Are you motivated enough to buy a home?

Quote on being motivated and determined This is a tough market for home buyers. If you aren’t sufficiently motivated, you may write offers, but you won’t be buying a house.

I am a member of several online groups of Realtors and other real estate professionals who share ideas, give feedback, marketing, challenges, safety or tech tips, and more. Sometimes these groups are support for weary real estate agents.

Just now I read one agent in the deep south complain that her buyer won’t pay more than list price “on principle”, despite what the comparable sales indicate the value to be, despite the market conditions, 20 offers on a house, etc. She cannot get that buyer’s offer accepted because the buyer is staunch on offering exactly list price in every instance, and it’s just too low to be viable.

The real estate sales person has explained the market,  the competition, the sale to list price ratio, but the buyer does not care about the data. The buyer only wants to pay list price, even if the house is under priced.

Guess what the 200+ real estate professionals advised her to do? If you guessed “fire the buyer“, you’re right. And I agree. She is not able to help him to buy a house. She is spinning her wheels. (And while doing so, she’s unable to help buyers who will buy, or to find new business so she doesn’t go broke working on something hopeless. As a business person, she either needs to help the buyer to write viable offers or she needs to let him know that she cannot assist him further. She’s not doing him or herself any favors to continue working with him under those circumstances.) (more…)

Visiting an open house? What to say, and what not to say, to the listing agent if you really want the property.

Open House Behavior TipsSilicon Valley real estate professionals will usually do open houses while marketing their listings, and at these events, they have the opportunity to meet new people who may be interested in the property.  The potential home buyers who truly want the condo, townhouse or house would do well to know that in a hot seller’s market, their behavior at the open house could influence the ultimate outcome as to whether or not they will be the successful bidders when it comes time to present the contracts.

Here, then, are a few tips for aspiring home owners – a few thoughts, Dos and Don’ts  on how to help move the odds into your favor when meeting the listing agent or a colleague of the listing agent’s when visiting the home.

    1. Think of the open house as not just your opportunity to check out the property, but also for the seller’s agent to check you out.  Many people may want the house, but only one buyer or couple will get it.  Make a positive impression.
    2. Do either remove your shoes or at least ask if you ought to do so.  (Or come with your own shoe covers.) Usually the property will be clean and the sellers and their Realtor will want it to remain that way.
    3. Do say hello to the real estate licensee at the home and introduce yourself with your first or full name. If you are working with an agent, tell him or her so. Often you will be seen as a more serious home buyer because of that.
    4. Many agents will ask you to “sign in”.  If so, do that but also make a note there of who your agent is (assuming that you have a buyer’s agent) since often these sign in sheets will be used for follow up and you want to be transparent that you already have your own agent. If you don’t, by the way, you should! If there’s no sign in sheet, do tell the agent that you have a Realtor so that he or she knows this upfront.
    5. Need a Realtor?  Want the listing agent?  Careful there….  If you love the house but do not yet have your own real estate agent, be careful about the way in which you ask the listing agent if he or she can represent you (if that is what you want – which I do not recommend, see related reading notes below*).  Sometimes total strangers will approach the person holding the house open and say things that imply that they do not value the agent’s expertise at all – that they believe that the agent is only an order taker who will complete the paperwork and get a huge commission, of which the buyer wants a slice.  This is not a heart-warming comment to make and in fact is pretty insulting.
    6. Be respectful.  Ask good questions but be careful about what you say regarding the house.  Potential buyers who walk through the house insulting it loudly (I have seen it happen) will irritate the listing agent because that kind of behavior is just unnecessary and nasty. Even asking questions with a really negative edge or tone will make the Realtor wonder if you are “difficult” to deal with.  Keep it pleasant.  Calling an updated home a “fixer” can be off-putting, for instance.
    7. Want to take photos or video?  ASK.  Do not presume it’s ok to start taping or shooting pictures without permission.
    8. Kids:  along the same lines of respect: do keep your kids with you and do not let them run wild or “play” rambunctiously.  Do not let them go onto beds or jump on furniture. It is ok to look in closets or to open kitchen cabinets, but no one should be opening dresser drawers or medicine cabinets.
    9. Need to use the restroom?  ASK.  And then be very careful that it’s clean when you’re done!  Most Realtors have horror stories of parents letting a child use a restroom at an open house and leaving a nasty mess behind that they don’t clean up.  Don’t do it.  This is someone’s home, not a public building.  (And the agent probably doesn’t know where the Lysol wipes are.)
    10. Love the home?  Look serious.  If you are there a very long time, the agent will believe that you are serious about the house.  If you come back the next day with more people, the agent will believe you’re serious about the house.  If you ask some good, thoughtful questions and even take notes, the agent will believe you’re serious about the house.  All of these things will get you noticed and put you on the radar.  If, however, you slide in and out unnoticed, and you never chat with the Realtor there, you will probably not be remembered unless the open house was exceedingly quiet.  With multiple offers, it is best to be perceived as someone serious – so best to be noticed in a positive light.
    11. Do not dominate the listing agent’s time.  It’s good to engage with pleasant conversation and thoughtful inquiries about the house, but please remember that this person must try to connect with everyone there and make sure that others’ questions are answered too.
    12. When it’s time to leave, thank the Realtor holding the open house and say goodbye.
    13. Don’t arrive once the open house is scheduled to be closed. Realtors sometimes have appointments after the open house and don’t want to rush you, but getting there after it should be closed puts them in a bad position.

