Working in real estate
Awhile back, I visited the Suddath Relocation Service’s warehouse in San Jose. Charles Canfield, my sales representative there, had invited me to come by and have a look. My direct experience with moving companies hadn’t included a behind-the-scenes visit to to their work and storage site, so I took him up on the kind offer and got a tour of a different sort. During my visit, Charles showed me how they get items labeled, organized and stored so that things are both secure and find-able when it’s time to take them out of storage and off to a new residence. What follows below are some photos of the visit, which I hope you find interesting.
When first approaching the warehouse, it’s no surprise to see some trucks by the bays to load or offload goods.
After seeing the lobby and conference room, Charles took me to the warehouse, which is (not surprisingly) climate controlled to protect the items being stored. There I saw as yet unmade boxes, paper for wrapping fragile items, sheets of what look like clear plastic wrap for bundling things together. I was amazed at the immensity of the whole thing – the room, the materials, the containers. It all struck me as vast.
If for some reason you find yourself in a very big hurry to get your Silicon Valley home on the market, you may not know where to begin or how to get it done. Today I’ll give you a quick list of the best things to do, and in order, too!
First, hire a great, full time real estate professional. This Realtor or other sales person will be your partner from the beginning and can give you insight and advice on the best place to spend your time and money for the best return on investment – and which items are the most important in your house or condo’s particular case, given the time restrictions. Your Realtor can also help you with time lines, managing pre-sale inspections (worst case, they can happen after your home is on the MLS), etc. Sometimes home owners begin on their own and make less than ideal choices when choosing paint colors and so on. Since part of the service provided when you sign a listing agreement is good advice, do hire first!
Second, think clean, uncluttered, and “good working order”. The rest of the tips all fall under the broad umbrella of staging – mostly de-cluttering, cleaning, and making sure that things work as intended. Perhaps you won’t be able to make everything immaculate and perfect, but in many cases, with even a few days you can hit the biggest areas fast.
Make a list of everything that needs some kind of minor repair or adjustment. Getting those items fixed will send a message to home buyers that your house or condo is turnkey and not a “fixer”. It may not be conscious, but if home buyers find doors that squeak loudly, doorbells or lights that don’t work, they begin to wonder if there are any big ticket items that are in need of repair or replacement, too. Hire a handyman or contractor as needed so that your home gives the right first impression.
Moving at lightening speed, with the listing signed today and the home on the MLS tomorrow? This isn’t fun, but I’ve done it with sellers at times. In those cases, you may have one frantic 24 hour period. Think of it like you do when entertaining relatives who may go anywhere in your home…
What would you do if you had one hour’s notice before company would be arriving at your doorstep? Here are some quick fixes for the hurry up sale:
- Be armed with large boxes or laundry baskets so you can begin to collect things where are where they do not belong and get them at least generally to where they do.
- Get the floors, counter tops and surfaces almost completely clear. If it’s newspapers, throw them out (show no mercy!). Have a box or basket for each bedroom or room of the house and put the items into the correct basket as you go through the house. For example, you could have one box for the garage, another for the master bedroom, another for the hall bath, etc. Bring all boxes into each room that you are “clearing” and take just one room or area on at a time. You may be moving 6 or 8 boxes or baskets from one room to the next, but it’s a faster way to sort and move things.
- If there’s no time to actually put all of these items away, do what most of us did in college: put the basket or box in the closet. And then close the door. No, it’s not ideal. It’s a quick fix and it will do the job 90-95% of the way. If you’re in a rush, it’s got to be good enough. Ditto that with the garage. If all else fails, put things into the garage. Some buyers may chuckle, but yours will most certainly not be the only house where they see this happen. If you have a truly excessive amount of stuff, get a pod or use a service such as Door to Door, where they bring a container to your driveway, you load it, they then take it away and you get it back when you’re ready to move. Continue reading
What is the function of a title company or title insurance company in real estate purchases or refinances? In Silicon Valley, and the San Francisco Bay Area and northern California generally, title companies perform two specific services:
- provide title insurance for real estate being bought or borrowed against
- provide escrow services, acting as the neutral third party which takes in the deposit money and holds it during the escrow period, disbursing all funds when escrow closes and having someone go to the county recorder’s office to record the deeds to complete the sale
Title insurance companies research the title history, find out what recorded easements may exist,reveal any encumbrances (leins, clouds on title, etc.). An escrow officer from the title company is usually the professional with a notary’s license who will sign off home buyers and sellers on the final documents, too.
