So many variables impact the real estate market, both here in Silicon Valley but across the country. Employment, interest rates, the stock market, the availability of real estate inventory, the confidence of the buying public (say, in the wake of a terroristic attack, announced layoffs, or global conflicts like the invasion of Ukraine) all can move the housing market one way or the other. But they’re not the only forces that do.
Weather and natural disasters can likewise have a pronounced effect on a local housing market too.
My Experience: The ’89 Quake
Anyone in the San Jose area in September of 1989 will vividly recall the Loma Prieta Earthquake, which occurred in the Santa Cruz Mountain Range between Los Gatos and Aptos. Jim and I were buying our first home at that time, in San Jose’s Cambrian district, and in fact did our “final walk through” just two hours before the quake hit.
Our closing got delayed as the lender refused to fund the loan until the home was professionally checked out by an appraiser. They’d seen images of the Bay Bridge, homes off their foundations, fallen chimneys and other disastrous structural failures and weren’t taking a chance on any home!
Luckily for us, the property we were in contract for was essentially unscathed. It was not a young home, but built by a respectable builder, and more importantly it was on solid ground. Thankfully the house was fully vacant since we were close to the planned close of escrow, so there was no fallen furniture or broken glass in the carpeting and most everything was visible and easy to check later for damages. We did close, though it was about 10 days later than expected.
For listings not yet sale pending, it was already a slowing market and the beginning of a correction, but the earthquake plunged the market more deeply into the doldrums. At least for awhile.
Weather Forecasting the Market Activity
There are similar stories with markets all across the state, country, and globe after similar disasters. More recently here in California we’ve seen major impacts on various markets after fiercly destructive wildfires. But mother nature can effect the housing market in much more subtle ways as well, no disaster necessary.
The sign off and the closing happen at the end of the sale pending period. But are they the same thing? And do they happen on the same day? In our area, they are not the same thing and normally they would not happen on the same day.
Sign off
The sign off is an appointment in which home buyers and sellers sign the final papers which will lead to closing a few days later. Usually the appointment takes place at the title company which is also handling the escrow – that is the norm in northern California. Sometimes either buyers or sellers cannot be available during regular business hours. In that case, they have an option of paying for a mobile notary to do the signing at their home or some other convenient location.
(In some states, the closing happens when all parties sign, and both sellers and buyers meet at the same time for the official paperwork. Not so here in Silicon Valley, though.)
The closing, or close of escrow, takes place when the deed is recorded with the county at the County Recorder’s Office. The title company records all of the deeds scheduled to close that day for that firm electronically.
Once a particular property has been recorded, we say “it is on record”. Someone from the title company will call or email the clients or the real estate agents (or both) to confirm that it’s on record. For short, they often say “we have confirmation” – meaning that they’ve been told that the deed was recorded. The property transfer happens when the deed is recorded – not when the papers are signed.
In the western U.S., real estate sales are usually done this way. In the eastern U.S., though, the closing and sign off are the same day, with buyers and sellers all at the same table, and the sale concludes when the paperwork is all signed.
The sign off is where home buyers or sellers normally meet with a notary and sign the closing documents. This is not necessary for a buyer with a cash offer, but it is required when there’s financing. Who attends this appointment, and when is it?
Sign off – quick summary
Normally this takes place 2-3 days before the close of escrow.
Sellers and buyers are not all at the same table. That can happen in other states, but it’s a different set of customs.
Present at minimum are the buyers or sellers, and the escrow officer who has a notary license or another notary.
Often the buyer agents are there for the buyer sign off, or the listing agents for the seller sign off, but this is not required.
In some cases, the lender may also join the buyers at their appointment to explain any questions about the mortgage.
Principals will be asked to show their ID, sign a notary book, and provide a thumbprint in the notary book.
It’s really not ideal to bring children to a sign off, but sometimes it cannot be helped, and many title companies have coloring books or some other amusement (but don’t count on it, in these post-COVID years, they may not be as available, so ask if you think you’ll want that)
How long will it take? For sellers it’s often quick, around 30 minutes. For buyers with 1 loan, many times it is about an hour to sign. For buyers with 2 loans (first and second mortgage), it will take longer. It can take much, much longer if you read every word! If the loan docs get to title with time to spare, you may be able to review them in advance.
There are some variations on how things may play out. If regular work hours are not possible, the title company can arrange for a mobile notary to go the buyers’ or sellers’ home or elsewhere, such as a coffee shop, to do the signing. (more…)
Where do you look for the best MLS information when you’re house hunting online? Consumers have many choices, but they aren’t all equally comprehensive or updated.
Today we’ll touch on these relevant options:
Real estate agent and brokerage IDX feeds (and what is an IDX feed or syndication)?
Large portal MLS information (Realtor.com, Zillow, Redfin, and many others)
The MLS information from MLS Listings
Quick answer, for those who don’t want to read this whole article: the very best, most accurate and most often updated site for consumers wanting MLS information is via an automatic email, set up by your agent, from the public branch of our agent-supported Multiple Listing Service or MLS, which is MLSListings.com. For the full data, you must get your agent to share it with you – it won’t all be there if you just go to that website. I’ll explain below.
