When a parent, spouse or loved one dies – what do you need to know or do about the house?

Death and Real Estate - Dealing with a Property after A Loved One DiesWhen a parent, spouse or loved one dies and he or she owned a home, there’s a lot for the survivors to do in addition to the very real and painful process of mourning. I have been through this with my own parents (and their house in Saratoga), a great aunt in Willow Glen, and many clients in San Jose, Los Gatos, Palo Alto, and elsewhere in Silicon Valley.

Quick summary of what to do regarding the home first and soon when a loved one dies:

  1. Engage the help of of an attorney and tax professional within the first 30 days or so. Sometimes there are deadlines or goal dates that will help the beneficiaries, and if people take too long to connect with these professionals, some opportunities may close.
  2. Some attorneys are also tax professionals, but most likely these will be different people.
  3. A professional valuation of the home will be needed, usually done by a licensed appraiser, but sometimes a real estate professional can do a market analysis that is acceptable. The home does not have to be empty or cleaned out to have this done.
  4. If you need the names of good tax and legal professionals, feel free to reach out to your real estate agent (or to me, if you are local). Most of us have worked with trust situations and can provide names. Or ask friends and family who’ve recently gone through the same situation and were happy with the people that they hired.
  5. You will need several copies of the certified death certificate. Discuss how many with your tax and legal professional. If you sell or transfer the home, the title company will need it and it will be recorded with the county.

Death, dying, & real estate: where to begin when a loved one dies?

In terms of settling the estate, it is wise to first speak with an attorney and tax professional about the property to find out what is required and advisable.

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Selling your home in Spring? Find and hire your agent over the holidays!

Hire your agent over the holidays and hit the ground running in January - business man in front of fireplace fireIt’s mid-November, and it may not be intuitive, but if you want to sell your home next Spring, I’d encourage you to find and hire your agent over the holidays.

Why hire your agent over the holidays?

Thanksgiving is late next week, and you may want to shelve the whole idea of anything related to home selling until sometime after January first, or maybe after Super Bowl. Many home owners determine that in the new year they’ll start decluttering, fixing up the home and yard, and stat thinking about contacting a real estate agent or two (or three).

But that’s backwards from the ideal!

If you can take a few hours now to select and hire (yes, sign the listing contract) your real estate professional, that person can help you make key decisions that will impact your return on investment.

It does not cost more to bring her or him into the process early, and it may save you some money and keep you from making improvements that are counter productive to your goals.

Not only that, but Realtors often have trusted vendors for yardwork, painting, hauling, and even for help with sorting out what stays, what goes, and what gets donated or tossed.  Hire your agent over the holidays, get in touch with those vendors in December, and schedule the help you need for that first week in January and get the job done right the first time.

 

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Expired, Canceled, Withdrawn Listings: What Happens If You Take Your Home off the Market?

Expired, canceled, and withdrawn listings are all frustrating situations for both home sellers and the Realtors they worked with. After considerable effort, and likely also significant cost. the property failed to sell (or it went pending, fell through, but did not re-sell). What happens next?

3 Minute Video Overview

 

What is the difference between expired, canceled and withdrawn listings?

Let us begin by discussing the difference between canceled, expired, and withdrawn listings and how each impacts your vulnerability to being swamped with messages from real estate agents.

On the multiple listing service, these are very distinct statuses.

MLS status for listings

  1. A withdrawn listing means that the property is still listed for sale with a real estate agent or broker but is no longer listed on the multiple listing service (MLS).  It’s still a valid listing and other agents should not approach you about working with them since you are still in a contract to sell your home with your current agent.
  2. An expired listing means that the contract for your listing has come to an end and the listing is no longer in place.  Other agents may approach you since there is no valid listing in place.
  3. A canceled listing is one in which the seller and agent or broker agree to terminate the listing. Since the listing has ended, other agents are free to contact you.

