Home buying tip: how much to share with family & friends

Sharing Home Buying InfoPerhaps you’ve decided to buy your first Silicon Valley home before the end of the year, or that you want to make it a New Year’s Resolution for this upcoming winter.  It’s a really exciting, but also somewhat scary, thought.  It’s harder if you are going it completely alone…and also harder if you have 10 or 20 people giving you advice the whole way through.

How much sharing is helpful, and at what point will it bog you down or make things worse?

It’s not only helpful, but imperative to get solid advice from a very experienced, local real estate professional, ideally a Realtor. Real estate is local, so if your advice is from a friend or relative in another state, it simply may not apply here. (For example, in many parts of the U.S., it is normal to involve an attorney or to get a survey, but not here.  And in those areas it may not be common to worry about earthquake fault areas or drainage to protect your home from expansive clay soils.  The final signing of paperwork is different, as are the contracts, as are the ways school district boundaries are drawn, as are the disclosure requirements!)   You can check to see how long your real estate licensee or broker has been licensed.  That is not going to tell you everything, but it’s a good starting point.

It is critically important that anyone financially involved see all the homes you see.  Whether it’s parents helping with the down payment or a busy spouse who doesn’t want to spend time for most of the house hunt, my experience is that the odds of success are lowered significantly if these financially involved people do not go through the process of seeing what you see.  (more…)

Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley

Escrow StressBuying & selling a home is usually stressful for consumers, and some circumstances can heighten the anxiety further (being in multiple offers, buying a distressed home, or anything out of the ordinary).  Once you write an offer or receive one on your property, you may feel like a nervous wreck as you navigate the escrow period. In some cases, you may come down with a bad case of buyer’s remorse or seller’s remorse.

We’re In Escrow: Now What?

You will want insights and advice so that you’re sure that you are doing the right thing each step of the way.  Even if you have a great Realtor who thoroughly understands Silicon Valley real estate and is a fantastic communicator, perhaps you want some assurance from an outside source (who’s not being paid for closing the deal) that you really are making good choices in the home sale.

There are a bunch of bad ways to do this but also some good alternatives.

What not to do:

  1. Don’t call all of your local Realtor friends whom you didn’t hire and ask for their input.  First, it’s not fair to them as businesspeople that you want their professional input but not for compensation.  Second, they aren’t supposed to meddle and it puts them in an akward position of “implied agency” in which they take on some risk (being your expert upon whose advice they rely) without the benefit of ever getting paid.
  2. Beware the well-intentioned advice of non-professionals who may not be up to speed with the current market conditions, construction, your purchase agreement, etc.  Sometimes the “over the cubicle wall” advice can be very, very upsetting as these folks get a homebuyer or home seller freaked out – often over nothing or over a misunderstanding of the situation due to a lack of information.   Most often, this “advice” is from completely unqualified people and will compound problems rather than help to solve them.

How about some good alternatives?

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Handling the Jitters When Homebuying in San Jose

Home buying jittersSomething you can count on, when buying a home, is that you will be nervous – at times you will feel very stressed, perhaps even sleepless.  It is an immense move, to buy a home, and a big commitment. In terms of stress, it’s right up there with a new job, marriage, divorce and even death.

Right now, with the insanity of a very red hot seller’s market and steep appreciation in Silicon Valley generally, and most of San Jose, it’s even tougher.

What can you do to keep the jitters from getting the best of you? Here are three points to follow

First of all, have a plan (and prioritize). If you have carefully thought out what you want and can afford, then if you actually find it and get into contract, you’re far less likely to be upset!  If you stumble into a home that’s open, fall in love and make a purely emotional decision to write an offer, you’re far more likely to freak out! Make sure that your plan includes doing your financing decisions before you ever go house-hunting.
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In a buyer’s market, few want to buy, and in a seller’s market, few can buy

Deep seller's marketSome of my buyer clients had been looking casually for the last 2-3 years and now are in a bit of a panic.  Not just any panic, but an exhausted, sick-of-looking panic, accentuated by the fact that prices are now rising pretty noticeably and their buying power is diminishing.

