CCRs are the Covenants, Conditions, and Restrictions (sometimes “Covenants, Codes & Restrictions”) for a neighborhood, subdivision, condo or townhouse community. They are drawn up by the builder or by a board comprised of the builder and a few others who want to set the neighborhood standards. Sometimes you’ll hear them called CC and Rs or CC&Rs.
The CCRs are put in place, usually for a set number of years such as for 30 or 35 years, with automatic extensions of a prescribed number of years (such as 5 or 10) unless the homeowners in that tract or area vote t hem out.
The weirdest time line I ever saw in CCRs referenced something like “until the death of the last living great grandchild of…” and it mentioned one of the Kennedys. Odd, but apparently legit.
What are the CCRs about?
Ordinarily the CCRs tell us that homes cannot be too small, that livestock cannot be raised at the property, that home owners may not drill for oil or water, and many other kind of common sense things. The older ones will also state that the house must have a minimum value – often so small it might make us chuckle.
Additionally, the covenants, conditions, and restrictions will state what kind of signage may appear (only for sale and for rent signs, for instance, no billboards), and normally there’s a admonishment against noxious or offensive materials such as rubbish piling up on the property.
Newer CCRs, especially in condo communities or townhouse complexes, may have restrictions on things like what color the curtains or blinds must be if facing the street (white or off white or beige only). Often they state that garage doors must be fully down except when vehicles are entering or exiting. Some communities, like Rinconada Hills in Los Gatos, do not permit you to park your vehicle in the driveway overnight – it needs to be in the garage.
Many disallow washing vehicles in the complex. Right now that’s moot since the drought has the water company prohibiting all of us from doing that.
Condo and townhome CCRs
In condominium and townhome complexes, the CCRs are crucially important! Some of them have rules like:
- no more than 2 pets
- dogs may not be of these breeds (list)
- dogs may not weigh more than 20 pounds (or some other number)
- laundry may not be dried on balconies
- storage may not be left on balconies
- laundry and dishwashers may not run after 10 pm
- only people over the age of 55 (or some other age) may live at the complex
And MANY other clauses. Always always read the CCRs !
Illegal restrictions in the CCRs
Many years ago, some CCRs also had restrictions on who might buy or live in a neighborhood (racial, religious, and other restrictions). This is illegal today, of course, and so the first page of any CC&R document you see now will have a large disclaimer stating that any fair housing violations are illegal and are null & void. (At least it should be there.)
Click on the following link to download the PDF of the typical CCRs cover sheet.
Since the C C & Rs “run with the property”, until recently we were told that they cannot be amended. Want to see the cover sheet itself? Now, though, thanks to recent legislation, those offensive restrictions can be stricken from the CCRs. (more…)
Silicon Valley homeowner associations vary widely, depending on a number of factors.
What do you think about living in a neighborhood with an HOA, a homeowner’s association? For many, living within an HOA means a nice, tidy community. For others, it’s like signing up for Big Brother telling you way too much about what you can and cannot do.
Silicon Valley homeowner associations – the scope
- Some Silicon Valley homeowner associations are small, have limited authority, and are self-managed
- this could be a tiny group of townhouses with Planned Unit Development ownership, not condo ownership, on a public street
- some HOAs only cover a shared pool and recreation facility and have no jurisdiction over landscaping, home paint choices, etc.
- Some HOAs here are large, have a tremendous amount of authority, and have professional management
- this could be for a condominium complex, for houses or townhouses in a gated community such as The Villages, or anything in between
- the more the HOA controls, the larger the dues and larger the chance of the HOA financially impacting your property when you sell (not so much if the HOA only covers a shared pool)
Silicon Valley homeowner associations area vary tremendously in what they can and cannot do, and also in the types of rules which are enforced.
In Silver Creek, in the Evergreen area of San Jose, you can look around and see a vast collection of stuccoed houses with tiled roofing. So it would not surprise you if your roof needed to be tile there. (more…)
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.
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?
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.
Post-tension slab foundations are found in newer homes. Here in the Bay Area, a structure’s foundation needs to withstand not only the load of the building, but expansive soils, and the ubiquitous earthquake. Certain foundations are better at handling these conditions, and are seen more frequently here. One of these which is gaining popularity in new construction is the post-tension slab foundation.
What is a Post Tension Foundation?
Post-tensioning is a technique that was developed and first put to regular use in the 1970s, and approved methods have been published by the Post-Tensioning Institute (PTI), a nonprofit organization, since 1976. Sometimes called post tensioning, or simply PT, this is a type of slab foundation with added reinforcement.
In essence, a slab foundation, aka a slab on grade foundation, is a concrete base only a few inches deep, sitting directly on earth. You might see this for a small shed or playhouse, but larger structures are almost always reinforced, usually with rebar, and a fabric water barrier is lain out before the concrete is poured.
A post-tension slab is reinforced with grids of steel cables cased in plastic sheathes instead of rebar. After the concrete has hardened around them, the cables are pulled taut with hydraulic stressing jacks. This pre-stressing of the concrete creates added compressive strength to the foundation.
