Expired, Canceled, Withdrawn Listings: What Happens If You Take Your Home off the Market?

Expired, canceled, and withdrawn listings are all frustrating situations for both home sellers and the Realtors they worked with.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What is the difference between expired, canceled and withdrawn listings?

Let us begin by discussing the difference between canceled, expired, and withdrawn listings and how each impacts your vulnerability to being swamped with messages from real estate agents.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 A withdrawn listing means that the property is still listed for sale with a real estate agent or broker but is no longer listed on the multiple listing service (MLS).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Valley home’s listing becomes either canceled or expired, real estate sales people may contact you, but if it is merely withdrawn, they are not supposed to reach out to you because you still have a valid listing in place.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…)

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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Doesn’t the listing agent have to show it to me?

Telephone Photo with dialogue between a caller and listing agent - Doesn't the listing agent have to show it to meIf a buyer wants to view a property, does the listing agent have to show it to him or her outside of regular open houses? The answer might surprise you!  Here’s a quick overview:

  • The listing agent and seller decide about showings that the listing agent is expected to do. Does the listing agent have to show it privately, or during open houses, or only on one weekend before offers are reviewed?
  • The listing agent will make showings possible for buyer’s agents with instructions on scheduling in the comments that members of the MLS can read.
  • In many cases, the real estate licensee working with the home seller will hold the property open for the public on the weekend and sometimes mid-week as well. It may or may not be the listing agent holding it open.
    • For safety reasons, many listing agents will not have private showings with buyers whom they don’t know and who aren’t clients of theirs. Realtors are harmed every year in the line of duty.
    • For agency reasons, a listing agent who plans to only represent the seller may not want to have an appointment with a buyer who plans to write the offer with someone else.
    • There are many other reasons why the listing agent will not personally show the home for sale outside of open house times, but may be able to arrange for the buyers to see it with another agent.

When does the listing agent have to show it?

The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate as to whether or not the seller’s agent is obligated to show it privately.

It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. To make an absurd point, no one would say “doesn’t the listing agent have to show it to me at 10 p.m.?” Without any thought, we know that’s unreasonable.
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What Does It Cost to Buy a 4 Bedroom, 2 Bath Home in Silicon Valley with Good Schools?

Often I have clients who are interested in purchasing a 4 bedroom, 2 bath home in a good school district in Silicon Valley, particularly in the South Bay and West Valley areas. But what does it cost to buy that “average home”? Tonight I did a study on the MLS of homes that have sold and closed escrow in the last 4 months with these characteristics:

  • single family home (house)
  • 4 bedrooms
  • 2 full bathrooms
  • 1800 to 2200 square feet of living space
  • 6000 to 10,000 sf lot

Disclaimers aside, here are the numbers for select West Valley Communities in the West/South Bay area with good schools.

Cost to Buy 4 Bed 2 Bath Home in Popular Silicon Valley Communities

The first number is the number of sales during that time (more sales = more reliable averages). This one is not in the older charts, but with inventory as low as it has been lately this makes a huge difference. The second number is the average sales price per square foot, the third number is the average sales price, and the last number is the average days on market:

2022-11-3 Average Cost to Buy West Valley Homes 120D 4b-2b West Valley

 

And now a look back to late winter, early spring of 2017…

 

 

What’s changed? A lot! The order has shifted some, showing where demand has increased or decreased. Most noticeably, the prices are mostly up significantly, which is most noticeable in the price per square foot. Cambrian has traveled a good deal up the ladder. Palo Alto and Los Altos were displaced by the sole Saratoga sale, and Blossom Valley of San Jose remains in it’s regular position at the bottom.

The home prices tend to run with school rankings. Previously this was by district API scores.  You can check the 2013, three year average, API scores in Santa Clara County for both the districts and the individual schools online here, however that system is no longer used. So how to people judge? Most buyers use sites like GreatSchools.org when looking for a home with good schools which ranks schools on a scale of 1-10 in a few categories.            (more…)

Can a real estate agent help you to buy a foreclosure?

San Francisco Victorian Homes - Can a real estate agent help you to buy a foreclosure?Can a real estate professional help you to buy a foreclosure? There are some nuances to this answer, but in short, it depends. We haven’t had many foreclosures in recent years, but once in awhile we find them popping up here and there.

