
And communicate openly if there’s an issue. I’ve had clients tell me that the pre-approval needs to wait until they’ve been at their new job until a certain date. Whatever it is, ignoring requests given to help you without explaining the backstory won’t be good for your teamwork and could get you fired as a client. (Yes, Realtors sometimes fire their clients.)
- If you fail to do these things, your agent may not feel like your odds of buying a house are good, or that the stress associated with doing so will be higher than necessary if you stall on taking the proper steps.
- Put another way, if you hire an agent because of her or his knowledge and track record, but then don’t heed that agent’s professional advice, the relationship may not do well over the long run. Think of it like a sack race: both people have to be going in the same direction, carefully working together, or it’s not possible to move well (if at all).
Below, we will go over in more detail how to get and keep a great buyer’s agent in a seller’s market or in any market, for that matter.
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by Clair Handy | Nov 5, 2021 | Buying Tips, First time homebuyers, Multiple Offers
Getting a good deal starts with being the only offer.
In today’s wild seller’s market, Silicon Valley’s hottest homes are sometimes seeing 18-20 offers, sometimes more. For homeowners, it has been a fantastic year to sell real estate. Even a distressed property or one with multiple issues, when marketed appropriately, can receive multiple offers and fetch a good price.
Good listing agents will do their best to create the right conditions to encourage as many offers as possible so that their seller can get the best price and terms for their home. This high-volume competition for homes, known as a bidding war, is great news for sellers and tough on buyers.
Needless to say, it’s not a great market for deal-seekers. Most buyers are loosing out on multiple homes before they are able to buy. Some feel hopeless watching the prices rise and choose to give up the search. Even buyers who are bidding at or over where a listing comps out often loose to higher offers with no contingencies!
No one wants to overpay for a home, but in this market it can sometimes feel like the only option.
So what’s a buyer to do? Here are my tips for home-seekers looking for a good deal in Silicon Valley’s hot housing market today.
Before you Buy
The first step is to understand that a good deal today is not the same thing as a good deal 5 years ago. It’s not even the same as last month or last week! Setting expectations based on the current market is key. Our monthly market reports are a useful tool to begin tracking these trends while you house hunt!
In the kind of raging hot seller’s market we’re seeing, yesterday’s news really is yesterday’s news. While the comps from last week’s sales might give an idea about market value, it isn’t today’s market value. Pent up demand and not enough inventory is having a strong impact on activity. Think of it this way: if 15 people lost out on the last house that was available in a neighborhood, there’s a good chance many of them will be bidding on the next one and willing to offer more! This can be a hard pill to swallow. A good Realtor will help buyers understand the similar comparable sales, the trends, and the activity of a specific property to gauge where a home is likely to sell and how to make a successful offer.
The market is always fluctuating (watch the weekly updates on my Altos market report), but this year we’ve been seeing market activity like we haven’t seen since 2017 – it just keeps ramping up! Keep the trajectory of the market in mind and adjust your expectations to match it.
Finding A Good Deal Today
The #1 rule is that a good deal starts with being an only offer. Everything else comes from this rule!
The house that the bidders rejected.
Bargain buyers, avoid the hottest freshest listings! Instead, look at homes that have been on the market for longer than 14 days.
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by Mary Pope-Handy | May 22, 2021 | Buying Tips, Multiple Offers
Are you getting priced out of the market? If so, you’re not alone. In Silicon Valley, the prices of houses are rising dramatically right now. In some cases, homes are selling for 20% or more than list price. Recently I’ve heard of at least 2-3 homes which sold $400,000 or more over the asking price. This is happening in prices up to $3 million especially, but I’m also hearing it in the luxury tier.
With rapid housing price appreciation in Silicon Valley, home buyers who are “patiently waiting” for more inventory and just the right house to come on the market can end up finding themselves “priced out of the market“.
What does it mean to be “priced out of the market”?