There are many other services that title companies provide. Many people wonder how to hold title, and while neither your Realtor nor your escrow officer can advise you on how to do so, the title companies all have a little 1 page handout explaining the major concepts for each option on how to hold title.
If you need to sign off on the final documents out of town or even out of the country, the escrow officer and her or his support staff will work with you to coordinate it. (It can be a little tricky if overseas and outside of the U.S.).
If you are selling your house or condo and discover that an old loan that you paid off is still showing up in the preliminary title report, the escrow officer at the title insurance company will work to get it resolved and removed.
The customer service department at title companies can research the chain of title, too. Sometimes it’s quite interesting as the chain brings you back to the time of patents and land grants, with hand written deeds in a style of cursive which is somewhat foreign to us today.
There are many other things that title companies do – big and small – and most of them are “behind the scenes” that few of us ever witness directly, but without which no one would be able to close out sales with the safety net of title insurance which we value so much.
Title insurance can be a confusing concept, but I wrote about it elsewhere on this site.
In Silicon Valley, most of the licensed real estate professionals belong to local, state, and a national trade group. There’s a name for members of these associations, in which dues paying members promise to abide by a code of ethics. Do you know that the name is? You’ll hear various things, even out of members: Realtor, Realitor, Realator, Relator, Reeltur. Which is it? The answer is the first one, REALTOR. It’s two syllables, pronounced Real-tor. (There is no a, e, i, o, or u between the REAL and the TOR parts.)
Also, please note that being a member of the National Association of Realtors (NAR), the California Association of Realtors (CAR) and the Silicon Valley Association of Realtors (SILVAR) is not the same as being licensed. The states issue licenses for real estate sales people, brokers, and other professionals. Realtors are first licensed by the state and then voluntarily join the trade group for the industry. In California, it’s now the Bureau of Real Estate which issues the salesperson or broker licnese. (Please see the related article at the bottom of this post for more on that.)
Looking for a Silicon Valley Realtor? A Los Gatos Realtor? A San Jose Realtor? Please call or email me, Mary Pope-Handy, to chat about your real estate needs, buying and selling a home here in the South Bay area. And please, don’t call me or anyone else Realitor, Realator, Relator, or Reeltur!
Earnest money refers to a home buyer’s deposit on a home that he or she is in contract to purchase. It’s often called an earnest money deposit, initial deposit, or good faith deposit in Silicon Valley. The terms are all interchangeable.
How much is the earnest money?
In the San Jose & Los Gatos areas, and Santa Clara County generally, the earnest money is usually 3% of the purchase price of the home. It is placed in an escrow account, which is usually at a title company (in northern California that’s how it is handled – in Southern California, often there is a separate escrow company).
Ordinarily, funds are due within 3 business days of acceptance of the contract, but that can be changed (it’s one of the few places where the CAR and PRDS contracts reference business days rather than calendar days). Some listing agents will counter back that funds need to be in title the next day after the offer is ratified. Some buyers may request more than 3 days if their funds are coming from abroad. With competitive, multiple offer situations, buyers should anticipate needing to get the money to title fast and have it ready to go before the offer is presented so that they aren’t at a disadvantage.
Is a cashier’s check required for the good faith deposit?
The initial deposit does not have to be a cashier’s check, however, some listing agents and sellers may request that in a counter offer. That’s most likely to happen in a very competitive multiple offer frenzy, and unlikely to happen if it’s just one or two bids.
Increasingly, the funds today are wired to title, but in some cases, buyers may instead write a check. For the earnest money deposit, it may be a personal check. (At the end of escrow, it must be either a cashier’s check or a wire to bring the balance of the down payment to title. Both of these are referred to as “good funds”.) It is important for home buyers to draft the check correctly (not made out to just “title company”, for instance), and to understand that this isn’t a check that just sits in a drawer. The check for the initial deposit is cashed by the escrow company as soon as they get it. Real estate brokerages tend to prefer that Realtors don’t touch the buyer’s funds, so many are encouraging that consumers wire in funds rather than hand a check to a real estate agent.