Why is it than when it’s a buyer’s market, and prices are soft and inventory plentiful, buyers are so picky – and when inventory is scarce, and buying conditions terrible and there are gobs of multiple offers, most of them clamor to purchase something, almost at any cost or in any condition?

As real estate professionals, we see this happen as the cycles change.  But it’s very hard, in a buyer’s market, to tell a Silicon Valley home buyer: “hey, you’re lucky, buy now, while it’s easy!” because it always looks so self-serving (since we are only paid if the buyer buys and closes on the transaction) and a buyer’s natural response to this is “hey, don’t push, I’m in no hurry!”  So we tend to step back and let the buyers go at their own pace.  When the market turns, we tell our clients that it is a different game now, but often these home buyers don’t believe us for several months.  Eventually, though, it sinks in and gets so bad that they are nearly despondent and wondering how this could have happened.

Tonight I got an email from avery  discouraged San Jose area home buyer. She told me that they saw an open house of a place that seemed like a good fit, but that it was so packed with people that it felt like a “black Friday sale”.  She told me that when they left that house, she was in tears.  I knew what she meant. I have seen that frenzy, too, due to far more demand than supply. In fact, I showed a Sunnyvale townhouse during an open house on Saturday and it was exactly like that.  I bet the agent gets 20 or 30 offers. (more…)

Do Lots of Research Before Deciding to do a Short Sale on your Silicon Valley Home

Homeowners who are in financial trouble with their property sometimes wait too long to seek help, and then cannot mitigate the situation with a loan modification, a short sale or a deed in leiu of foreclosure. They wait so long and miss so many payments that significant harm is done.  The embarrassment, the sense of failure, the significant feelings of loss can keep home owners from reaching out for advice and guidance. This is happening on a big scale and is happening within my own close circle of loved ones too.

Recently a friend of mine, with whom I’ve done several transactions, informed me that she’d done a short sale with her home through a local attorney and hadn’t wanted to bother me with it, though she knew I’d have been willing to help.  (She was right: I would have.)

I was stunned on several counts, most of all that we hadn’t talked before she did it; I truly think it matters tremendously to do a good amount of information-gathering, and talking with trusted sources, before pulling the trigger on something big like this.  But very often, people become more private when under financial pressure. (Others are virtually in denial.)  This really just makes things worse since they may make huge decisions with insufficient information.
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Why Good Realtors Refer Buyers and Sellers to Lawyers and Tax Professionals for Some Questions

There are a number of things which are related to the purchase and sale of real estate which require the professional guidance of those other than your Realtor, namely a legal or tax professional.  This sometimes surprises consumers.  Once I was discussing one of these areas with a prospective client and she felt quite frustrated and exclaimed, “you know the answer, you just won’t tell me!”  That was many years ago, but I’ve never forgotten it.  Many Silicon Valley home buyers and home sellers assume that they’ll never need to talk to a tax or legal professional, and if advised to do so, may balk.

So let’s talk about it.

In other states, such as New York, attorneys are very involved in real estate transactions. Here in California, though, that’s not the case most of the time.  We call on CPAs and lawyers when there’s a problem or a question which is beyond the real estate licensee’s scope.  I’ll provide a few examples.

Holding Title: Probably the most frequent question I get that I’m not allowed (or qualified) to answer is about how people should hold title when buying a home.  The purchase agreements we use (both CAR and PRDS) lay it out best and puts it in bold so that consumers don’t miss it:

“THE MANNER OF TAKING TITLE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL.” (newest revision of the CAR contract, April 2010)

Most title companies have a nifty little chart that summarizes the pros and cons of the various ways in which people can hold title.  But neither the escrow officer nor the real estate agent can tell you what’s best for you.  We know what’s most common, but that doesn’t mean it is best for you and your particular set of circumstances.  So talk to a CPA or talk to a lawyer (or both) if you do your research and are at all unsure of what to choose! (Old Republic Title has a summary of the most common ways to hold title in a downloadable pdf file, which you can access via this link.)
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