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The Holidays: Should You Pull Your Home Off The Market?

Should you pull your Silicon Valley home off the market? A different way to do home Sales During the HolidaysAre  you thinking it’s time to pull your home off the market?

  • many sellers in late fall decide to withdraw unsold properties from the active real estate market
  • winter can be a good time to sell as the competition shrinks, and some homes look wonderful in their holiday finery
  • rather than pull your home off the market, you might consider keeping it on, but marketing it differently
  • we’ll suggest some strategies for holiday home marketing below

If you’ve been trying to sell your home in Silicon Valley but haven’t received an offer yet, don’t despair!  With our mild winters, you really can sell real estate any time of year, especially now, when inventory is so low.

When most sellers exit the market after Halloween, we typically see a higher absorption rate as serious buyers will be buying from the available inventory. That means your odds of success are higher!

Should you pull your home off the market? We think not, but don’t keep trying to sell it the same way!
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Online home valuation programs and why they are usually inaccurate

The online home valuation websites are in high demand for spot checking a price. They are fast, easy, and free. 
Online home valuation graphic: same House Different ValuationsEveryone wants an easy answer, but often the easy answers aren’t all that accurate.

Online home valuation confusion

Sometimes our clients present us with “THE VALUE” of property per one of these free online home valuation websites sites and in some cases, they challenge us to disprove it (Zillow says it, or some other site, so it must be right, goes the thinking).  If they want to buy a house which is listed for more than the auto-comped value, it may cause some emotional anguish.  And if they want to buy one which is listed for less, they may feel a little giddy – unless multiple offers are looming.

The same is true with home sellers.  They agonize when Zillow, Trulia or some other big name site places a worth on their property which is less than what they feel it should be.

Often the best way to respond is to show many of the online valuations and not just the one the client is focused on (often that’s either Zillow or Redfin, but some are attached so some other site’s numbers.

What might surprise a lot of people is the huge discrepancy in values given.

Sample auto comp values online

A good exercise is picking a home that you know fairly well and then seeing what the online home valuation tools say for each one. I picked a home that I know and ran the address through several websites that provide automatic pricing info. Here are the results, from low to high:

Not included in online home valuation study:
Eppraisal $2,072,000 (too high)

Included in the online home valuation study:
Chase $1,721,800
Collateral Analytics (via Realtor.com)  $1,671,000
Redfin $1,644,906
CoreLogic (via Realtor.com) $1,631,300
NAR RPR $1,617,440 (subscription only for Realtors)
Zillow $1,580,300
Quantarium (via Realtor.com) $1,566,759
Bank of America $1,504,391

(Please note: the Trulia home value estimator is the same as Zillow’s Zestimate because Zillow owns Trulia.)

From top to bottom, the amount varies by $217,409! That’s a 14% gap between top and bottom. Had we included Eppraisal, it would have been even crazier.

How can the online home valuations disagree so much?

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Signing with a mobile notary

Should you sign with a mobile notary - image of people, paperwork, penWhen it’s time for your final document signing prior to the close of escrow or refinance, is signing with a mobile notary better, or should you do it at the title company? These aren’t papers that you can DocuSign – they must be done in person.

What is a mobile notary?

A notary, or notary public, is someone who can check your identification and verify that you are who you say you are. A mobile notary public, usually called a mobile notary, is someone who travels. They come to you.

Quick summary

  • You often have a choice about signing with a mobile notary,  or signing at the title company.
  • Be aware that in most cases you will pay a little more in closing costs if you elect to sign remotely.
  • Some lenders and title companies may nudge you to using an out of office signing and may have built that fee into their closing cost estimates for you, but it is optional, not mandatory!
  • Even if you sign at the office, you may not get the escrow officer but still have a notary and still have an extra charge. Or just a higher fee than at other title companies for this service. Different title companies have different fees and policies.
  • Best bet is to call the title company and ask if the fee will be less if you sign at their office.

During most of Covid, home buyers and sellers did not have a choice about where to do what we call a signoff: title companies did not allow signings in their office for most of the pandemic. Instead, buyers, sellers, and refinancing home owners would meet with a notary, often outdoors, to sign documents prior to the close of escrow or completion of the refi.

Also for most of the last 2.5 years, Realtors were not allowed at the signoff. That is no longer the case, either, though.