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Do you have a strategy for buying a home in Silicon Valley?

Home buying in Silicon ValleySilicon Valley is mired in an extraordinarily deep seller’s market, and has been for a couple of years now. Want to buy a home?  No one who understands the market at all will tell you that it’s going to be easy.   If you are serious about becoming a home owner rather than a shopper, it’s time to get serious about what it will take for that to happen.

In a deep seller’s market, it’s very helpful to have a game plan or strategy for purchasing a home.  The best place to begin is with an understanding of your competition and the inherent risks of buying in this climate.

  • Approximately 30% of all sales in this area are “all cash”.  Not all cash buyers are savvy and may make mistakes (such as vastly overestimating the value of a cash offer – sometimes the lowest price comes from a buyer without financing).  All cash buyers need to be educated, too.
  • When homes sell in under 2 weeks and with multiple offers, there’s a very good chance that the winning bid came in with no contingencies for inspection, loan, or appraisal.  Sometimes it’s all cash and non-contingent on the normal items.
  • Most home buyers will have done a lot of research on how to compete in multiple offer situations.  A few years ago I wrote a series of tips and they are still good today.  Major hint: it’s not always only about price or even primarily about price.  The terms matter, and so do a few things which are harder to measure (and can include all sorts of things – even whom you hire to work with you on the purchase).  https://sanjoserealestatelosgatoshomes.com/summary-of-tips-for-multiple-offer-situations-silicon-valley-real-estate-contracts/
  • If you dawdle, you risk being priced out of the market.  Sometimes when beginning to shop, home buyers who are new to the game feel that they have power and can “wait until the market improves”.  The problem is when there is deep scarcity of inventory and a ton of amply able buyers, the prices are going to go up steeply.  If you take a year to buy, most of the time – unless you are extraordinarily lucky – it will cost you dearly.  I have seen buyers wait so long that they basically used up their entire down payment.  Since 2 years ago, prices are up about 25% to 30% in most of Santa Clara County and the San Jose area.  If you have been looking for 2 years, your down payment has been spent.  This is a real case of time versus money.
  • The greatest fear that buyers have when purchasing in a raging seller’s market is that there will be a correction or crash, and they’ll be left with an over-investment   in real estate.  Put another way, they don’t want to overpay and they really do not want to be upside down in their home.  No one wants to overpay.  But right now, many homes that sell will not appraise (many do, but quite a few don’t).

So that’s the starting point – steep competition, a lot of “all cash” and a lot of “no contingencies” – when it comes to homes newly listed and gleaning multiple offers right away. (more…)

Selling Your Silicon Valley Home? Don’t Cut Corners: It Will Cost You!

A while back, I showed a newer home in San Jose’s Cambrian area to some great first time home buyer clients of mine. The house has a nice location and fine floor plan. Some elements of the home were really appealing. But unfortunately, the sellers hadn’t made their home “show ready.” They cut corners.