Syndication, Members Only listings, IDX, VOW, data sharing between MLS organizations
Syndication refers to the listings’ info being sent out to third parties for display on other sites. With syndication, as the listing agent updates the status to pending, sold, canceled, etc., the feed is supposed to automatically update. Sometimes there’s a lag or a glitch, though, so the info may not be as reliable (or up to date) for that reason.
Members Only listings in MLS Listings are not syndicated. They might be “Members Only: Do Not Show” (think of it like a Coming Soon) or they could be “Members Only: Show” (for whatever reason, the seller wants limited exposure – could be temporary, as the Days On Market do not accrue) (more…)
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.
Real estate is always shifting, and now that is more true than ever. Will buyer’s agents become obsolete with the cataclysmic transitions we’re facing? Today we’ll touch on:
The role of expertise in real estate transactions
What do buyer’s agents do?
The impact of the recent NAR settlement and industry changes coming
Do consumers value expertise? If so, don’t expect that buyer’s agents become obsolete.
After all, a lot of data is online. The thinking goes, travel agents are mostly gone and journalists are being replaced by bloggers. It’s possible that this will be the case for buyer’s agents in the future, as there is a trend in thinking that there are no real experts if everyone has access to information.
A few years back, I heard about a book that takes on this concept regarding expertise and it really resonated with me. The title is “The Death of Expertise: The Campaign against Established Knowledge and Why it Matters“. Confession: I have not yet read it, but want to do so. I did hear it discussed on KGO Radio by Pat Thurston, who was one of the radio personalities there, and her take on it was that it presents the concept that everyone’s opinion is as good as everyone else’s opinion.
That certainly does happen in real estate, along with the persistent idea among some consumers that buyer’s agents don’t really add any value other than unlocking doors. (I wrote about this idea that “it’s all on the web” so buyer’s agents aren’t perceived to be needed back in 2013.) Even this morning I had someone email to ask me if I would split my commission if they bought a home with me and would “do all the research”. The answer, by the way, is no.
You can have a 20 or 30 year veteran Realtor with oodles of transactions, but a home buyer armed with a real estate app may not always know what he or she doesn’t know. And that’s dangerous. Information does not equal knowledge or skill.
Will buyer’s agents become obsolete? Before thinking that they will, learn what they do and what they know and why their clients appreciate them.
What do buyer’s agents do that consumers don’t do as well for themselves?
A good buyer’s agent will be able to help with these items (and many more, depending): (more…)
The “price per square foot” data point can be useful between uniform or very similar homes, but using it with dissimilar properties (size, lot size, school districts, and other elements) will result in a wrong valuation and upset home sellers and listing agents.
An important real estate principle to know is that smaller homes nearly always sell for more on a per square footage basis than 10-15% larger houses in the same area. The reason why is that kitchens and bathrooms are the most expensive rooms, but often there is just 1 kitchen and a similar number of baths with smaller vs larger homes.
Even if the properties are comparable in many ways, more than 10 or 15% difference in square footage can make the price per SF very wrong.
When to use the price per square foot data set
If evaluating condos in the same complex, such as a 2 bed, 2 bath with 1,000 SF, it makes sense to compare units in the same complex with 900-1100 SF (plus or minus 10%). If nothing is available, going to 15% may work, but the data won’t be as reliable – 850 – 1150 SF.
In a subdivision of houses that are all about the same age and with similar lot sizes, the target would again be 10% of the home size. In a 2,000 SF house, that means plus or minus 200 SF, ideally, but not more than 300 SF.
If a 1500 SF house is included in the analysis of a 2,000 SF house, it will mislead the home owner because the 1500 SF house will sell for more on a per SF basis than the much larger 2,000 SF house. The seller will overprice the home if doing that.
As one factor among many, it’s completely fair to include the price per SF when trying to determine what a home’s probable market value ought to be, as long as it’s within that 10% range, ort 15% at the very outside.
Other factors that influence valuation – beyond the price per square foot
Remember, too, that a house, condo or townhouse isn’t worth one exact number, but a range – because the terms involved also impact the sales price. Although price per square foot is one way of finding approximate value, often is not the best, especially if you use it alone, because there are other factors besides the square footage of the house. Here are some of the other factors that can mess up that valuation based on price per square foot alone:
Location and lot / land differences and price per square foot
precise location (view, proximity to something undesirable)
for example, one house is next to tidy homes, but another has a junky neighbor or two
one house is internal to a neighborhood, and another is on a busier road
one residence backs to commercial property or a tall apartment building, which another backs to a single story house
whether the street is a good one or full of parked cars & RVs
whether the house is below or above grade/street level (most people don’t prefer being down from the street)
lot size and usability (flat vs sloped)
lot shape & access (flag lots may sell for less than homes directly on the street)
A price mirage happens when the list price of a home for sale is far below what the sale price will be. Right now this is a very common strategy from listing agents and sellers, and buyers need to know about it.