Fewer restrictions, title company office signing is now permitted

Now that things are opening up, consumers have the ability to sign at the title company in nearly all cases. A mobile notary remains an option, and may be preferable for you, but make sure that you are informed so that you are making a choice with all the factors on the table. (As of October 2022, if the Covid pandemic worsens again, this could change.)
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Why is that house so cheap?

House with words - why is that house so cheap“Why is that house so cheap?” asks the puzzled home buyer. Is there something wrong with it? Is it a trick to drive up the number of offers or the price? Is it a bad area? Is it too good to be true? Bargain hunting home buyers may delight in purchasing a home at a low price, feeling that they got a great deal.

Often, though, the great deal is a reflection of a defect of some sort – and the defect may or may not be easily fixable. When they go to sell that property, they may find that most buyers aren’t interested and that when it’s sold it’s a great deal for the next owner.

Today we’ll look at the 3 categories of reasons why certain properties get bargain basement prices and make consumers ask “why is that house so cheap?”

  1. strategic pricing by sellers and their agents only, nothing wrong (except a deceptive price)
  2. property problems (that can be mitigated)
  3. location problems (that cannot be mitigated)

Why is that house so cheap – when the list price is a marketing tactic only

We’ve written about the strategy of a price mirage here before. If you didn’t see that article, it comes down to this: a home is priced lower than it’s worth, lower than the seller will accept, in order to get a dozen or more offers that will drive the price sky high. It’s risky to underprice a home in a declining market especially. If the buyers don’t jump on it, it is not that easy to convince later home buyers that it’s worth more than that initial list price.  This can work but it is a gamble, and for that reason we don’t recommend it.

By the way, a tool which can sometimes be useful for pricing is Realtor.com. They offer 3 “auto comp” valuations on the listing page of homes for sale. If a property is close to a boundary (zip code, school district, area), it may be off because it seems to just pull sales from 1 mile in all directions. It can also be off if the home is in very poor or extremely excellent condition. Here’s more information on their system: Realtor.com estimates

Defects with the home can make the house so cheap when it sells that you may wonder what happened

A number of problems within the house or yard can cause the home to appeal to fewer buyers, and that will make the home sell for less  when it does sell. Since these are in the home or yard, though, they are likely fixable in most cases. Whenever you ask “why is that house so cheap?” you also want to ask “if I buy it, is the problem fixable?”
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Exercise caution when viewing or showing homes for sale

Potential Danger sticker with house and keys - exercise caution when showing homesReal estate professionals are becoming increasingly aware of the need to exercise caution in their line of work. This is true for both buyer’s agents and seller’s agents. It is good for our Silicon Valley buyers and sellers to be aware of some of these issues, since they could also be at risk.

Quick tips on how to exercise caution:

  1. Meet people you know, or for whom you are able to validate. (With real estate licensees, you can usually find their phone number and email on their company website.)
  2. Don’t presume that because a house is for sale, it’s empty (don’t peer into the windows or walk into the backyard). View the home through the proper channels, either by appointment or during an open house.
  3. Buyers should not be allowed to enter the home without their agent, who is to follow the instructions on the MLS. Some buyers may knock on the door and ask to see it. The answer should be no. It is not safe to let them in.
  4. When hunting for the home you’re trying to see, please be careful, particularly out in the country or in the mountains, where homes are not always well marked. I had two scary episodes in those types of areas, both involving my being on the wrong driveway.
  5. It’s wise to exercise caution when entering a home, even if you have an appointment and your agent is with you.  Sometimes communication isn’t great between residents, and it’s possible to surprise someone who’s not expecting you.

 

Agent colleagues: don’t have your first meeting with a stranger at a home for sale, especially if it’s vacant. (This doesn’t apply to referrals from your past clients, friends, etc., where that person is already vetted.) It is best for consumers and Realtors to initially meet in a public place, such as the realty office or a coffee house, and for others to know where you are during that meeting. Even better, get a pre-approval letter and speak with the lender to make sure the person is legit.

Buyers – exercise caution for your own sake, and for the residents of the home

For buyers who see signs on properties: do not presume that the house is empty and that you can peer into windows or walk around into the back yard of the house. (I have seen people do this and it is creepy at best.)  You don’t know the situation – the house could be for sale but not viewable, it could be occupied.  Some homes are offered with the instructions that the home can only be seen once an offer is accepted (“write offer subject to inspection”).