In a nutshell, if your Silicon Valley home’s listing becomes either canceled or expired, real estate sales people may contact you, but if it is merely withdrawn, they are not supposed to reach out to you because you still have a valid listing in place. (more…)

The percentage of all cash sales in Santa Clara County

The percentage of all cash sales (all cash, no loans) rose in July, but the actual number of sales, shown immediately below, shrank a little. I pulled this data from the MLS today and it’s reflective of whatever the listing agent entered into the fields for financing.

Number of Cash Sales of Single Family Homes in Santa Clara County

 

Percentage of All cash sales, month by month, in Santa Clara County (single family homes)

Next, the actual percentage of all cash sales in the county for houses and duet homes.

Percentage of All Cash Sales in Santa Clara County for Jan 2013 - July 2023

 

The average for the 11 Julys shown is 13.9%, so July 2023 with 15.7% is interesting to see. Interest rates have skyrocketed over the last 14 months, forcing home prices down in the 2nd half of 2022. It’s a little surprising that we did not see a surge of cash buyers then, but their numbers stayed in the typical range from what I’m seeing.

Now, in mid 2023, we have seen both interest rates and home prices rising – at least for the first 6 months of the year – in most of the valley.

Cash buyers are usually investors, but not always. Sometimes they are homeowners who sold their long held family home and are now downsizing and buying with the proceeds of the larger home that they just sold. We don’t get that piece of data from the MLS, but anecdotally, that’s what I’m seeing with the cash offers I’m seeing and hearing about.

 

What does it mean that cash buyers are an increasing percentage of the closed sales?

  • Rising interest rates not only don’t harm the all cash, no loans buyers, it actually helps them as it weakens their competition
  • These buyers may be feeling more confident with the softened market and easier buying conditions generally
  • My thinking when we saw interest rates rising is that it would help the mortgage free buyer more than anyone else – that seems to be the case.

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Hot Times, Home Selling in the Summer!

Selling in SummerSelling your Silicon Valley home this summer? Don’t make the two most common mistakes which cost sellers money when marketing their home in the hottest months of the year!

Common Home Selling Mistakes in Summer

The “Closed Up” House

Many people try to beat the heat by closing up the house, turning off all the lights, and shutting blinds and curtains.  I see this all the time in summer, particularly if the San Jose area is enduring a horrendous heat wave. While it’s good practice for homeowners, it can cost home sellers!

Walking into a darkened house, condo or townhouse is a huge turn-off for home buyers. It’s depressing, unflattering, can make a space feel smaller and less inviting. Yes, we can turn on lights and open blinds, but the initial impression is terrible, and that feeling is often the one that sticks with buyers!

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Check the months of inventory to see if it’s a good time to sell your home!

Months of Inventory explained with an hourglassIs it a good time to sell a home in Silicon Valley? One of the best ways to get a pulse on the real estate market with an eye to selling or buying is with the months of inventory (MOI), also known as the absorption rate. This is the months of supply of housing for sale.

The months of inventory tells us how fast the current inventory of properties will be sold off if sales were to continue at the same rate with no new inventory were to come on the market.

The easiest analogy is with a bathtub full of water. If we added no more water to the tub, and the drain were opened, how much time would it take for the water to be depleted if it continued to empty at the same rate? That’s the question being answered with the absorption rate of inventory.

Or, simpler still, if you have an hourglass that you turn over, how long does it take for the sand to empty from the top (since you cannot add more sand to that end)?

How to calculate the months of inventory or MOI

The way to calculate the months of inventory is simple:  find the current available inventory of homes for sale (not under contract or sale pending), then find the number of homes with that exact criteria which have closed escrow in the last 30 days.  Divide the first by the second and you get the months of inventory. Or, I can just use the stats program on the MLS to generate that number, as I did today.

Earlier I pulled this data from MLSListings.com, our local MLS association (of which I am a member) and I ran the numbers for single family homes (houses and duet homes) in Cupertino, Los Altos, Los Gatos, Monte Sereno, Mountain View, Palo Alto, San Jose (all areas combined), Santa Clara, Saratoga, Sunnyvale. Separately, I also ran this same query for the City of San Jose by district.

The months of inventory by city or town in Santa Clara County

A balanced market for our area is 2-3 months of inventory (for most of the US it’s 4-6 months). Two months or less is a seller’s market, and one month or less is a very hot seller’s market.

