Contingencies have not been used as much in recent years due to our overheated Silicon Valley real estate market, but with some cooling in the market, we are beginning to see them make a return, so this is a good time to provide a refresher on the subject.
Today we’ll go over what a contingency is, who gets contingencies, what a contingent offer means, and other considerations on how contingencies work overall. This is just an intro article for the basic concepts, but we’ll provide links to more in depth info elsewhere.
What are contingencies?
In real estate sales, contingencies can be a permitted way that one party may back out of the purchase agreement. Of course, those contingencies must have been written into the purchase agreement and agreed to by all parties upfront, when the offer was ratified.
If the offer is accepted with a contingency, it must be satisfied and removed within the set number of days for that contingency, such as 7 or 10 days. If the loan is not approved in that time frame, the buyers may request an extension to try to find other financing or fix whatever is amiss with the current lender, or they may just back out (and normally they would get their full deposit returned to them unless they somehow billed something, like an inspection, to escrow, in which case the bill would be paid and then they’d get the balance back).
Be aware that the number of days requested will be less enthusiastically viewed if they are long, or if they cover information that has already been provided upfront. For example, if buyers got the HOA docs before they wrote the offer, sellers won’t love seeing a contingency to review the HOA documents in escrow.
Long contingency timeframes may hurt the buyers’ odds of offer acceptance, particularly in multiple offer situations, where often completely non-contingent offers may be the norm in our market.
Buyers doing their due diligence makes sense. Among the worst offers for sellers to get are blind offers (sight unseen, sellers’ disclosures often not reviewed) with contingencies. Home buyers who come prepared and taking the offer process seriously will be appreciated.
Who gets contingencies, and why?
Most of the time, if there are any contingencies, they are the buyer’s. These are the most common contingencies in Silicon Valley: (more…)
Multiple offer situations have returned to many segments of the Silicon Valley real estate market, particularly for houses. We are hearing about them all over due to the incredibly low inventory. (Check out the San Jose real estate market analysis for the latest, custom stats.)
What Silicon Valley home sellers need to know and do to attract multiple offer situations
If you’re a Silicon Valley home seller, what do you need to know to try to get multiple bids on your home? What should you beware of? In short, here’s what needs to happen if you want to attract throngs of home buyers on your home for sale:
The home must be turnkey, either fully remodeled or close to it – it must look like there’s nothing or very little for a buyer to do. In addition to being turnkey, it must be squeaky clean and well staged! It needs to be comfortable – not too hot, not too cold. You want buyers and their agent to linger longer.
The price must be at or even under market value. That is, you must be willing to price it aggressively. Think it’s worth $1,050,000? You might list it at $999,999 to get in under a major price threshold and to be the very best, most attractive property for the money. Yes, it might be under priced. Over priced listings get either one offer at best or, more likely, none at all.
The property must be highly accessible. If it is hard to see, you probably won’t get multiple offers (and may get none at all). (Please see articles on accessibility and on open houses.)
Finally, the property must be well marketed. This includes a wide range of factors ranging from photographs, text, fliers, signs, and even the commission rate offered to the buyer’s side.
What Silicon Valley home buyers need to know and do to compete in multiple offer situations
If you’re a Silicon Valley home buyer, how do you win out in multiples without giving away all of your rights or overpaying for your house/home? (more…)
Not everyone is familiar with the term “patio home” or “zero lot line” house when searching for Silicon Valley real estate. Awhile back, a listing agent of such a property called me for feedback and when I told her that my clients did not want a zero lot line home, she didn’t know what I was talking about. She had no idea that this term applied to her listing!
So I thought maybe this topic deserved a little more attention.
What does zero lot line mean?
With most houses, the structure is set into the lot or land such that the property boundaries are at least a few feet away on all sides – often 5 or 8 feet. One common exception is garages in older parts of Willow Glen, Los Gatos, downtown San Jose, etc., where often these buildings were set directly against the property line on one or two sides.