The home could be tenant occupied.  A resident could be ill.  Children could be in the house and if they look up and see a stranger at the window it will scare them badly. Don’t do it.  (Most buyers won’t do this, but I have seen it often enough that it warrants saying.)

If you need more information, call your own agent to pull it up on the MLS and give you the info you seek.  If you aren’t working with a Realtor, call the listing agent. In all cases, don’t go onto the property except to grab a flier from the box on the sign post. It’s imperative to exercise caution for not just your sake, but everyone’s.

Sellers – be careful for your own safety

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Why didn’t my San Jose home sell?

Why didn't my San Jose home sell.“Why didn’t my San Jose home sell?” or “Why didn’t my Silicon Valley home sell?” is being heard from frustrated sellers in Santa Clara County as the days on market rack up. They remember that just a few months ago virtually every home flew off the market.

If you’ve had your San Jose home listed for sale with a real estate professional but after a long while on the market it hasn’t sold, you are probably tired, discouraged, and maybe even angry. What went wrong?  Isn’t this still a hot seller’s market?

In brief:

  1. The peak of the hot seller’s market was in April – May 2022 for closed sales. Those homes were on the market in March or April. Spring is normally a better market than fall, but this year a lot changed to cause prices to fall since that peak.
  2. Affordability took a triple hit for buyers: home prices rose extremely fast, the Fed raised interest rates quickly and steeply (nearly doubling in 6 months), and the stock market tanked. Buyers’ budgets have shrunk and many of them decided to wait until conditions are more favorable.
  3. Buyers still looking are pickier than they were in Spring. Homes that aren’t perceived as the best value are getting passed over.
  4. Most of the time when homes don’t sell, it’s due to them being overpriced for the current market. Prices are down about 15% from earlier this year, perhaps more for homes in less desirable locations such as near high voltage power lines or on busy roads.
  5. We will consider options that sellers have to turn things around from “why didn’t my San Jose home sell” to “wow, that was a great response from home buyers!

Why didn’t my San Jose home sell? Pricing confusion is the most common culprit.

Neither the sellers nor their Realtors control the market, but it is imperative that we understand the market if your home is to be properly positioned for a sale. Your own area may not be reflective of the city of San Jose as a whole, but this should give you some ideas on how things are faring, and you can check the link below for your area, whether it’s Berryessa, west SJ / Campbell area, Almaden, downtown, etc.

Sellers are having some whiplash over the change in prices.

Average Sale Price for San Jose houses in August 2022

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Selling a home in Almaden Valley, San Jose – best tips!

Selling a home in Almaden Valley - foundation and drainage are keyAre you selling a home in Almaden Valley, San Jose, within the next year? There are things that you can do to enhance your home’s value and your ultimate net from the sale.

#1 tip for selling a home in Almaden Valley, San Jose

In addition to the basics for every home seller of correct pricing, fixing, cleaning, decluttering, replacing floor coverings and paint as needed and providing a complete disclosure package with pre-sale inspection, there is one extremely important facet to focus on in 95120:

  • Foundation & drainage work is KEY!  This is the number one issue that is fairly unique to Almaden as an issue.  Find out if your crawl space has any moisture intrusion either now or seasonally and if so, consider mitigating it as these items can scare buyers off or cause them to lowball their offers. (You may want to hire a home or pest inspector to check the entire crawl space for you.) Probably 90% of homes in Almaden have this problem and it should not be ignored as it can lead to expensive foundation repairs, mold, cupping of hardwood floors in the living space, and more.
    • Most home owners are not directing the water away from their homes at the downspouts, and that is part of the problem in many cases.
    • You may need to employ a foundation and drainage contractor for guidance and implementation, depending on what is discovered when your crawl space is checked
    • Even if you don’t get the work done, having a bid for what’s needed is a huge help. The reason is that whatever a cost might be, most buyers believe it will cost 3 -5x that amount. Providing the actual cost will build buyer confidence and lessen their fear of surprises.
  • If your home is close to high voltage lines, consider learning the EMF levels. They are likely not as big of a deal as buyers will worry that they are.
  • In a quiet location? You might want to check your property’s “How Loud” score to promote that benefit – see HowLoud.com.

