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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Best real estate buy in Almaden Valley

Everyone wants a good deal, and in this article I’ll be featuring great Silicon Valley real estate home buying opportunities.

Normally I don’t write about other agent’s listings, but the listing agent in this case is a friend of mine, Azita Alaverdi, and I have her permission to promote this home.  (Her site for it is:  http://21720calerocreekalmaden.com/ )

Today’s listing (10-25-2015) is a fantastic 15 year young Almaden Valley property close to Calero Reservoir.  Located at 21720 Calero Creek Court, this 4 bedroom, 3.5 bath home enjoys 4330 SF of living space set on over an acre.  It is mostly a one story home but there is one bed and one bath on an upper level.  Offered at $1,995,000, this home is a tremendous bargain!  (Price per SF cost is $460.74. – more typical might be $490 per SF.)

This property is a fantastic opportunity in a quiet, scenic location!  Looking to buy a luxury property in Almaden?  Give me a call – I’d love to help you to purchase this beautiful home!

Good deals don’t last – if you are interested, HURRY!

We're sorry, but we couldn't find MLS # 81516581 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

 

 

 

What does it cost to buy a home in Saratoga? Are there any affordable homes for sale?

Orchard and Hills in Saratoga, CaliforniaSaratoga is a scenic, historic city with great schools, parks, beautiful neighborhoods and a very attractive downtown, “the Village“. This upscale community values its rural nature, and at the same time is home to some of the most expensive estates in Silicon Valley.  A typical house in average condition may cost anywhere between $1,500,000 to about $1,900,000 in today’s market.  Condos will usually be well under a million dollars, though sometimes over.

But does the fact that the normal price is so high, or that there are luxury homes, view homes & estates in Saratoga make it out of reach for everyone?

Not entirely.

Although best known for its tony neighborhoods, there are opportunities to purchase in this highly sought after and well regarded city without spending a million dollars or more.  Nothing in Silicon Valley is inexpensive, of course, and Saratoga is no exception, so the cost of housing here must be viewed in relation to the region as a whole.  It is certainly possible to buy a home in Saratoga for under $1,000,000. Today we’ll look at the strategies for getting in at the smallest price possible.

More and less expensive: school districts and location in Saratoga

Saratoga, like much of Santa Clara County’s cities and towns, has a fewl school districts.  Several things drive home values, but a key driver is the school district.  Areas where the local public schools have high API scores (all level of schools over 900 API) will command a premium – namely the area with the Saratoga or Cupertino schools.  Looking for a more affordable part of this lovely city? Consider the section which is served by Campbell schools or the Campbell Union High School District (the northeastern part of town).

Even within the Saratoga or Cupertino school areas, there are tiers of pricing.  Homes will be very highly valued if they are in close proximity of Saratoga Village (what some would call “walk to town”).  Also well regarded are neighborhoods which are very close to schools, shops, parks, or anything attractive.  The areas west of Highway 9 or Saratoga – Sunnyvale often sell for a bit more than those further from the hills too.

Something else to consider, especially in a market as tough as the current one, is choosing a home with a “location issue” such as being next to (or backing to) a busy road, too close to a shopping center or freeway, etc.  There are often very good discounts to be enjoyed when buying a house adjacent to something not ideal.  If you are not someone who spends a lot of time outside, this may be a great compromise for the budget minded home buyer, since often with double pane windows, it’s nearly impossible to tell indoors when the windows are closed.

Property type, size and condition in Saratoga

Condominiums and townhouses are often a great alternative for Silicon Valley home buyers who’d like to own, rather than rent, and enjoy the benefits of living in a wonderful community like Saratoga without either the maintenance or the cost of purchasing a house with a yard to look after.

Sometimes there are very tiny houses, or cottages, too.  In 1996 I sold a 1-bedroom house that was all of about 800 square feet on 4th Street in Saratoga. Not surprisingly, it was later torn down and a brand new house was built in its place. (more…)