Phishing and wire fraud is a concern, so when sending funds in electronically it is extremely important to phone the title company and verify the specific instructions.
Does the earnest money count as part of the entire down payment?
Yes, if the buyer is putting 20% down on some real estate, the initial deposit is likely to be 3% and the balance of the down payment will be 17%. The balance of funds will need to be in escrow a couple of days before closing. Many lenders will not fund the loan on the property until and unless the buyer’s money is in escrow first.
Can the buyers get the initial deposit back if they change their minds about buying the home?
This is not a “one size fits all” question. If the buyers have contingencies, it may be possible to back out of the transaction and have the full deposit returned. If the buyer has written an offer with no contingencies, that may be an uphill battle, and time to consult with a real estate attorney, as Realtors are not qualified nor allowed to provide tax or legal advice.
What is escrow? (on popehandy.com blog)
What do international home buyers need to know about financing a real estate purchase in the United States? (on Move2SiliconValley.com – relocation site)
Words can be so revealing.
Recently at an open house, a home buyer said that he and his wife don’t have a buyer’s agent. Later, though, he volunteered that recently they’d written an offer on a property and had “used an agent“.
What does that tell you?
Most Silicon Valley real estate professionals would like to have established professional working relationships with home buyers and sellers. They want clients, not customers. Realtors put in a lot of time reviewing disclosures, pulling comps, analyzing the realty market, looking for red flags at the property and in the paperwork. The real estate salespeople or brokers want to go “all in” to help their home buying clients to buy their next home with the best price and terms possible.
But do home buyers want the same thing that their Realtors do? I’d say usually yes – but not always. Often you can tell how committed a home buyer is by the way he or she speaks, but sometimes only in the way that person behaves. For those of us working in the industry, it’s very important to understand the client’s motivation and loyalty; spend too much time with buyers who aren’t committed to working with you and you will be in the hole financially.
Probably 15% or so of San Jose area home buyers really don’t want a relationship with a Realtor. They’d rather go it alone. At another open house, someone said to me that she didn’t like “feeling obligated” to anyone, and found that if she did anything with any real estate agent, that person was expecting her ultimate business.
Yes, that is how it works. We only get paid if a sale closes.
In many areas of the United States, it is very common for Realtors to engage with home buyers using a Buyer Broker Contract (buyer broker agreement). Here, it’s not so common. We prefer to work on a handshake, we prefer to work for our clients with the faith that they will reciprocate our hard work with their loyalty. Silicon Valley Realtors want to guide and assist you all the way through from before, during, and after the sale. They do want to know that you will work exclusively with them – and not just “use” them. If that’s the working, professional relationship you have with your Realtor, it will give you benefits for years to come as that buyer’s agent can be an ongoing source of advice and guidance.
When a home seller remains in the home after the close of escrow, it’s as a tenant or renter – even for a brief period of a few days. With the shifting role from home owner to new renter, the rules of engagement may not be clear, and expectations may not line up with the addendum for the rent back. So let’s do a set of what happens during the tenancy period after the sale is done.
Seller rent back True or False questions – which of these statements is true or false for the period when the seller is a tenant?
- When escrow closes, the buyers get keys to the home
- The seller must be undisturbed by the buyer until moving out
- The buyer can do repairs, including fumigation, during the rent back
- Prospective tenants may view the property during the rent back
- Contractors may enter the property during the rent back
- The new owners must give 72 hours notice before entry
- To enter the home, new owners must use an official CAR or PRDS “Notice of Entry” form
- The new owners may only enter the property if their Realtor is present or if the listing agent is present
- If the seller overstays the agreed upon rent back time, there’s a penalty fee that will be charged
- If there’s a rent back, buyers may do a walk through both before close of escrow and also at the end of the rent back period.
Some of these are challenging not just for buyers and sellers, but for real estate agents too. The reason for the confusion has to do with the number of forms involved. There are 3 different rent back addenda which may be employed in Silicon Valley: 2 options from the California Association of Realtors (CAR) and 1 from the Peninsula Regional Data Service (PRDS).