Confident Buyers vs Nervous Buyers
As we walked through the property, my clients and I noted places where there was neglect. The items were generally not big, but unfortunately there were many of them. Had the owners brought in a painter to do minor cosmetic changes (patch and paint), the home could have looked “like new.” Instead, it was as if the home were full of red flags. Talk about making a bad impression!

My buyers asked me what I thought, if what we saw would scare me off.  No, I told them, they all seemed relatively minor to me,  but I did understand their concern.  One of them explained that “if we see things like this, we believe that the sellers have not taken good care of their home; what else is wrong that we cannot yet see?”

Confident buyers write offers and tend to write good offers.  Nervous buyers who are concerned that there are hidden defects (and therefore hidden costs) either don’t write contracts at all or they write lower offers.
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Price decreased or several weeks on the market often means no multiple offers – and that’s an opportunity for weary home buyers

Old ListingsThe real estate market in the San Jose – Santa Clara County and San Mateo County areas has been brutal for folks wanting to purchase property.  With multiple offers and large numbers of cash offers or non-contingent offers being so prevalent, it can seem impossible at times.

Discouraged home buyers should consider looking at overlooked properties, those which have been on the market for awhile and yet remain unsold. Most often, the difficulty with these Silicon Valley homes is that they are simply overpriced.  Sometimes the problem is that the showings are too severely limited, so most buyers have gone elsewhere.  It’s not unusual to see poor marketing overall, either: bad descriptions, bad photos, bad exposure. And at times there is a more significant issue at play, some sort of problem with the location or home itself.

When houses, condos or townhomes do not sell within a month, most buyers assume that there’s something wrong with them.  The thinking is that if they were all right, it would have sold – so there must be an issue.  They are right, of course, but usually the issue is fixable!  And most of the time, in my experience, it’s not even related to the property itself, but to the marketing (which includes the price).

Look specifically for homes that have been on the market for 30 days or more, for properties where the listing price has been decreased or should have been by now.  Research the expired, canceled and withdrawn listings too.

 

Related Reading:

Buying in a seller’s market? Do not expect a perfect house or condo!

What If Your Silicon Valley House Doesn’t Sell?

Let’s list high, we can always come down later

 

 

 

Want your Silicon Valley house to sell? Make the temperature comfortable so that buyers linger longer!

Rainbow of home temperatures

Keep the temperature of your home for sale in a comfortable zone so that home buyers linger longer!

The other day I showed a vacant home in the Evergreen area of San Jose that was easily 95 or 100 degrees in the master bedroom, perhaps more.  Yes, we’re in the middle of a Silicon Valley heat wave! But the owner’s suite had no curtains and faced the blazing afternoon sun.  More importantly, though, the house has central air conditioning, but it was turned off.  Completely off!

Why was the A/C not turned on when it was 90 or 100 degrees outside?  The seller did not want to spend the money.

Here’s an important piece of the home-selling puzzle: the longer buyers stay at the property, the more likely they are to want to buy it.  So home sellers, make it so that your buyers will want to linger!  If they dash in and out, you can pretty much forget that visit resulting in a sale. In our case, we quickly left because our visit went from uncomfortably warm downstairs to intolerably hot upstairs.

I see this with homes in winter, too, where home sellers don’t want to pay for  heating when they’re not living in the house. They  turn the heat either all the way off or so such a low number (in the 50s) that buyers are uncomfortable the whole time they are seeing the home.  Similarly, those buyers leave to find relief in a warm car – and seldom either come back or consider writing an offer.

Heat and cooling to make a home comfortable is not a waste of money.  It’s a type of staging.  Just as we want the house to be clean, uncluttered, and looking its best so that our seller clients make the most money possible from the sale, we also want the home to feel comfortable in terms of temperature (and smell nice too!).  All of these things matter if you want to leverage this important asset and sell for top dollar.  To turn off the heat in winter or the cooling in summer is counter-productive to your and your real estate agent’s goals.  Keep it comfy!

Addition resource for Silicon Valley home sellers: http://SellingYourHomeInSiliconValley.com/

Overheated market, overheated emotions

Overheated MarketThe Silicon Valley real estate market is so overheated in many segments (some areas, some price points) that there’s a lot of exhaustion to be found among consumers, Realtors and others involved (inspectors, title company employees, etc.).  Why is that?

