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Coronavirus impact on real estate sales

Graphic of a house under quarantineThis post on the coronavirus impact on real estate sales here in Silicon Valley is updated periodically, depending on unfolding events, so please check back often.

The market for houses is hot (still)

The coronavirus pandemic caused a worldwide surge of buyers rushing to purchase homes with more square footage, more rooms (home office, room for elderly parents to move in), and more outside space.

Locally, single family home prices rose about 20% over one year, despite the initial lockdown and restrictions on showings. Pools had not been so desirable pre-Covid, but now they are more sought after as buyers want to vacation at home.

Initially, it was challenging to sell a condo or townhouse, particularly if there was no patio, balcony, yard, etc. Those homes did start appreciating, but have not performed nearly as well as detached housing has.

Now, in September 2021, many of the requirements have been lifted. Buyers are still interested, but the steep appreciation has priced some buyers out of the market.

Quick overview of what is and isn’t allowed with real estate listings and sales

The landscape for home sales is complicated and more restricted than pre-pandemic times, but easier than it was in March – May 2020. The market is strange in many ways, but it is possible to buy and sell now and actually is not so hard at this point.

What’s changed with Covid: (more…)

Deciding to downsize – questions to consider

Deciding to downsize - moving truck and sunshine graphicWhether it’s called downsizing or rightsizing, if you are deciding to downsize you’ll want to start by considering a few basic questions.
  • What are the main goals with selling your current home and moving to something smaller?
    • Do you want less to maintain (home, yard, both?)
    • Are the reasons primarily economic? (i.e., smaller home is less expensive to heat, cool, maintain, or cash out , or sell to get rid of the mortgage, or something else)
  • Would you prefer to stay close to where you live now, or to relocate?
  • What kind of living space would be ideal for your next home? Do you want a yard or patio? Do you want to be in a seniors community? Would you prefer more rural or more urban than what you have currently?

Deciding to downsize can be for people in many different decades of their lives

 

Some people drastically change their house or move somewhere smaller (or more remote / less expensive) the moment the youngest child has packed up and gone away to college. They may be in their 50s or 60s and still relatively young, working, and saving for retirement. I’ve seen people sell in Los Altos, Saratoga, and Cupertino to economically downsize to Almaden or nearby areas when they no longer wanted to pay to live in a more expensive school district.

 

Others keep the “family home” as long as possible. My grandparents moved many times in their lives due to my grandfather’s military career, but in their retirement years they enjoyed a large home with room for everyone to visit – and we all did. They were 90 and 92 when they moved from their 5 bedroom house at Pasatiempo in Santa Cruz to Dominican Oaks, a retirement community just a few miles from there. At their ages, more help was needed. (For my grandmother, moving to a community was wonderful socially, as she wasn’t still driving at 90.)

 

If you are deciding to downsize, you could be at either of these ends of the spectrum,  or you could be anywhere in between. It’s a huge gamut and there’s no “one size fits all” or one “right answer” with this topic.

 

What makes you consider rightsizing?

 

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Does the exterior of a townhouse need to be inspected?

Does the exterior of a townhouse need to be inspected? View of townhomes in west Los Gatos.Does the exterior of a townhouse need to be inspected? If you are in the market to purchase a townhome, you may find that often the home and pest inspector are not including the outside areas such as the walls or roof. If you are preparing to sell your unit, you may be asked if you want to include or exclude the outer walls and features, or if you want a roof inspection done.

First, let’s consider why the inspectors may only inspect the interior of the home.

The reasoning frequently seems to be that the HOA will take care of whatever is on the outer walls or roof, so why bother? That assumption may or may not be accurate.

  • If the townhouse is held in condo ownership (as opposed to a PUD, in which homeowners own the outside walls, roof and the land under the unit), the HOA likely will take care of exterior damage.
  • If the townhome is a Planned Unit Development, or PUD, it’s much like a single family home: the homeowner will be responsible for repairs. (HOAs will repaint and reroof all units at the same time for both PUDs and condos, but not fix damaged siding, decks, roofs. It’s imperative to know which one you are buying, and you’ll only know that from  the preliminary title report. It’s also imperative to know what the HOA will do regarding repairs, and for that you’ll need to look through the lengthy HOA documents.)

Another consideration is the price of the inspection, which will be less – in most cases – if only the interior of the home is covered by the inspector.