Here’s a look at the months of inventory by city or town in SCC in April 2023 for single family homes.  As you can see, the vast majority of the county is a strong seller’s market, with the only exception being Los Altos Hills.

 

Santa Clara County months of inventory by city in Santa Clara County - single family homes for April 2023

 

Which are the hottest markets?  They’re the ones with the smallest months of inventory -Sunnyvale, Santa Clara, Cupertino, Milpitas and many more are well under the 2 month market. A few are a tad higher and in the “balanced market” area, and only one is in a deep buyer’s market.

The months of inventory by area within the City of San Jose

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Should You Move Out Before You Sell?

Should You Move Out or Vacate Before You Sell?A decade ago, it was the norm for Silicon Valley homeowners to occupy the home they were selling – today a majority of homes are being sold unoccupied or vacant. Why is that? And should you move out before you sell?

A few years ago, around the mid- to late-2010s, we began to see an increasing number of vacant and professionally staged properties for sale. Last year, most sellers simply felt safer moving out before selling due to the pandemic. Today that continues to be the case.

Over time, the reasons for homeowners to move out before marketing a primary residence have increased. While sellers can certainly still occupy a home on the market and sell it successfully, it’s not our recommendation for most people and here’s why.

Seller Stress

First things first, if you are able to move out before you sell it can reduce a lot of stress. And this has almost always been the case.

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Sell Your Home in 2021

Sell your home in 2021 - it is a great time to sellAre you thinking that you might want to sell your home in 2021? If so, you may be wondering how Covid-19 will impact the marketing and sale of your property. It’s stressful to sell in normal times, but during a pandemic it’s a whole new level of concern.

 

How hard will it be to sell your home in 2021?

 

The short answer is that it’s a lot easier to sell a home for top dollar right now because there’s a dire shortage of inventory. I know, we’ve been saying that for years, but it has only gotten worse since 2013 when it started feeling scant. The odds are that it will stay that way for at least the next six months or so, and perhaps longer. The months of inventory is a rock solid statistic that displays how quickly the inventory of available homes is absorbed. (If no new inventory were to come on the market, but sales continued at the same pace, how long would it take for the available inventory to all be bought? That’s the question being answered.)

The flip side of this, of course, is that if you are planning to sell one home and buy another, it’s no slam dunk since there are many multiple offers. But for the selling half, it’s amazing.

Here are the numbers from 2014 to now:

 

Months of Inventory - Santa Clara County Single Family Homes

 

 

I did spot check pre-2014. Our numbers go back to 2003 on the MLS. Except for November 2017, no other Novembers were below 1 month. November 2007 was the worst at 9.8 months of inventory.

In other words, it doesn’t get any better than this in terms of the odds of selling.

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Selling an occupied home during quarantine

celebratory image with words "some good news!"UPDATE ON APRIL 29: We just learned that the Shelter in Place order for Santa Clara County and San Mateo County will now permit showings of occupied homes as long as the residents are not present during the showing.

This new permission will kick in beginning on May 4th.

 

 

 

It is a challenging task for those selling an occupied home right now. Only vacant properties may be shown to buyers in person. If you are living in the home you want to sell,  what can you do to improve your odds of getting the property sold and closed? Here are some tips.

# 1 – Selling an occupied home? Help it to be knowable & virtually shown!

First, buyers cannot purchase it, as in close escrow, if they and their agent cannot see it. Or at least they shouldn’t since many things cannot be known until you go there in person, such as whether or not there are any odors, if the floors are level, if the rooms have enough natural light, and so on. The buyer’s agent has a legal obligation to perform a reasonably diligent visual inspection, which is pretty close to impossible if he or she cannot be on the property.

The best thing you could do would be to move out to sell, but for many that isn’t practical. The second best thing is to provide photos, video, and a floor plan so that buyers have a much clearer sense of the home, yard, view of the street, neighbors, etc.