When a house is right up against the property line, directly on the line, that’s referred to as a zero lot line and is usually referred to as a patio home. To view that wall, you’d literally have to go onto your neighbor’s lot to have a look. Although this is not terribly uncommon in dense, urban areas, it’s fairly infrequent in Silicon Valley.
Why are homes designed on zero lot line properties? The main reason is to increase the density while providing more yard to the home owner. Rather than having two 8′ side yards, perhaps you’ll have one much larger 16′ yard.
Interestingly, these houses do not always sell for less with the zero lot line – at least not that I have been able to discern. (That’s counter-intuitive….)
How can you tell if it’s a zero lot line house?
It should be disclosed in the MLS as such, but often isn’t (sometimes the listing agent doesn’t even know), so you’ll have to look carefully at the neighborhood and the property to see. Here are some clues: (more…)
Just starting to house hunt? Today we’ll go over what to expect when viewing Silicon Valley homes for sale.
First, though, if you aren’t aware, there were real estate changes a year ago in the way the home buyers and their buyer agents work together. There now must be a written agreement between them that covers compensation. The link above will bring you to an article of ours that clarifies it.
Viewing Silicon Valley homes – some basics
There will be some nuances between private showings and viewing Silicon Valley homes during an open house, but here are some basics:
Many home sellers in the San Jose area will ask that you remove your shoes. So wearing slip ons of some kind will be a lot easier than footwear with laces, buckles, zippers etc.
Most of the time, sellers will not be home. They wisely will clear out, when possible, to give you the space to look without feeling like you’re imposing on them. Sometimes, though, for any number of reasons, this may not happen, particularly if you’re viewing homes for sale via a private appointment.
If sellers are home, they will usually answer the door or, worst case, respond when the agent and buyers enter and announce themselves. Once in awhile, though, there’s a surprise seller somewhere in the house. (Maybe one time in a hundred? I have run into people who were in bed, in a shower, on a couch and simply not responding.) So be alert when viewing homes, be cautious, or it could be like that scene in “E.T.” where ET and the little girl see each other and scream their lungs out.
Pets are usually not present and loose, but again, sometimes there’s a misfire, so be on guard for dogs and cats (more likely the latter). If dogs are present and loose I usually will not show the home. I love dogs and have owned many, but they’re not all equally friendly.
Personalization: usually sellers will have decluttered and depersonalized their homes so that you and other home buyers can “see themselves” in that space. For some sellers, particularly seniors, it can be very difficult to remove those items until the moving van is in the driveway. So be prepared to see at least some homes with an inordinate amount of stuff, whether it’s family photos, collections, religious imagery or worship space, rooms not being used for their intended purpose, and so on. In these places, you’ll need to be able to see past what’s currently there as the personal items can be confusing. For instance, I have seen family rooms used as dining rooms, dining rooms used as hobby rooms, bedrooms used as prayer or exercise rooms, garages divided into several smaller rooms (with easily removable walls), etc.
Normally, homes are clean and pleasant to see. Sometimes with distressed properties, tenant occupied (unmotivated residents), homes with invalid residents, or other physical or emotional situations the home may be a wreck. Know that you will probably see a wide spectrum of care for the house and yard.
If you are purchasing your Silicon Valley home “all cash”, you will be in a stronger negotiating position. Most of the time, you will get a slight discount on the price and the escrow period should be smoother as there will be fewer hurdles with no financing contingency. Sellers always welcome cash offers for these reasons, and more.
Quick points:
It’s key to make sure that your funds are liquid. Stocks can decline in value and make a purchase of a home turn into a a crisis if that happens!
Speak to a tax professional before deciding how much to sell to have the cash on hand, as there are likely to be taxes due on the gain.
You’ll need to provide proof of funds when purchasing, whether it’s an all cash or a financed offer.