Does the exterior of a townhouse need to be inspected even if it’s a condo?

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How responsive should your real estate agent be?

Stone stepsThe odds are good that if you are looking to hire a real estate professional, one of the criteria you seek is “responsive”. Those of us who sell real estate for a living know that consumers want to hear back from us as soon as possible when they call or email (or text, in some cases).

How responsive should your real estate agent be?

  • Most real estate agents will return phone calls within a half day regularly, or at the end of the business day worst case scenario
  • Some will answer the phone when it rings every time, unless they are with clients or otherwise crunching on something urgent, such as writing or reviewing offers
  • For emails, the response times can be similar – often within a few hours, but not more than 24 hours
  • When consumers text, the response may be faster since it seems urgent to the recipient. You’ll want to see if your agent wants texts outside of certain hours or not, or if texting should be reserved for things that demand a quick response.
  • Some agents may have a dedicated day off and will not return messages until the following day. It’s good to ask ahead of time about how time off is handled.
  • Be sure to ask about your agent’s schedule and communication style (when and how they’d like to hear from you). Make sure you let your preferred method be known so you can be on the same page not just for when to communicate, but how!

Responsiveness and phone calls

If not with clients or otherwise tied up, many Realtors (yours truly included) will pick up the phone when called during business hours. (Some won’t. Some do time blocking and return calls at set times, such as between 11am and noon and 4 and 5pm. Those who time block in this way will often put a message on their voice mail explaining when they will call back. Hopefully, that works for the caller!).  (more…)

Open houses are returning

Hand Sanitizer - use before entering open houseOpen houses are returning to the California real estate scene, and private showings are also becoming more relaxed, but it won’t be a return to pre-pandemic practices just yet. The announcement that open houses would be permitted caught most of us Realtors (and our managers and brokers) by surprise a couple of days ago, and all of the details are not yet published, but I’ll share what I have learned so far.

Required protocol and open house paperwork

First, a home seller must decide whether or not to permit an open house (and a listing agent if he or she wants to do it). Naturally, there’s a form for that – an addendum to the listing agreement, LOHA (LISTING AGREEMENT OPEN HOUSE ADDENDUM OR AMENDMENT). Here’s a bit of a screenshot to give you a sense of what is required if the seller agrees to have an open house at the property:

Part of the new listing agreement addendum for open houses, LOHA.

If the seller wants the home to be held open, and the listing agent is willing to do it, there’s a bit of protocol to follow. Visitors to an open house must sign in for contract tracing purposes. If you’ve been house hunting over the last 14 months, you are probably used to signing the PEAD-V form for visitors. With that document, the listing agent got your name and saw your electronically signed signature, but that is it. Only your buyer’s agent had your contact info.

As open houses are returning in this transitional phase, the new Property Sign-In (PSI) will ask you for your name, phone number, and email address. This is not for marketing purposes, but for contact tracing purposes only. (Some agents may opt to still use the PEAD, but if so, they’ll need a way to contact you should you end up exposed to COVID-19 at the open house.)

You should expect that at an open house there will likely be a table set up before you can enter where you sign in and use hand sanitizer, which is required. The agent will make sure you are wearing a mask. Some sellers and / or listing agents may have additional requirements, such as your wearing shoe covers (usually provided) or gloves (not usually provided).

You should also expect that it’s possible you’ll need to wait to get inside. This is very important to keep in mind if there’s a heat wave. More on that below. (more…)

Selling Your Silicon Valley Home? Make Sure Your Front Door Gives a Great First Impression!

Twelve Silicon Valley Doors, shown as black & white (photos by Mary Pope-Handy)

Thinking of selling your Silicon Valley home?  When your house or condo is for sale, curb appeal is crucial because if buyers don’t like what they see on the outside, they will not bother to see what’s on the inside!

It’s hackneyed but true:  “You never get a second chance to make a first impression“.

This is no where more true than with front doors! Staging begins on the front porch.

In my real estate practice, I usually see at least 10 or 15 San Jose, Los Gatos or Saratoga area homes per week – usually many more than that too.  A good, clean front door with nice paint or varnish, no dust, clear glass and sparkling hardware gives a good welcome to your home’s visitors, whether they are coming as prospective buyers or simply as guests.  Amazingly, though, not every home seller gets this basic principle quite right. Very often, front doors are dusty, dirty, in need of paint or perhaps even in need of replacement.