In a nutshell, it means that while a few months before, you could afford the type of house you wanted (more or less), but prices have risen so fast that now you feel that you cannot buy anything at all.
If that’s the case, you feel that it’s no longer worth it to buy – so you continue to rent (or not purchase that investment property).
The waiting strategy may backfire
Have you been patiently waiting for just the right house to come on the market? Let me suggest to you that it may not be forthcoming. What you could afford a year ago is no longer possible today, and we do not see that situation changing anytime soon. In fact, appreciation would appear to be steeper now than it was 12 months ago. Waiting can be very expensive in a market like this one.
Why do buyers wait when they might do better to jump in?
Want to be a home owner in the San Jose area? Hire a great agent, but then LISTEN to him or her! (more…)
by Mary Pope-Handy | Apr 12, 2021 | Buying Tips, Multiple Offers
For years, Realtors have encouraged their home buyers to write “love letters” to go with their purchase offer on the home the buyers were trying to buy. The idea was to be more likeable so that the sellers would want to sell to them, as opposed to any competing home buyers. But as of now, the guidance from the National Association of Realtors is different: no more love letters.
What is wrong with buyer love letters?
The U.S. Fair Housing Act protects home buyers and renters from discrimination or bias under protected categories of race, color, national origin, religion, sex, familial status, and disability. (In California, there are even more protected areas.) Put another way, when a home seller looks at a buyer package, the decision should be based on the offer price and terms, not on who the buyers are.
The concern with love letters is the risk of implicit bias: that the sellers would like or dislike buyers, even unconsciously, because of non-contractual facets that are protected. While it’s not illegal for a doctor to want to sell to another doctor, it is illegal for one member of a religious group to give preferential treatment to another member of the same religious group. It’s also illegal to give preferential treatment to buyers who have children versus those who do not. Photos are especially risky as they may enable things from the protected class list to be known.
Last October the National Association of Realtors published an article for its members in Realtor Magazine on this topic, Why a Buyer Love Letter Could Turn Into a Poison Pen. This short piece admonishes that even innocuous sounding statements are problematic:
Even a mention within a letter of envisioning “children running down the stairs on Christmas morning” could stir up trouble. After all, such a statement reveals the buyer’s familial status and religion, which are both protected under fair housing laws.
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by Mary Pope-Handy | Apr 5, 2021 | Buying Tips, Multiple Offers

Multiple Offers
The real estate market in Silicon Valley is a hot seller’s market, and that means that often there are multiple offers, overbids, and sales with no contingencies. (I would say it’s the most overheated market I’ve seen in my 28 year career.) Some buyers may get it on the first attempt, but many are bidding over and over – why do they keep losing out on multiple offers?
Over the course of my career, I have noticed that often there is a consistent “spread” of offers. Most of the time, there’s a pack or band of offers at about the same level, sometimes 10% or more over list price, then a couple higher that that, and maybe one or two (once in awhile 3) at the top of the heap in terms of both price and terms which are attractive to the seller.
Not everyone is losing out on multiple offers: what are the winners doing?
- The top offer frequently has the highest price and best terms. It is 10-20% over list price or more, 25-30% down at least, and has no contingencies for inspection, loan, and most of all, appraisal (the percentage over has to do with whether the home was priced spot on the value or strategically under). But that’s not all. The winning offer’s buyers and agent followed directions. Normally that means that they come with all disclosures signed, and the buyer’s agent has even done her or his Agent Visual Inspection Disclosure. They include the proof of funds (all needed) which prove that the buyer can absorb any appraisal shortfall and is prepared to do so. ( Right now, many homes are not appraising to sale price, so this is awfully important for sellers.) Sometimes the listing agent asks for a particular contract to be used or a particular summary sheet to be filled out. The best agents do all of that. The 2nd tier offers often are incomplete – the listing agents may or may not circle back and ask about missing items, so it’s important to remember that you only get one chance to make a first impression.