- PRDS form RSOAS – Seller Occupancy After Sale Addendum (1 page form)
- CAR form SIP – Seller in Possession Addendum (1 page form, intended for less than 30 days)
- CAR form RLAS – Residential Lease After Sale (5 page form, for more than 30 days rental to seller)
Some Realtors only use either CAR or PRDS forms, but I have found that depending on whom you represent, it may be worthwhile to tell the client about the differences between them as they are not exactly the same for all of these questions.
Now let’s go back to our questions and see what the contract & addenda have to say about each one. Continue reading
Are you wondering what the Brexit vote will do to US home prices? Lawrence Yun, the National Association of Realtors’ chief economist, believes it could be a good thing short term as investors strive for quality assets that have a return greater than US treasuries, and lower mortgage rates as a result of the flight to US treasuries.
As a Los Gatos Realtor, I hear many consumers and real estate agents state that they believe that U.S. real estate and the U.S. economy are viewed as the most stable in the world. If that is the case, then people from all over will want to invest in homes and land here rather than elsewhere.
It remains a strong seller’s real estate market in Silicon Valley, with many properties selling with multiple offers, but there’s an undercurrent of concern that we are the near the peak of pricing. That has some buyers nervous (though most will quip that Apple and Google and others are still hiring, and the local economy is strong – so they are not too worried). For those who are a little nervous, sometimes it turns into cold feet – and it’s costing them.
What we are seeing in terms of cold feet with Silicon Valley home buying:
This undercurrent is not being widely reported but we are experiencing it in our real estate practices as a few things have been taking place.
First, a larger than usual number of transactions have been falling through. Many of these, though, are not recorded on the multiple listing service, as they take place right after an offer is accepted, so the listing agent and sellers turn to one of the other bidders and put them into contract within hours. Because they aren’t recorded, it’s impossible to track – but the stories are out there of this happening more now than a year or two ago.
In other cases, offers are written and submitted but withdrawn before they could be countered or accepted.
And in others, buyer agents say that they will be submitting an offer, but on the day of offer presentation, the home buyers back out and the offer is never submitted.
In my experience, all of these things are happening “more than normal” right now. A lot of it is not easily measurable.
Symptoms of cold feet to come
Home sellers want to feel confident when they accept a contract that it will stick, both because they don’t want the work or emotional upheaval associated with a transaction that falls through, but also because often the best price is the first price. When a home ‘resells’, most of the time it is for less than the origanlly accepted bid.
For that reason, smart listing agents are looking for the symptoms of cold feet. They’d rather not get their sellers into contract with nervous buyers who will change their mind about buying the house or condo.
Symptoms of nervousness about the property at an open house:
- Dominating the listing agent’s time with incessant and low-level questions – best to give most of your questions to your own buyer’s agent, who will help you with them. It’s good to ask about the home, the reports and so on, but you don’t want to take so much of the Realtor’s time that he or she cannot talk with others there. Think balance both in terms of the time and the nature of the questions. You want to present yourself as reasonable and easy to work with.
- We often say that the longer a buyer stays, the more likely he or she is to write an offer. This is true, up to a point. Buyers who come to an open house and stay for 2 hours, or who make 4 or 5 trips to see the house go from looking interested to appearing unsure.
Symptoms of nervousness about the property (your potentially cold feet) when your offer is submitted:
- Sending in an incomplete offer and supporting documents. If the listing agent requires proof of funds, provide it. If the disclosures are to be signed, do all of them – not just the cover sheet. Aim to be thorough, it will present you as serious. It will also show that you are not a pain to work with, that you and your Realtor can follow directions and that the listing agent won’t have to chase down the paperwork later. Go the extra mile, it helps!
- Submitting an offer package “last minute”, without the buyer’s agent giving advance notice that it’s coming. Related to this is seeing the property and reviewing everything well in advance, but only deciding a few hours before the deadline to actually write, sign, and submit the bid. The serious buyers who are rock solid are the ones who know early on that they want the property and are committed to it early on. Their buyer’s agent will let the listing agent know long before offers are due that these home buyers are going to bid on it. One agent recently told me “my buyers are madly in love with the house” many days before the offer due date. This makes a big impression on sellers and their agents.
- If the buyer’s agent needs to call every few days to see how things are looking, it usually hints that the buyers are not too sure or that they will only write an offer if there’s limited competition. The truly sure buyers plunge ahead despite competing bids or the lack of them.
