The Silicon Valley real estate market is intensely competitive, and right now, many properties are getting multiple offers – especially if they are priced aggressively, are in ideal shape, and have a fantastic location either close to great schools or great employment (think Apple and Google particularly).
In the last 10 days, I’ve sold 4 homes. Three of them were my listings, and one was a buyer sale. The areas were in central San Jose’s Japantown, San Jose’s Cambrian area, San Jose’s Almaden Valley, and Campbell. (And in very recent weeks other sales were in Sunnyvale, Morgan Hill and South San Jose – so I have a very “broad view” of the market right now.)
Home sellers know that this is a great time to sell, but it’s not so great if they get their homes sold and then buyers back out. So they are looking for not just a great price, but also great terms. For most of them, that translates to a fairly fast escrow with few or no contingencies and possibly a (free) rent back. They want to know that if the home sells, it will close escrow.
A couple of weeks ago I was one of 9 bidders on an Almaden house with the best schools. My clients had a loan contingency and the listing agents let me know that while our price was close, all the other “close” offers did not have any contingencies – so ours didn’t have a chance.
In one of my four most recent sales, my sellers got 8 offers. All 8 did have loans but 6 of them had no contingencies for inspection, finance, or appraisal. In my one buyer sale, there were 12 or 13 offers. My buyers got the deal by having a high price and no contingencies.
That’s the kind of market we are in.
If you want to buy a house, I cannot advise you that you should just plunge ahead with no contingencies. I know it’s risky and dangerous, and I will explain to you (if you are my client) why it is. However, I also know that most homes that sell fast are selling either with no contingencies or very few (short) ones. My preference would be that my buyers would always have their normal contingencies. It IS possible in this market to have them – but to get them, you need to view homes that have been on the market more than 2 weeks and are not going to get multiple offers. If you fall in love with a house or condo that’s been on the market for just 3 days, you’re probably going to be in a bidding war and the winner of that war will have gone in with a crazy high price and probably no contingencies.
And I should warn you that this is an exhausting market, particularly for buyers, but for us agents too. Most do not get lucky enough to be successful on the first buying attempt, but have to make a few runs at it, which can leave them discouraged, heart sick, weary, and scared. Why scared? Because prices continue to rise. As one client recently said to me: “No house is perfect, and we could have bought a year or year and a half ago but it felt like overpaying….I think to get the house you do overpay now, but then you are done, you move in and get on with your life. If we had bought 18 months ago, when we started looking, it would have been $200,000 less. We have to just do it.”
For further reading:
A summary of tips for multiple-offer situations in Silicon Valley real estate contracts
