Your home’s been on the market awhile, the listing is about to expire, and suddenly agents are previewing it: why?

About to expire listingUnfortunately, there’s an ugly underside to selling a home that has been on the market awhile.  Here’s how it goes. Your home’s been on the market a few months, the listing contract is about to expire, and suddenly (after several very quiet weeks) other agents are previewing it.  Do they have interested buyers?  Did inventory suddenly drop?  Did they suddenly realize what they were missing?

Probably not.

Sad to say, there are real estate agents here in Silicon Valley and throughout the country who wait and watch for old listings to expire so that they can then prospect them.  There’s nothing wrong with approaching a home seller whose property did not sell provided that the old listing contract is over (the listing is expired).  But what I’m talking about is just shy of that.  These real estate sales people are hoping that by showing an interest, they will be “top of mind” when the weary home seller searches for a new Realtor or other sales person. By scheduling a preview appointment, at the very least they can drop a business card into the seller’s hands. And if they are very lucky, the seller will be home, and they can have a conversation with that home seller. (What they are thinking is this: “I can get in front of a potential client!)

This is very frustrating for home owners who are trying to sell their house, condo or townhouse.  Naturally they tidy up before the agent comes by to preview.  In most cases they will leave the house for an hour or so (that is best).  But in any event, in many cases those preview appointments are not for actual buyers at all – but just a way to drop a business card at the house, and perhaps to meet you, the market weary seller.

What can you do to avoid this?

Sometimes my clients will tell me that they want a 4 month listing.  No problem, but we will make it for 6 with an easy exit listing clause.  That way, if for some reason the home doesn’t sell within four months, they can then remove it from the market and not deal with the 9th hour agents who provide a mirage of interest.

There are other strategies to use, too, to keep from being barraged by real estate sales people who don’t have an actual buyer.  But perhaps the best one is to have a listing that can be cancelled and a slightly longer market time to prevent previews from agents who are far more interested in listing your property than getting it sold now, under the current listing agreement.

 

 

 

Santa Clara County’s “Jumbo Conforming” Rate Soon To Be Lowered

News flash – in case you didn’t know, the current “jumbo conforming” loan rate in Santa Clara County of $729,750 is about to be repositioned (to speak euphemistically) to $625,500. This is all over October 1st, but many banks will stop lending at these rates long before that, perhaps prior to September 1st.

What does that mean to YOU, a San Jose or Silicon Valley home buyer, seller, investor or owner?

For many properties, there will be no change.  But if your property’s value is such that a 20% down purchase (a normal situation) has the loan between $625,500 and $729,750,there’s about to be a painful change.  How painful? About one half of one percent.

Right now a $700,000 loan is a jumbo conforming (good rate: 4.5%).  Under the new limits, it’s a jumbo (good rate: 5%).  The hike means, concretely, $210 per month for that $700,000 loan amount, or about $75,000 over the life of the loan.  That’s some serious dough.

This change probably WON’T impact homes priced lower than $625,000 or greater than $912,187.  But we may be seeing some pressure and price compression in the zone between.  It’s also likely that there will be some pressure to sell but also to buy before this change happens.

When money becomes more expensive, prices usually fall.  But this is an odd situation since not all price points are impacted.  For buyers with large down payments or who purchase their house “all cash”, it’s no difference to them – but it might be a huge difference to sellers.

My best guess: investors will make good use of this opportunity at a vulnerable point in the market.