Selling a home in Almaden Valley: what’s unique about 95120

This lovely corner of San Jose has become more prized in recent years. Many home buyers view it as a good value for the money in terms of the schools, the overall quality of the community, the scenic beauty with hills close by on two sides, and the reasonable commute to downtown San Jose. These are often what motivate home buyers who are drawn to the 95120 zip code. Once they visit in person, they may be surprised at how quiet this area is, generally, too.

The close proximity to the Santa Cruz Mountains on one side and the Santa Teresa foothills on the other is unique. There are some issues that arise from that situation that we’ll address later, primarily regarding water, drainage, and foundations, as mentioned above. For most home buyers, those are not really on their radar upfront.

Selling a home in Almaden Valley: plan to educate the buyers

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Beware over improving your property when preparing to sell

Beware over improving - elegant kitchen and recessed lightsHome sellers know that certain fixes will give a good return on investment when selling. The risk, though, is in over improving your property.

Reasonable home sale prep will not over improve the home, but will include:

  • decluttering so that the home, garage, and yard all appear to offer enough comfortable space
  • deep cleaning, including the windows and  tracks
  • repairs to whatever is broken or not working properly, such as windows that don’t open and close smoothly, doorbells on the fritz, faucets that drip
  • often fresh paint and carpet are a good idea – case by case basis
  • frequently new light fixtures are helpful
  • sometimes removing window coverings to let more natural light in can be a good idea
  • sprucing up the yard, trimming bushes, planting something colorful near the front door

Strategic upgrades such as these prior to putting the home on the market will result in a faster sale at a better price in most markets.  Some sellers don’t want to do enough, whether it’s as basic as cleaning and decluttering or if it’s repairs that are imperative due to health or safety conditions.

Sometimes, though, we meet property owners with a bent toward the other extreme. When possible, we’ll do our best to get them to minimize their to do list since deep remodeling may cause a diminishing return, particularly when the market is soften and prices may be falling.

Over improving your property: how much is too much?

When the market is appreciating sharply, it may be possible to do a tremendous amount of work and get a fantastic return on it.
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The percentage of all cash sales in Santa Clara County

The number and percentage of all cash sales (all cash, no loans) both rose in June. It’s interesting to see as the market is softening for most buyers.

Not only did the number rise month over month, but it also rose year over year. We have to go back to 2018 (which was an extremely deep seller’s market) to find more all cash deals in June.

Number of cash sales in Santa Clara County for Single Family Homes

Percentage of All cash sales, month by month, in Santa Clara County (single family homes)

Next, the actual percentage of sales among closed houses:

Percentage of all cash sales for single family homes in Santa Clara County

 

Note that this is the highest percentage for June of any year since 2017.

What does it mean that cash buyers are an increasing percentage of the closed sales?

  • Rising interest rates not only don’t harm the all cash, no loans buyers, it actually helps them as it weakens their competition
  • These buyers may be feeling more confident with the softened market and easier buying conditions generally
  • My thinking when we saw interest rates rising is that it would help the mortgage free buyer more than anyone else – that seems to be the case.

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How to price a home in a correcting market

House with dark clouds - How to price a home in a correcting marketHome owners wanting to sell will be asking how to price a home in a correcting market – if they understand that things are shifting right now.

When real estate values are rising, homes that are well priced, well staged, well marketed, well photographed, and easy to sell tend to sell quickly and for top dollar. In that situation, it’s almost impossible to price a property too low, because buyers will rush in and bid it up. If it’s priced extremely aggressively, it may create a larger crowd of willing buyers and the ultimate effect may be a higher than expected sale price. That’s a strategy that often works well in a hot market.

That’s less effective now, as conditions have mellowed significantly due to dramatic changes in inflation, the stock market values plummeting, and interest rates rising sharply. The question, then is how to price a home in a correcting market? Or one that is flattening or generally cooler?

There are tips at the bottom of this post, but if you want to sell your home now, when the market is cooling rapidly, here are some basic concepts on how to price a home in a correcting market:

  • understand that the odds of selling have decreased, and to get yours sold it will need to be the most appealing in terms of price and condition
  • serious sellers will want to position their home as the best value available today and appeal to both the buyers and to their agents
  • consider the trajectory of the market and if it continues as we see today, where the values will be a month from now – that is likely your pricing target

 

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