- The best offer is also someone who’s been SURE that he or she or they wanted the home from the very beginning and looks ROCK SOLID. NO WAVERING, not a “last minute” offer. Any hesitation on your side will cause the seller to not feel good about your odds of closing the sale. Be consistently interested if you want the sale. A shaky looking buyer may not include their proof of funds. They don’t come across as certain about buying this property and need a few days to see the property again, or show it to their parents, or otherwise confirm the decision to buy. Their agent is not so thorough. If the TDS is not fully signed off, is the buyers’ agent trying to sneak a 3 day right of cancellation into the contract? The best buyer’s offer doesn’t look shaky – it looks dead set on buying the home and has done everything possible to convince the seller of their conviction and competence.
- The second best or next runner up is usually strong on terms (at least 25% down, few or no contingencies) but perhaps made an offer price a little under the top value. Sometimes the next runner up has a good price and mostly good terms, but something is not quite as solid – they didn’t offer to put the deposit into the escrow account the next day, they didn’t check all the needed boxes in the offer, they have a contingency when all the competing bids have none.. If the offers are tied but one buyer has no contingencies and the other has any, that will be the tie-breaker.
- Middle of the pack is usually a combination of a price where the home should appraise, a solid down payment, and few or no contingencies. It may be a price that seems “reasonable”. Buyers may feel that it is “a fair offer” or a win-win. Often the fair offers aren’t good enough to take the prize in multiple offers. If you can project what most buyers think a home will be worth, maybe you might want to consider getting ahead of that pack and seeing where the pricing trajectory will take you. The folks in the middle of the pack are usually the ones, together at the bottom, who keep losing out on multiple offers. (They will say things like “we are cautious…)
- Bottom offers are under, at, or barely over list price, and include an appraisal contingency as well as others (one for loan or one for property condition). If there’s a rent back, they want their PITI covered.
If you repeatedly find yourself losing out on multiple offers, try to see your own pattern in this spread. Is there one thing, or perhaps are there two or more things, you’re just not ready to do?
Why it is so hard
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by Mary Pope-Handy | Mar 10, 2021 | Buying Tips, Multiple Offers
In the current hot seller’s market here in Silicon Valley, most real estate agents representing the seller set an “offer date” for would be buyers and their Realtors to submit their offer packages, also known as their bids, for the property. How long does it take to write an offer? You may be tempted to do it on short notice.
The time commitment it varies – I would say you want to give yourself 2 days for a reasonably comfortable amount of time to read and absorb everything and to write your offer. It is difficult if you only have 24 hours between when you see and like a home and when the offer is due. It is possible, but only if you (and your Realtor) drop everything and only focus on this for the next 24 hours. And let me tell you, that is not fun – in fact, it’s miserable! Much better is to have several days.
Last week, though, I showed a home at 9 a.m. and turned in an offer before the 4 p.m. deadline. Never again. It was incredibly stressful and there was no way that we could all review everything as much as we should have done. The stress of it was sickening (literally) for me – I take my fiduciary obligations seriously and felt like I was cutting corners left and right to make a deadline. And I had to ignore all my other clients for a few hours to make it happen. (And no, my clients did not get it. Their offer was far too low, unfortunately.)
Most of the time, right now offers in the San Jose – Los Gatos – Saratoga – Campbell area are due on Tuesday. Once in awhile they are due on Monday and rarely on Wednesday. Seeing a potential target on Sunday is possible but it is still really hard (and about impossible if the due date is Monday). Much better is seeing it on Saturday, or, if possible, before the weekend even begins. If you can do that, it will be immensely easier and less stressful!
How long does it take to write an offer? What is the breakdown of things to do?
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by Mary Pope-Handy | Feb 22, 2021 | Multiple Offers
The deep sellers’ market continues to frustrate Silicon Valley home buyers. With scant inventory and sales, sometimes there’s very little to pick from, and many, many buyers all vying for the same property. A common question from Realtors and buyers alike to listing agents is this: “how many offers are you expecting?”