Want to close fast? The seller may want to, and with a cash offer that’s possible in most cases.
You may get a slight discount on the purchase price if your offer is all cash, no loan, but not a steep discount.
What do you need to know if writing an all cash real estate offer?
First, make sure you really do have your funds available or “liquid”. Sometimes buyers think that because they have stock worth a certain amount of money, funds in an overseas bank account or equity in another property they will have access to that cash almost immediately. It often doesn’t work that way.
Large sums of money coming from out of the United States may have to sit in a bank account for some time, possibly 30 days. Domestic wire transfers usually have little or no hold time. Is your money overseas? You may want to consider moving it well in advance of the close of escrow. Speak with your escrow officer and Realtor about the details. (more…)
When house hunting, look for what is missing as you scan the yard, the house’s exterior, and the interior.
If you see a driveway, you may notice that it has cracks. If you see an air conditioner condenser unit, you may spot some rust and register it as older. There are many items you come across when house hunting in Silicon Valley that you may find to be in good or poor condition.
A little tougher is to notice what’s not there at all.
Look for what is missing – they may be hidden costs to you later
A good Realtor who’s got plenty of experience will help you find the “hidden costs” in what’s missing in a property. Many such items may appear in a property inspection report, but wouldn’t it be nice to learn about them while viewing the property, and not while slogging through hundreds of pages?
Backing up, then, ideally you’ll get up to speed by learning, or having your real estate agent, point out to you the un-obvious. Here are a few things to consider:
If there are 3 steps or more, there should be a handrail
A water heater in a garage is required to be on a raised platform
If a bathroom or kitchen is remodeled, there ought to be outlets which are GFCI protected every few feet (telltale sign of remodeling without permits is the lack of outlets)
A chimney stack should have a spark arrestor and a rain cap
If the kitchen has a dishwasher, it ought to include an air gap
Bedroom windows are supposed to be large and low enough for ingress and egress in case of an emergency
A roof should have gutters and downspouts (some won’t)
Most homes will provide an attic for insulation and comfort, but some won’t have this type of construction
Attic access should be accessible, but sometimes is placed in a difficult location within a closet
Pools are required to have safety features to prevent drowning, but many do not
Many homes staged to sell have had all window coverings removed, and maybe also the window screens removed. This makes the living areas sunnier and more appealing, but it also means the new owner will spend hundreds or thousands of dollars to get curtains, blinds, shades, or other window coverings up for needed privacy and maybe screens, also
If there’s a lawn, you’ll expect automatic sprinklers
If it is a very cold, frosty morning, the roof ought to also have frost! If that is missing, the heat from the home is escaping and warming up the roof to melt it – and insulation needs to be added or improved.
When you begin to house hunt, you will find that every home has some flaws and any home purchase will involve compromises. Do work with a real estate sales person who can and will educate you every step of the way – there are nuances at every turn. (more…)
What are typical buyer closing costs in San Jose? How much extra money will it take, beyond the down payment, get into that new home in Silicon Valley? The cash needed at the closing table varies depending on many factors.
Today we will offer some general information on home buyer‘s closing costs in Silicon Valley. Different jurisdictions and situations may have additional closing fees.
Typical buyer closing costs – rough estimate
Just need a rule of thumb on the costs? The average closing costs percentage is between one half and one percent of the purchase price, but your actual figure could be substantially more or less, depending on many factors. It can go up substantially if the buyer pays for points or if they pay their own agent directly rather than negotiate that cost for the seller to pay.
Recurring versus non-recurring closing costs
Please note that some fees will be recurring (meaning they will be things you’ll pay again, like property taxes or HOA bills) and others non-recurring (which are one-time fees like title insurance). Where you are in the calendar year can impact fees like property taxes due at closing, too.