Those homes are not really available to many of the home buyers who are excited about them and think that it will sell at or only 10% or so above list price. The gap is much higher than that, particularly if a property sells in the first two weeks. We sometimes hear of homes selling 20% or more over list price.
What is a price mirage?
Sometimes the listing agent and sellers very intentionally deeply underprice a property by 25% or more (to see how far the market will bid it up). I can think of a few local Realtors who are well aware that most of the buyers they attract with artificially low prices cannot truly afford their listings. But those buyers will crowd the open house and make offers which are low (a waste of many people’s time).
The articles about homes selling for $1 million or more over list price are becoming more common. Recently we were working on an offer along those lines, but the house sold for far more than that, about 49% over list price. It’s staggering.
Often the home is priced a a little low, but so many buyers pounce that the price gets driven up and out of reach, and that can surprise everyone. In these cases, let’s say a house looks like it should be worth $1,035,000, but the home goes on the market at $1 mil even, but buyers are so desperate that it gets many offers and sells for a little over $1.1 mil. That is common and has been for years. That’s not a price mirage because the list price wasn’t tremendously less than what appeared to be the probable sale price.
What we are seeing now is along the same lines, but with lower list prices and higher sale prices. Buyers cannot look at the list price and know if they can afford the property or not. They wonder if it’s underpriced by 10%, 30%, or even 50%?
What should home buyers do about cheap looking homes that might be a price mirage?
If you’re mulling around a home purchase, it’s a good idea to formulate a plan. Preparing to buy your first home will take some time, even before you see any homes. Just thinking about it can be a little overwhelming!
In this article we’ll share tips for folks interested in buying how to get started:
video discussion of the first three steps
online research (various areas of interest to you)
talk to folks you know who have recently purchased about their experience so that you can learn what to anticipate
talk with a Realtor (or a few of them) and learn how they work
a list of things to consider researching when considering home buying
a list of other resources at the end
Preparing to buy your first home: 3 steps
When preparing to buy your home, slow down, make a plan, do some research online, talk with recent home buyers, and then speak with a Realtor (or two or three).
Once you select a Realtor, he or she can help you to create a path forward. Often they’ll ask you about setting priorities (and as much as possible, for you to rank them), your budget, your tolerance for doing repairs, your desired timing, and a few other things.
The folks who get into the most trouble with a real estate purchase are those who do it spontaneously.
What kind of research should be done when preparing to buy a home?
Many times, homeowners look at the size of their home and assume that all living space is equally valuable on a price per square footage basis. That’s not always the case.
Expansions: Distinguishing Square Footage
In Silicon Valley, we frequently see tract neighborhoods of smaller houses, say 1,000 to 1,500 SF, in which additions have been made. Sometimes it’s an unattractive “pop-up” or “box on the top” which doesn’t match the home’s design or the look of the neighborhood. Other times it’s a tasteful expansion which blends seamlessly into the home. So how differently will these be priced?
Helping nice folks to buy and sell homes in Silicon Valley
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES
Christie's International Real Estate Sereno, Los Gatos, CA 95030 408 204-7673 Mary@PopeHandy.com License# 01153805
Clair Handy, Realtor
GREEN
Christie's International Real Estate Sereno 214 Los Gatos-Saratoga Rd Los Gatos, CA 95030 ClairHandy@sereno.com License# 02153633
Mary & Clair sell homes throughout Silicon Valley: Santa Clara County, San Mateo County, and Santa Cruz County. with a special focus on: San Jose, Los Gatos, Saratoga, Campbell, Almaden Valley, Cambrian Park.
The real estate search
Use this link to browse properties which are for sale, under contract (pending) or sold. Want to view only homes which are available now?
Mary Pope-Handy, Realtor ABR, AHWD, CIPS, CRS, SRES Christie's International Real Estate Sereno DRE License #01153805 408-204-7673 mary@popehandy.com “Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Clair Handy, Realtor, GREEN Christie's International Real Estate Sereno DRE License #02153633 408-721-6160 clairhandy@sereno.com “Helping nice folks to buy and sell homes in Silicon Valley”
This is the Valley of Heart's Delight blog , covering Silicon Valley real estate - Santa Clara County, San Jose, Los Gatos, Cupertino, and nearby communities in the South Bay Area and lower Peninsula. Find info on neighborhoods, disclosure issues, buyer and seller tips, and housing market conditions in the west valley and most of the county.Please also see my other websites and real estate market statistics site, which are listed in the sidebar, above.
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Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES Sereno DRE License #01153805 408-204-7673 mary@popehandy.com
“Helping nice folks to buy and sell homes in Silicon Valley since 1993”
So many variables impact the real estate market, both here in Silicon Valley but across the country. Employment, interest rates, the stock market, the availability of real estate inventory, the confidence of the buying public (say, in the wake of a terroristic attack, announced layoffs, or global conflicts like the invasion of Ukraine) all can move the housing market one way or the other. But they’re not the only forces that do.
Where do you look for the best MLS information when you’re 