 

Selling an occupied home - photo of a street view - show the street view, side yards, and areas often skipped - photo of street view in The Villages

 

Photos to help get your home under contract

Whether you take the photos or a professional photographer does, tidy the home as if it were going to be shown in person. Make the beds. Windows need to be clean. Virtually everything should be off of the kitchen and bathroom counters. The toilet lids should be closed. The fireplace should be neat and emptied of ashes. Floors ought to be clear of toys, shoes, and so on.  Garden hoses and outdoor items need to be away. Cars should not be seen. (You can find a really good list of preparing your home for real estate photos here.)

Photograph all of the rooms in the home, and include the hallways, laundry area, any pantry, etc. The exterior of the home and the yard(s) are to be included too. De-clutter and organize them just as  you would the more interesting parts of the home or yard.  Please make sure to snap these non-intuitive elements: (more…)

Should we lower the list price? If so, how much?

Image of a living room with the words: Home selling Is it time to lower the list price?Although the Silicon Valley real estate market remains hot, and generally is a strong seller’s market, not every home is selling in 2-3 weeks.  At some point, sellers may wonder if they should lower the list price.

While being overpriced is not the only reason why a property won’t sell, that is the case 90% of the time or more. The first question is whether or not there are enough showings to generate a sale. If not, then the problem is significant.  If there are showings, what is the feedback? Why are buyers not writing an offer?

How soon should you lower the list price?

Most of the time, if the property is unsold after 21 – 30 days, it’s time to reevaluate the marketing strategy.  Is the home easy to see? (If showings are too restrictive, they won’t happen.) Is the house or condo presentable – clean, well lit, tidy, without bad smells and so on? Are the photos good? If all of this is in order, it’s time to consider the finances.

The biggest piece of the marketing effort, of course, is price.  (Please also see Why didn’t my San Jose home sell? for info on other remedies to real estate not getting pending.)  if the home isn’t selling, it may be time to lower the list price or asking price.

Usually, the main reason why a home doesn’t sell is that buyers think that it is overpriced. Sometimes you, the seller, can compensate by improving the condition or some other relevant factor, but often, the solution will be to adjust or lower the price.

How much should you lower the list price?

More qualified traffic increases the odds of selling a homeIt really depends on what the market reaction has been – no traffic, light traffic, or heavy traffic? The colder it is, the more likely you’ll need to take stronger measures.

Recently I visited an open house in which there’d been less than a 1% price reduction after 30 days on the market.   That very minimal kind of repricing tells a buyer “I’m not budging”, which the buyer may read as “My price is high and I’m unreasonable; move along, this is not the house you seek”.

It’s all about the traffic

First, how much activity is your property getting? How many showings per week?

If you are getting at least 3-5 showings per week, but no offers, you  are probably close on price. Perhaps a smaller reduction, combined with some other adjustment (restrictive hours loosened up, scary pets removed, alarm disarmed) may do the trick in getting you more traffic to create a viable offer.

If you are getting NO showings, or close to no showings, you may well be way, way high on your price or have other major issues which need to be corrected.  My general advice, below, may not apply in that case as you may need something more to get the qualified traffic in through the door.  The more qualified traffic you get, the better your odds are of selling. An atractive price is the bait that can attract those buyers.

Here are two old rules of thumb, which I think pretty much still work today:

  • for every week it’s been on the open market, lower it $10,000 (so a reduction in 3 weeks would be $30,000 or a reduction in 5 weeks would be $50,000)
  • alternatively, for every week it’s been for sale and active on the MLS, lower it 1% of the sale price (hence at 3 weeks, a 3% reduction would be appropriate and at 5 weeks a 5% reduction would be indicated)

Every situation is, of course, unique, so it’s important to look at the big picture. If buyers and agents are staying away because the home smells of pets or cigarette smoke, or if there are people constantly home during showings (you should all vacate), or if you demand that the listing agent be present for all showings, any of these things can drive away qualified traffic. But if the marketing is good, the home is clean and reasonably accessible, and all the other basics are correct, it probably is price. Sit down and talk with  your Realtor to get good guidance.  If those who have shown the home have provided feedback, take it to heart – whatever that input is.