Some of the main factors that cause the buyer closing costs to rise or fall include:
loans and related required fees are generally a home buyer’s steepest fee after the down payment
home buyers who buy down the interest rate with points will see their cash needed to close escrow rise significantly
whether or not you pay for inspections
what city you’re buying in (San Jose has a minimum of one transfer tax, but for higher sale prices it’s 2 different conveyance taxes)
what type of home, or if it’s in an HOA or not
and many other smaller escrow related fees, such as if you both fund the loan and close on the same day
any pest work or other repairs that you pay for on the home prior to the completion of the sale (this is uncommon, but I’ve seen it happen)
when the next property tax bill is due (you won’t pay more or less, but it’s whether that amount is due at closing or a few months later)
There are online tools that can bring clarity to the typical buyer closing costs, but again only roughly. You will find a closing costs calculator for buyer at ORTC.com, the Old Republic Title Company’s site, and then click on the link for the online net sheets. Or use this link for their online net sheets.
Next we’ll go over what these various typical buyer closing costs can run.
Our fall weather here in Silicon Valley has settled into a seasonally wet pattern. Should selling your home in rainy weather be any different from other times of the year? Absolutely!
If you want to make the best impression on potential home buyers, your house, townhouse or condo needs to be inviting no matter what the weather may be doing. In the heat of summer, sellers are tempted to close up all the curtains to keep out the sun and heat – that’s a mistake because buyers typically don’t respond well to dark, cave like homes.
The cold, wet weather brings different challenges that also must be handled appropriately if you are to snag that best buyer!
Selling your home in rainy weather: quick tips
Here are a few tips to make your listing one that appeals to Silicon Valley home buyers who come out to see it despite unpleasant weather conditions.
Outdoor tips for wet weather showings
#1) Make sure that your downspouts are directing rain water away from your house or any structures (often 6′ or more is suggested); it is imperative that there be no “pooling” of water, especially near the home – this will cause buyers to worry about water in the crawl space and what it may be doing (foundation cracks, mold, etc.)
#2) Trim bushes and vegetation back from walkways and sidewalks. When it’s wet outside, these lovely bunches of greenery collect water and as visitors go past them, they can spill water onto the passers by. “Wet and cold” is not the experience you want buyers to have! Look at your sidewalks, driveway, and walkway and make sure that wet bushes and branches won’t be hitting anyone coming up to your front door.
#3) If the gutters leak, they’ll be noticed and will indicate that your property hasn’t been properly maintained, so repair or replace them. Often they just need cleaning out.
#4) Keep sidewalks, walkways, and patios clear of leaves as much as possible, as they can make a dangerously slippery surface if people walk on them.
#5) Visitors parking on the street may need to navigate past water in the gutters. If it’s easier for them to get onto the sidewalk strip, the better. Sometimes the sidewalk strip is full of tall bushes, such as juniper, and that can be challenging for auto passengers who don’t want to walk through a full gutter. Consider paths every few feet if doable. If the area isn’t planted, consider applying mulch to prevent mud.
#6) If you have a front porch, provide an absorbent doormat and a bench or seat so that visitors can wipe or remove their shoes (if that’s your desire) safely before going inside. Some kind of mat at every exterior door will help keep the whole home tidy.
#7) On dark, stormy days it’s nice to have welcoming front porch lights turned on. There are programmable switches set to timers that can do the job nicely, or light fixtures with sensers that switch the light on when it’s not bright out. Either one would create a more inviting impression.
Indoor tips for selling your home in rainy weather
Where do you look for the best MLS information when you’re house hunting online? Consumers have many choices, but they aren’t all equally comprehensive or updated.
Today we’ll touch on these relevant options:
Real estate agent and brokerage IDX feeds (and what is an IDX feed or syndication)?
Large portal MLS information (Realtor.com, Zillow, Redfin, and many others)
The MLS information from MLS Listings
Quick answer, for those who don’t want to read this whole article: the very best, most accurate and most often updated site for consumers wanting MLS information is via an automatic email, set up by your agent, from the public branch of our agent-supported Multiple Listing Service or MLS, which is MLSListings.com. For the full data, you must get your agent to share it with you – it won’t all be there if you just go to that website. I’ll explain below.