Want to buy a home? Try not to come across as skiddish to the listing agent! Your cold feet may cost you the home, even if your offer’s got the highest price. Home sellers and their agents want to feel confident that you will close on the sale if your offer is accepted. Present yourself as serious, capable, reliable, and easy to work with and your odds of success will be increased. At the end of the day, it is always “price and terms”, but never underestimate the influence that your behavior and your real estate agent’s behavior play into the overall package, because shaky buyers may not close the sale, but home buyers who are rock solid and madly in love with the house will.
Lastly, in an appreciating market, as we have right now, it should be noted that often the next house or townhouse or condo will be more costly or in worse shape than the one you could not decide to get serious about. Stay nervous too long, and you could ultimately really impact how much home you can buy at all. Worse yet, take too long and you may price yourself out of the market entirely.
Recently an old friend asked me why some Realtors are on Zillow but not all Realtors are found there. She was wondering if perhaps they weren’t really Realtors if they weren’t on that site. This is a very smart lady, and I thought if she was confused about it, anyone could be. So today I wanted to go over that question.
When you see a real estate agent’s name and image on Zillow, it’s either because that person is the listing agent of the property being viewed, meaning that he or she represents the seller of that home, or is someone advertising on Zillow in that zip code. The same applies with Trulia and nearly all online real estate portals or websites.
Why do some Realtors or real estate licensees choose to spend their advertising dollars on Zillow, Trulia Yelp, Angie’s List, FindTheHome, Movoto, Redfin, etc., and others do not?
Simple: it is how they decide to run their business, and how they expect to see a return on investment.
Often consumers believe that Realtors just help peopole to buy and sell homes. It is true that we do that, but we are also business owners. We spend time “on” the business, planning its growth, creating what should be future business, paying our work related bills. We need to budget carefully and allocate our marketing and advertising dollars wisely or we end up with little to show for our hard work. Real estate is an expensive business – agents (usually) split income with a broker, pay business fees (thousands of dollars per year) to that company, pay dues for the MLS and Realtor associations, and many other things. It is not uncommon for real estate agents to spend 20-40% of their net (after splitting with their broker) on marketing costs (fliers for listings, postcards, the for sale signs, photography, print ads, online ads and so on).
For some people, having an ad on the San Jose Mercury’s website, or Facebook, or any online site seems like a good idea and will help clients to remember that Realtor. For others, their main marketing is print advertising, open house work (more time than money), or door knocking, or cold calling, email marketing, video email marketing, blogging, social media marketing, contacting for sale by owners or expired listing home owners, or simply keeping in touch with their sphere of influence and requesting referrals from them. For most, a solid business plan includes several sources of new clients at all times, so most agents do some sort of combination of these or other avenues to grow their business.
Zillow is a very popular real estate site for home buyers and sellers all across the U.S. Many real estate agents have decided that advertising there will bring them business. Others would rather spend marketing dollars elsewhere. It is neither to their credit nor to their discredit if they advertise on that site or any other. It’s simply a business owner aiming for a good return on dollars spent. There are good agents found on those sites and there are good agents who will not spend their money on those sites. Don’t be fooled into thinking that being on them makes a Realtor better, or that being off them makes a Realtor worse. They are just agents who spend their money differently to grow their business.
$8,775,000 : 680 S 8th ST, SAN JOSE0 beds, 0 bath
$4,200,000 : 156 Chynoweth AVE, SAN JOSE0 beds, 0 bath
$3,499,000 : 3005 Springknoll CT, SAN JOSE7 beds, 8 baths
$4,200,000 : 1011 Leigh AVE, SAN JOSE0 beds, 0 bath
$4,000,000 : 1631 University WAY, SAN JOSE5 beds, 5 baths
$3,788,000 : 5510 Country Club PKWY, SAN JOSE5 beds, 4 baths
$2,988,000 : 5962 Country Club PKWY, SAN JOSE5 beds, 5 baths
$1,999,000 : 120 Graham AVE, SAN JOSE0 beds, 0 bath
$2,797,000 : 638 Rocking Horse CT, SAN JOSE6 beds, 5 baths
$2,888,000 : 7871 Prestwick CIR, SAN JOSE7 beds, 5 baths
See all Real estate in the city of San Jose.
(all data current as of 10/22/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.