What makes an offer lowball?

Lowball offer - baseball with the word LOWBALL imposed over it - what makes an offer lowball?Silicon Valley real estate offers few simple answers but many recurring questions. One of them is whether or not you should write a “lowball offer“. So the first question is this: what makes an offer lowball?

What makes an offer lowball?

In general, contracts with prices more than 10% lower than list price will be considered low at best, and insulting at worst, but there are many nuances, and this may not always be the case.

  • What is typical for the area? If most properties are being sold at 10% lower than list price, then 11% or 12% won’t be viewed too dimly if the home has been on the market for a while.
  • How long has this piece of real estate been listed for sale? What might seem low in the first week might look OK after 3 weeks.

What’s the immediate market climate like there?

What makes an offer lowball is above all related to what is happening in that precise micro market. It’s entirely relative to how the market in that area (not the county, not the state, but that particular area) is selling.

If houses in one area of San Jose are selling within plus or minus 1% of list price and you come in 5% under, the seller may feel that your offer was not in good faith, that the offer is insulting, or you are not a serious buyer who takes the opportunity to buy seriously.

Listing syndication matters to buyers and sellers

Listing syndication - you may be missing 15 percent or more if that is all you're seeingListing syndication matters to buyers and sellers, even if they don’t know it!

What is listing syndication?

Listing syndication refers to the distribution of listings of homes for sale to other websites from the multiple listing service or MLS. The information about the home is input into the MLS for members online, and also for those visiting the MLS directly as guests or those receiving email updates from that system. When it’s sent further, say to Realtor.com for example, that’s syndication.

Put more simply, listing syndication is distributing and displaying listings online.

Today most listings can be found on real estate web portals large and small, including real estate agents’ own websites (we have it, too). On real estate agent websites, that is accomplished through either an IDX feed (Internet Data Exchange) or VOW (Virtual Office Website). The main difference between IDX and VOW is that with the VOW more can be displayed, but it’s behind a login / password wall. The IDX feed shows information without having to register.



Why it matters for home sellers


Should You Buy or Sell Your Silicon Valley Home “As Is”?

For Sale As-IsWhat is an As Is Sale?

Many Silicon Valley home sellers want to sell their homes “as is” (or “as-is”). And most homes in today’s market are. But what does that mean, exactly?

Does it mean that the seller has made no repairs or renovations before listing the home? Or that they do not have to disclose if something is broken to a potential buyer? No.

As is means that the home will be conveyed to the buyer at the end of the transaction in the same general condition it was in on the day that the buyers wrote the offer. If the roof has leaks, the crawl space is full of termites, and the appliances do not work, that is how it will be on the day escrow closes.

What it means is that the seller cannot let the property condition deteriorate during the course of the escrow.

The seller must continue to maintain the home and land in the same general condition. So if the lawn was green and well trimmed, the seller cannot suddenly let the grass die and neglect to mow it. If a baseball breaks a window after the buyer and seller have entered into contract, the seller must repair it. The condition will not have to be better, but it should not be worse than it was on the day the buyer and seller agreed on the price and terms of the sale.

While the contracts most agents use in Santa Clara County and nearby today have “as is” as the default sales agreement, that doesn’t mean all sales are as is.


Want to Buy a Home? Save, Save, Save as a Permanent Way of Life

Are you interested in being a first time home buyer? A first priority will be learning to save, both for buying the home, and then for keeping it in good shape. There’s more to it, but that is usually the hardest part.

credit cardsWhere do you begin?

  • Having a budget will enable you to figure out where you can save more and spend less
  • Clean up any errors on your credit
  • Create a home buying plan

Save with a Budget

Creating a budget can be tedious, and admittedly it’s not fun, but it is immensely helpful if you want to get control over your finances (rather than have your spending control you). There are many free, online programs from financial gurus who can help you sort out what you need to factor in and where you may be able to cut costs, save for that house or condo (or retirement), and what is essential versus discretionary. Investopedia has a list of good sources. (I’ve used the Every Dollar one, it’s easy!)

Something to keep in mind is that having a budget and a plan to save is not something temporary, like a diet before a vacation that will be abandoned in the near future. Budgeting so that there’s money set aside for the most important things you want is a way of life. We intuitively know that if we spend all of our hard earned income on meals out, expensive cars, and luxury vacations, we may not be able to retire as early or as comfortably as we’d like. But unless we create the financial life we truly desire, it won’t happen. That’s as true for buying a home as it is for the retirement scenario. (more…)

Buy a home in 2018 – where to begin?

Buy a home - school desk photo as there's much to learn!The idea of buying a home, especially a first one, is both exhilarating and overwhelming. Where do you begin if you want to buy a home in 2018?  If you want to purchase real estate in Silicon Valley before the year is over, you’ll need to get a number of things in order, including hiring professionals to help you.

Purchasing now, in this multiple offer market requires strong credit, a healthy down payment with set aside for reserves and improvements after closing, time and energy,  and no small amount of courage. Looking halfheartedly means you will see properties, but not buy.  After the down payment, probably the most important element you’ll need to have is commitment, and further, you’ll need a strong team of professionals to assist you. Let’s talk about a solid home buying strategy. (more…)

Got dogs? Buying a home may be much easier than renting one.