Syndication, Members Only listings, IDX, VOW, data sharing between MLS organizations
Syndication refers to the listings’ info being sent out to third parties for display on other sites. With syndication, as the listing agent updates the status to pending, sold, canceled, etc., the feed is supposed to automatically update. Sometimes there’s a lag or a glitch, though, so the info may not be as reliable (or up to date) for that reason.
Members Only listings in MLS Listings are not syndicated. They might be “Members Only: Do Not Show” (think of it like a Coming Soon) or they could be “Members Only: Show” (for whatever reason, the seller wants limited exposure – could be temporary, as the Days On Market do not accrue) (more…)
Buying and selling homes in Silicon Valley can be downright daunting. Perhaps you have heard this line: “the confused mind says no.” It’s true. When consumers feel overwhelmed, it tends to freeze them in their tracks.
One approach that some real estate salespeople use to gain control and get themselves hired as a listing agent or buyers’ agent is to oversimplify complex situations such that they feel manageable and doable. If that real estate agent makes things look less complex, it removes some worry and builds trust, and thus the consumer elects to hire that Realtor or other licensee.
The trouble is that too often, the overly easy answer is not really a true picture of the buying or selling situation. It is simply a convenient one which gets the agent what she or he wants – the job.
How do you know if what you’re hearing is a dangerous oversimplification? Often, it’s when all choices or decisions are boiled down to just one issue. For example, you might, as a home seller, hear that “The only thing that matters is….” followed by any number of single choices: price, marketing, negotiation ability, staging.
I see home owners fall for this too often. The thing is this – if that agent convinces you that only one of these items matter, than all of the rest can be discounted, played down, and ignored.
Helping nice folks to buy and sell homes in Silicon Valley
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES
Christie's International Real Estate Sereno, Los Gatos, CA 95030 408 204-7673 Mary@PopeHandy.com License# 01153805
Clair Handy, Realtor
GREEN
Christie's International Real Estate Sereno 214 Los Gatos-Saratoga Rd Los Gatos, CA 95030 ClairHandy@sereno.com License# 02153633
Mary & Clair sell homes throughout Silicon Valley: Santa Clara County, San Mateo County, and Santa Cruz County. with a special focus on: San Jose, Los Gatos, Saratoga, Campbell, Almaden Valley, Cambrian Park.
The real estate search
Use this link to browse properties which are for sale, under contract (pending) or sold. Want to view only homes which are available now?
Mary Pope-Handy, Realtor ABR, AHWD, CIPS, CRS, SRES Christie's International Real Estate Sereno DRE License #01153805 408-204-7673 mary@popehandy.com “Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Clair Handy, Realtor, GREEN Christie's International Real Estate Sereno DRE License #02153633 408-721-6160 clairhandy@sereno.com “Helping nice folks to buy and sell homes in Silicon Valley”
This is the Valley of Heart's Delight blog , covering Silicon Valley real estate - Santa Clara County, San Jose, Los Gatos, Cupertino, and nearby communities in the South Bay Area and lower Peninsula. Find info on neighborhoods, disclosure issues, buyer and seller tips, and housing market conditions in the west valley and most of the county.Please also see my other websites and real estate market statistics site, which are listed in the sidebar, above.
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Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES Sereno DRE License #01153805 408-204-7673 mary@popehandy.com
“Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Contingencies have not been used as much in recent years due to our overheated Silicon Valley real estate market, but with some cooling in the market, we are beginning to see them make a return, so this is a good time to provide a refresher on the subject.
What are typical buyer closing costs in San Jose? How much extra money will it take, beyond the down payment, get into that new home in Silicon Valley? The cash needed at the closing table varies depending on many factors.
Where do you look for the best MLS information when you’re 