And we’re just scratching the surface!

Exterior home doors found all over Silicon Valley

A home’s front door sends a message. What message does yours give off? Photos by Mary Pope-Handy

Here (to the right) are some doors I’ve encountered in my work as a Silicon Valley Realtor. What do you think of each of these?

Some homes have a “security screen door” in front of the regular front door, which is mostly obscured.  What message does this kind of strong grill give?  If it’s the only one on the street, it might imply that one person nearby has concerns about safety. But if there are several doors like this on the same street or nearby, it can give buyers concerns about the safety of the area.

The black door with the white trim in the center is a typical or average San Jose or Santa Clara County door.  It has a painted exterior and a fan light window on top, which allows some light into the home.  It’s a little more inviting than something without any windows, but there’s no cover for rain or an inviting front porch, either.  This type of door is not super expensive, but it does come across as at least fine, if not “good”.

Some of these doors are not the front door. I once viewed a listing which had access through a scratched up door facing the backyard, and when I shared the photo several people asked if it was a short sale or bank owned property. To everyone’s amazement, no, it’s a “regular sale!”  This kind of introduction to the property, is anything but regular and left far from a good first impression!  It is a discredit to the agent and the seller to put a home on the market with such a terrible first exposure to a property.
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Landscaping with tanbark or mulch? Use caution!

Beware Tanbark or Mulch by the foundation!Some Silicon Valley homeowners spruce up their yards and gardens in spring and summer with tanbark or mulch. While this is a very common practice, and often encouraged as a drought-friendly gardening option, it can be a bad idea if it is too close to the structure, especially the home’s foundation. Tanbark is simply small bits of wood, and most common mulch is often no more than shredded wood. Why is that bad? Wood is food for termites and piles of tanbark or mulch can invite and hide them as well!

Tanbark or Mulch?

Mulch is the more widely used term and it can cover a broad scope of materials, but the most common type you will find in stores (and in Bay Area gardens) is the woodchip mulch. If you ask for mulch at a hardware store, this is most likely what they will show you. In the local vernacular, we often refer to mulch as the fine, thin, or decomposed stuff – we have a different name for the larger bark and wood chips.

I learned only recently that tanbark is something of a local term that people from other parts of the state or country may not be familiar with. Here in the Bay Area we call the stuff you commonly see underfoot at playgrounds or piled thick on the planted berms around a shopping mall parking lot by the name of tanbark. Some people may reserve the name for the large chunky bark chips while others will call just about any wood chip substrate by that name. So tanbark is, in fact, a mulch.

Homeowners and sellers wanting their home to make a good first impression are often tempted to apply mulch or tanbark in otherwise bare patches around their yard, but you can wind up with far bigger (and more costly) problems if it’s too close to the foundation!

What Was That About Termites?

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What does it mean to be “out of contract” in a home sale?

Is your indecision putting you out of contract? Worried looking woman with laptop computer.Every region of the country has some unique real estate vocabulary and phrases.  Here, in Silicon Valley, when we say “you’re out of contract“, it’s another way of saying “you are not doing what you promised to do in the purchase agreement that you signed” (meaning the real estate contract).  In other words, there is a seller or buyer default happening.

“Out of contract” is not a legal term. I remember hearing a local real estate educator say “there’s no such thing”. It’s not an official status. But it is a way of describing behavior that’s not in alignment with the contract’s express promises.

Both sellers and buyers make promises to do certain things and most of these promises are tied to time frames or dates.  Here are a few of these time-sensitive promises or contractual obligations:

  • sellers agree to leave the utilities on until close of escrow
  • sellers promise to maintain the home until close of escrow as it was on the day the property went into contract (so mow the lawn, water it etc.)
  • buyers assert that they will get their initial deposit to title within a set number of days (the California Association of Realtor’s form states 3 business days or provides a blank to fill in an alternate number – it’s often 1 business day here)
  • buyers promise to remove contingencies within the times they stipulated in the offer
  • sellers will move out in according to the date set out in the contract
  • indecision over material facts or between buyers may make it hard to decide whether or not to remove any contingencies
  • buyers agree to take possession (move in) per the time/day agreed to in the purchase agreement (not before)
  • sellers bind themselves to having repairs done in a certain manner (depends on contract and clauses, if promised)