In short:
- when showings change from 30 minute windows to 15 or 20 minute viewing times, you know that there’s a lot of interest
- online, look to see if Redfin calls it a “hot home” – those are more likely to attract multiple offers (also, watch the Redfin price estimate, it changes with its website traffic)
- the ratio of disclosure packages out to offers written is about 1 in 3 for most homes (a near perfect house will have a higher ratio – perhaps 50% or a little more, a home with issues will have a lower ratio)
- it’s not an exact science – some buyers will drop out even after writing an offer, and some buyers will swoop in at the last minute
- the overbids are often proportional to the number of contracts received, but not always (an old rule of thumb is 1% per offer)
- listing agents may play down the number of offers expected since they don’t want to discourage anyone from writing
It can be hard to know. While some real estate agents advise their sellers to market the home with an unrealistically low price in an effort to obtain an avalanche of bids, most do not, but instead caution that it’s better to list on the lower end of the probable buyer’s value than the high end. If it’s a little low, the market will correct it (at least in a sellers’ market) but if it’s too high you may see no contracts on it at all.
How many offers? Communication is key
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by Mary Pope-Handy | Feb 3, 2021 | Buying Tips, Contracts & Forms, Multiple Offers
With multiple offer situations in Silicon Valley real estate bids, sometimes buyers write an offer and later decide that it’s too much or too little, or that some other change is warranted (before it’s submitted). Can you change your purchase offer after it’s written, or is it a “done deal” once you’ve signed it?
The good news is that you can change your offer before it has been given to the listing agent / sellers. Many buyers do, either because they changed their mind or strategy, or because they just got new information. What is key is circling back to your buyer agent quickly, before the email is sent.
Why would you change your purchase offer?
Awhile back, some of my buyers were bidding on a San Jose home. As I asked the listing agent more questions and we got a little more information from that agent on the numbers of offers being received, my clients wanted to improve their offer. We redid page 1 of the contract, which is where all the financial basics are listed. Their improved offer went to the listing agent and it was seamless.
At other times, even after the offer is submitted, I have had buyers ask to improve their offer. The pages of the contract which were involved in the change were redone, signed and resubmitted. This is a bit like going through the counter offer process yourself. (more…)
by Mary Pope-Handy | Jan 20, 2021 | Market Reports, Multiple Offers
It’s a little funny that when Silicon Valley home sellers and their listing agents get contracts or offers, many do not want to deal with issuing or negotiating counter offers. In many cases, it can go like this fictional bidding scenario:
Offer due date set, and let’s say there are 5 offers. Of the five, perhaps one is all cash, one is half cash, and the rest are 20-25% down. Most offers will be in a tight cluster of pricing (this is probably “true market value”). One may be far higher than the rest. Or perhaps two a little higher than the others.
- The seller wants the highest price, no contingencies, and preferably, all cash.
- If the all cash offer is non-contingent (no contingencies for inspection, loan or appraisal) and is the highest price, there will be a straight acceptance in almost all cases. No counters.
- If the best combination of cash and contingencies and pricing is the half-cash offer, most likely the listing agent will phone that buyers’ agent and ask if those buyers would match the highest price. If those buyers say yes, one counter offer will be issued and it will have a short deadline for response.
- If the “best combination” buyers say no, the listing agent and sellers will move to the next best offer, however they decide “best” looks, and phone them, giving them the opportunity to come up.
- In these scenarios, meanwhile, the rest of the buyers and their agents wait – and hear nothing in the meantime.
Once in awhile, there are a few good offers that are all neck-and-neck, and perhaps there’s one flaky looking offer at a higher price. If that happens, the listing agent and sellers may issue a multiple counter offer to most or all bidders. That used to be really common, but today, I’m finding the most typical scenario is the “one phone call” approach instead. (more…)