Dog in Los GatosGot a dog? Many Los Gatos residents do – which is ironic when you consider that the town is named for cats (Los Gatos = The Cats).  The household pooch can, for many, make a house a home.  But if you’re a renter in Los Gatos or anywhere in Silicon Valley, it can also make it a challenge to find a place to live.

Why the fuss about dogs?

Landlords always worry that tenants will destroy their property, causing the need for loads of repairs later.  Having either smokers or pets increases the risk of property damage.  Additionally, dogs tend to be noisy, most with barking at strangers but some howling, too.   For townhouse or condo residents, this is cause for complaint from neighbors and the HOA.

Of course, not all canine situations are the same.  If you own a small, quiet dog, it will be much different than if you have a pair of Great Dane or Beagle puppies.  Some places may have restrictions on the animal’s weight, others on the breed (with certain types of dogs such as pit bulls, rottweilers or dobermans prohibited).

Cats are a little easier, in part because they’re smaller, quieter, don’t need to be let out to relieve themselves, and often can inhabit a property with little annoyance to those nearby.  But some felines spray, scratch curtains and can be destructive, so while the restrictions on dogs are pretty common, there’s often a bit more flexibility with cats, but it’s far from absolutely easy to rent with cats.

The Humane Society has tips for pet owners who are looking for a rental.  Great advice here:


Right now, the Silicon Valley housing market is very tight, with limited supply of inventory both to rent and to purchase.  For people with multiple pets especially, though, it may be easier to buy a home than rent one (if the down payment is available) since landlords can have all sorts of animal restrictions, and if you are able to rent with them, the cost will undoubtedly be higher each month.    When buying, many prospective purchasers include personal letters and sometimes photos.  A friendly looking pooch may be a help in your securing that next home, too.




Should You Write a Lowball Offer on a Silicon Valley Home for Sale?

If you’re out to buy a Silicon Valley home this year, you may be tempted to look at real estate priced far above your ability to pay and hope that you can write a low offer that the seller will accept.

Don’t count on it.

Lowball offers are contracts written substantially below the list price (and often well below market price).  How low is too low? It really depends on the micro-market of the home you’re interested in (the neighborhood, price range, school district, etc.).  In most of Silicon Valley, houses, condos and townhouses sell within 5% of list price most of the time. The average list price to sales price ratio is usually closer to 1 – 3% of list price.

My usuall advice to buyers is this: if you don’t think that the home is worth within 5% of list price, then keep looking until you find a home that is.  Most of the time, sellers aren’t prepared to come down more than a few percent.

Want to Buy a Home in Los Gatos? Here’s Where to Start!

Are you interested in, or thinking of, buying a home in Los Gatos? If so, there’s a Los Gatos homebuyer “start kit” page full of information targeted directly at the needs of Los Gatos homebuyers. Whether you want to browse houses, condos, or neighborhoods, you’ll find tools to help you begin your homebuying journey there. It is a launch pad for loads of information, including:

  • Los Gatos homes for sale – view by map
  • Los Gatos homes for sale – broken down by price point
  • Los Gatos real estate market reports
  • Los Gatos home sales prices by map
  • Information on Los Gatos neighborhoods, subdivisions and areas
  • Information on Los Gatos schools
  • Photos of Los Gatos
  • Information on Los Gatos history, architecture, parks, and more

Please stop by and bookmark this site. It’s a very helpful “starting point” for buying a home in Los Gatos.




So You Think You Want To Buy a Silicon Valley Short Sale?

You want to buy a Silicon Valley short sale - we should discuss riskYou want to buy a Silicon Valley short sale? Be careful what you wish for! There can be unpleasant and expensive surprises ahead. We’ll go over the risks.

The lure of a short sale

The news stories make it sound so attractive – get a home for 10% less than market value. That may happen. Sometimes.

The national average for short sales actually closing is extremely low, by some counts as low as 10 or 11 percent.

What about San Jose area short sales? Lets start with the lay of the land in Santa Clara County specifically (Silicon Valley includes Santa Clara County and a bit of Alameda, Santa Cruz, and San Mateo Counties). Some areas are loaded with short sale listings, others have few, if any.

You Want To Buy a Silicon Valley Short Sale – do you care where it is, or only that it’s cheap?

The best deals, in terms of low pricing, are going to be in areas with a lot of the short sales because they sell for less and pull property values down, making them more and more affordable. Those are the areas with lower priced homes, generally, the entry level areas where perhaps the buyers didn’t have great credit to start with.

In places like South San Jose, the south county areas, and Blossom Valley, for instance, most of the entry level homes are short sales. Values are plummeting there.

In places like Cupertino, Saratoga, and Los Gatos, there are hardly any short sales. Virtually none. And home values are rising.

Sometimes buying these distressed homes can pay off for some buyers.

If your goal is to purchase an investment property, this may be a good strategy for you. (We’ll go over the risks shortly.)

If you can afford one of the rare short sales in the higher-end neighborhoods, this can be a good opportunity for you. No guarantees, but if you can purchase in an area that’s appreciating, you may be able to get equity in your home without waiting years for the market to recover.

Risks in getting into escrow on a short sale