If you are tired of paying $3,000 per month in rent for a 1 or 2 bedroom apartment and have decided that you want to buy a Silicon Valley home, you may find that it’s complicated and scary as the San Jose area is in a very deep seller’s market. Let’s take a quick look at the major challenges and decisions you’ll face as a potential Silicon Valley home buyer.
Major obstacles include:
- lack of affordability
- saving the down payment (and other costs)
- wanting what you can afford
- market conditions (homes selling with few or no contingencies & well over list price)
We’ll take these one at a time.
Want to buy a Silicon Valley home? Challenges in getting it done
Affordability – or the lack of it
Challenge # 1: the cost of housing is staggering, whether you are renting or buying, whether you are a first time home buyer or you’ve just relocated from somewhere else less expensive (meaning almost anywhere). Homes under a million dollars are few and far between, as the newspapers and media have recently announced, and the median price of houses in Santa Clara County is about $1.665 million, with the average price more than $2 million.
Of course, condos and townhomes are less pricey, but they will have Home Owner Association or HOA dues to factor in.
Recently a friend asked me about the way in which vendors are selected when people buy and sell homes. In some cases, Silicon Valley home buyers or home sellers know which title company, home inspector, home warranty provider or other vendor to hire. Most of the time, though, they don’t. They are hoping that we real estate professionals can put them into contact with good providers to ease the task of choosing vendors.
When working with my clients, for most vendors I provide a trusted list of sorts. For the various inspections (roof, chimney, home, pest, etc.) or other service (lender, home warranty, title company) there might be as few as two or as many as six resources listed. Most often, my clients ask me if I have one or more which I prefer, and most of the time it is one company for each category (I have a favorite termite company, favorite home warranty company, etc.).
The home buyer or seller in Santa Clara can pick or hire anyone or any company he or she pleases for these various jobs. We agents can and will assist with sharing the names and numbers of those whom we know, like and trust, but at the end of the day, it’s the client who chooses. So really it’s up to the client – he or she can do some research or not. But if they tell me (as they most often do) to go with my preferred vendor, there’s one in each category and I don’t tend to “spread the business around”. Over the years, agents tend to build relationships with people in these companies and get a sense of whom they can trust and want to work with. (We agents would hate it if a client with six homes to sell picked six different Realtors to rotate through, too. We tend to want and also to give loyalty.)
If you read a termite or pest report, you may bump into the phrase “cellulose debris.” What does it mean?
Usually cellulose debris means that there are scraps of wood, sawdust, or bits of wood (possibly paper). It’s any kind of material made of wood. It could be old form board left in when the foundation was made. Most often, cellulose debris is mentioned as found in the crawl space of a home. Sometimes it’s infected (meaning there is a wood destroying organism such as termites present), other times it’s simply an invitation for “wood borers” such as termites to come and feast on the wood members that are laid out as a buffet for them. Wait long enough and it might get infected.
Where do you see cellulose debris in a pest inspection?
In our Silicon Valley area, pest reports are normally “separated” into Section 1 and Section 2 findings. If the cellulose debris is called out as Section 1, that means that there’s an infestation of termites or other wood-destroying organisms present. If it’s Section 2, that means that it’s not yet infected but is an invitation to trouble and you should get rid of it to prevent future problems.
Pest control operators will suggest that cellulose debris be removed so that termites and other wood eating organisms aren’t attracted to the crawl space or other areas of the home. It’s possibly a nuisance to get rid of it, but much better to dodge a problem upfront than to wait and have to solve it later.
How Often Should You Get A Termite Inspection?
How to prepare for a home inspection in Silicon Valley
What do you want from your home inspections?
Watch for Dampwood Termites in Silicon Valley!
How is buying a home in Silicon Valley different from in other parts of the country? (Move2SiliconValley relocation site)
As data becomes more available to consumers online, and new real estate brokerage models present themselves, the question is arising in the industry: will buyer’s agents will become obsolete? After all, 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.
Recently 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, 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.
A good buyer’s agent will be able to help with these items (and many more, depending): (more…)
In Santa Clara County, as in much of California, we have adobe clay soil and it’s expansive. That is, when the dirt gets wet, it expands, and when it dries out, it contracts. Hence it’s sometimes referred to as “shrink-swell” soils. (Every state in the union has areas with this problem – a color-coded map on geology.com shows areas with more and less expansive soils.)
Why is expansive soil an issue for homeowners and would-be homeowners in Silicon Valley?
The trouble is that the expanding and contracting soil is far stronger than concrete and the foundations upon which a home sits. A well written and illustrated six page paper can be found online explaining the mechanics involved for those interested in more detail on the hows and whys of expansive soils. (It states that the ground can life as much as 5,500 pounds per square inch!)
What I’d like to focus on here is mitigating the risks and preventing the problems associated with expansive soils.
The trouble is not so much that the soil is wet or dry. The problem is in the back and forth, the movement. When the soil is kept at an even amount of moisture, it does not expand and contract.
Obviously, rain is seasonal and we cannot control all moisture on or near the house. We can, though, work to move water away from the house and away from the foundation.
Keep rain away from foundations on adobe clay soil!
Winter storms can bring an enormous amount of water onto a home’s roof, and when it channels down gutters and downspouts, there can be a large amount of water exiting in just a few places. Where does that water go?