  • Home buyers in the San Jose area are finding that most of the time, they have to write a few offers before one can get accepted. The rejection is both disappointing and exhausting, and every successive attempt is stressful since most buyers understand that with multiple offer situations, the odds are against them.
  • Home sellers in Santa Clara County are finding it a challenge to work like crazy to make their property as close to ideal as possible, only to find that multiple offers either aren’t ideal (or still seem scary, if they are ideal) or perhaps they don’t come at all. Even in a hot market, not every home sells!  Some home owners work so hard at fixing up their house or condo to sell that they somewhat fall in love with it all over again…and that makes it hard to sell. Their pre-sale exhaustion also can make them prone to feeling overwhelmed.
  • Real estate agents or licensees are exhausted because there is so much URGENCY that it’s hard to get any down time (let alone a day off). Most real estate licensees  I know are really burned out – or very close to it – due to working 24/7 for the last 2+ months.  (Buyers are very time consuming and may require many many attempts before being successful in getting into contract. Sellers may have worries and find themselves needing a lot of reassurance – even when it’s not really urgent at all.)

Together with the extra stress of the market which changed so fast are a LOT of emotions (as well as mistakes that might not be made if everyone were calmer and better rested).  Buyers grieve when they lose the house.  Sellers worry that they sold too fast, too low, too easily.  Buyers, when successful, worry that they have overpaid (“buyers remorse“).  Agents are burning the candle at both ends and can find themselves a little frazzled too.  Sometimes when our clients have a bad day, they can make it contagious by yelling at us or otherwise being overly difficult because they are stressed. Even agents dealing with other agents can be a headache if the other one is upset, burned out, sloppy or emotional.

Time out!  What most everyone needs (myself included) is a breather.  Everyone needs a little time, a little down time, to feel a bit more human.  Take a day off. Decide not to answer the phone or email before or after set hours.  As for me, I’m going to work on that.  I hate to see email accumulate in my inbox, I feel like I have to address it right away (as if it were a text message about a house burning down).  But being in reactive mode, no matter who we are, is not so good in the long run. When the going gets tough, it’s more important than ever to get enough sleep, exercise (esp time away from the computer) and diversions.  Too much intensity can make for more friction, and in the long run, that is bad for the transaction, bad for our relationships and even bad for our own personal health.

So in this overheated, stressful market – let’s all try to step back enough so that we can clear our heads a little and keep a semblance of balance. It will make for better real estate transactions in the long run, no matter whether we are buying, selling, or assisting clients as realty professionals in the South Bay.

More reading:

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

Impulsivity and caution in home buying

 

 

 

The Cross-Cultural Real Estate Experience: Buying and Selling Homes in Silicon Valley vs Other Places

Buying and selling homes is stressful no matter who you are or what the occasion may be.  It is even more difficult for those for whom English is not their native language and for whom the US is not their native land.

First there’s a language challenge (depending on English fluency).  Even more, there’s a cultural challenge in terms of how homes are bought and sold. Add the normal stress to the cross-cultural confusion and there’s a recipe for misunderstanding, bafflement, surprises and upset.  One of the biggest areas for clashes is how negotiations are carried out.

I have had the pleasure of traveling to many places around the globe and to live in Italy for the better part of a year while in college (in Florence, and yes, I loved it).  I remember very vividly some of my own cultural frustrations and although I was fairly fluent, missing a whole lot of social cues. I had to work to learn to negotiate for simple things like fruit and sweaters in the open air markets.  And I was just 20, not trying to purchase anything as significant as a house or condo.

My clients today come from all over. Typically, at any given time, more than half of my clients are foreign* (and I love working with them and hearing about their experiences, customs and traditions).  Every once in awhile,  we discover that buying and selling expectations are vastly different from Silicon Valley to wherever they came from. Here are a few:

  1. Expecting to negotiate at every turn, starting from the time the seller accepts the buyer’s offer and continuing until close of escrow (not done here: you negotiate at most two times – first when writing and countering offers and second prior to removing contingencies, if something new is learned during the course of the inspections.  If you negotiate at every opportunity, you will have everyone angry at you!)
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