At one time or another, I have seen all of these items not adhered to by the parties who were supposed to make good on their word, and stranger violations that I don’t want to write about here lest I give someone a bad idea. I have seen sellers not move out on time (in some cases, elderly sellers who grossly misjudged the effort required to vacate.)  The failure to do so causes stress and anxiety, and sometimes worse: fear and anger. (more…)

Why Isn’t My Silicon Valley Townhouse Selling?

why is my Silicon Valley townhouse not selling?Why isn’t my Silicon Valley townhouse selling?” wonders the home owner. Even in a seller’s market some properties struggle. Real estate agents know why the home (or townhome, or condo) isn’t getting any offers, or worse yet, any traffic at all. In fact, local Realtors who’ve seen it might wonder if the owner of the property has seen the MLS printout at all!

Why isn’t it selling?

Whether your home has been on the market for a while or you’re just about to list it, here are some of the most common culprits to look out for:

  1. Terrible photos (or not enough of them): in our San Jose area MLS we are allowed 9 photos. How many are in your listing?
  2. More on photos: Would it be so hard to turn the lights on in the home when photographing the property? Real estate looks much better when well lit than when dark. Even beautifully remodeled kitchens can look so-so if the lights are not all on! A bright room will make you money…a dark room will cost you!
  3. Is there a video or virtual tour? **
  4. Is the listing syndicated so that buyers can find it on multiple websites?
  5. How is the pricing? Did you price a 2 bedroom townhouse as if it’s a 3 bedroom? That’s a very common but huge mistake! Compare apples to apples – the buyers are doing that, and when you bought your home, you did too!  Did you price the home using comps from 6 months ago, or comps from 3 miles away, or a different school district? Huge mistake!
  6. What’s your competition? Luxury homes will almost always take longer than a mid-priced home nearby – they’re in entirely different markets with entirely different demands. You’ve got to know what market you’re in and what buyers will be comparing your home against! If you’re a short sale, you need to be competitive against other short sales. Don’t be satisfied that your home is less expensive than a “regular sale”. They are two entirely different things!
  7. MLS description and comments: Don’t waste this valuable space! What kind of comments are in the precious few words allowed to describe your home in the multiple listing service? I have seen inane things use up that space. It is imperative that the descriptions be strong. For example, not “nice kitchen” (that could mean almost anything), but instead “slab granite countertops” – specifics that buyers want to hear about!
  8. Commission rate: if your townhome is a “regular sale” and everything in your area is selling with a buyer’s agent commission rate offered at 2.5% or 3% but you’re offering 2%, guess what happens? Little or no traffic, that’s what! Remember that agents are selling homes as their livelihood, and while many will overlook a low commission, many others will not. (When I list homes I run the CR of similar homes so that my sellers can make an informed decision on this point.)

**This is more important than ever right now with restrictions on showings and open homes during the pandemic. Read more about how covid-19 is impacting the real estate market in Silicon Valley and how to sell a home during the quarantine in my articles on this blog.

There are many reasons why a Silicon Valley townhouse might not sell, but marketing correctly will give you the best odds for success and, in a sellers market as we are in, may bring you a higher sales price. If yours isn’t selling, have a look at the price, the photos, and the description and see if anything is amiss, and check what’s happening with comparable properties in the market. These are the most important areas to consider. Other issues may be at play, but if these are correct your home should sell despite other challenges.
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Loma Vista, El Gato & Rancho Padre Neighborhood in East Los Gatos

Between Los Gatos-Almaden Road and Ross Creek sits an eclectic east Los Gatos neighborhood, a county pocket, featuring a view of the hills where you can find a little bit of everything.

The homes built on Loma Vista Avenue, Linda Avenue, El Gato Lane and part of Escobar Avenue were first constructed in the 1940s, with many more filling out the neighborhood in the mid 50s.

They were three subdivisions initially:

  • El Gato Terrace
  • the Loma Vista Tract
  • Rancho Padre (Rancho Padre is the one closest to the creek).

Loma Vista Avenue, Linda Avenue, and El Gato Lane

(Please note: these are not part of Blossom Hill Manor, which begins on the adjacent Longwood Drive.)

Map with Key: Loma Vista, El Gato, and Linda

 

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