There are several stages in the foreclosure related sales in California.  Often, homes somewhere in this quagmire are listed on our Silicon Valley area MLS or multiple listing service.  If a property is listed in the MLS, then yes, we Realtors can help home buyers with a distressed sale purchase.

The stages of foreclosure

  1. Pre-foreclosure (where payments have been missed and a Notice of Default or NOD has been filed – sometimes these homes are on the market and included in the MLS.

    If they’re in the MLS, I can help.

    If these properties are for sale, often these are short sales (but short sales are not always in pre-foreclosure – they may not have missed any payments).

  2. Trustee’s sale, or actual foreclosure on the courthouse steps. This does not involve the MLS or Realtors at all. There is literally no role for the real estate agent here unless you, as the buyer, want to pay the commission (most buyers don’t in this circumstance).

    There are some big caveats and warnings!

    First,  often what’s owed against the home is more than it’s worth and the only way to purchase a home here is to pay off all the debts (so it may not be much of a deal!). Some buyers who “bought” a home actually have only purchased the second deed of trust, not the first, and are left empty handed.

    Second, if you buy here, you get NO inspection contingency and must pay cash for the house.  End of story – no backing out.  Worse, you cannot inspect it ahead of time!

    Third, you are likely to be bidding against flippers and builders who can more affordably rehab the home than you or I could do.

    There are a lot of risks, so buyer beware!

  3. Bank owned or REO. REO means Real Estate Owned (by the bank).

    These are usually listed on the MLS and if so, I can help you with it.  Sometimes banks hold onto them between the trustee’s sale and prior to listing them with a broker.  Often this is only for a month or two but sometimes it’s longer.  If it’s not on the MLS, it’s very very hard, or maybe impossible, to buy it.

Want to buy a foreclosure? Want professional help to do so?

While it’s not hard to locate homes where owners have missed some payments, it should not be assumed that these houses are either for sale or that the owners have any intention of selling them.  In my opinion, it would be harassment if consumers showed up on their doorsteps trying to purchase a house where a payment has been missed.

Most, maybe all, of the residents there would be offended.  They may be trying to get a loan modification (it does happen, I’ve known people to work through it that way) or have family & friends helping them to get back on track. If it is not listed in the MLS (which you can find at MLSListings.com – the public portal of our agent multiple listing service), the odds are overwhelmingly against it being available to you.

The short answer to the question “Can a real estate agent help you to buy a foreclosure?” is that the answer is generally NO if it’s an auction on the courthouse steps.

Related reading:

What’s the difference between short sales and foreclosures? What is an auction?

See also these much older articles from the downturn:

So you think you want to buy a Silicon Valley short sale?

Short sales sell but often don’t close: why?

Browse Short Sale Listings & Bank Owned Properties for Sale in Los Gatos

Short sale and REO articles on the Live in Los Gatos blog (old articles)

 

Did you take take care of needed repairs when you bought you home?

Photo of drywood termite pellets - Home in need of termite repairsDid you do the repairs outlined when you bought your home?

Recently I showed a home where the owners had been there 7 or 8 years but never did any of the suggested repairs from their pre-sale inspections when they purchased the home “As Is“. The As Is part means that no repairs were provided by the sellers, with the idea that buyers would do whatever was needed later.  Desperate to get in when prices were appreciating fast, it seemed that most home buyers said “we’ll take care of it after we own it“.

But many of them forgot.

Today, with the whitest hot market I’ve ever seen in my career, most sellers fix the major items because they understand that it will net them a higher sale price. They fix the foundation, electrical, plumbing, waste lines, roof leaks, pest items, safety issues, and do whatever other repairs would make a buyer pause.

Some, though, don’t do any repairs at all – none! Often they are the same sellers who won’t stage their homes, or for whom scheduling a showing is a big effort, and maybe the disclosures aren’t so thoughtfully done. (In recent weeks I saw a disclosure package in which the sellers wrote on every page, “AS IS SALE” and refused to answer each question.) It’s a giant red flag that these may be difficult sellers.

If you want to maximize your profits, don’t let that seller be you. As Is certainly is the norm, but it’s As Disclosed. Wouldn’t buyers pay more if they weren’t worried about needing to do a lot of expensive and time consuming repairs? You bet. Confident buyers pay more. Let that be your mantra, home sellers.

Pull out your old file, find your inspection reports and review them, especially if you are preparing to sell your home

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“Make offer subject to inspection” – what is that about?

Make offer subject to inspection - Sherlock Holmes, a house, and a contractOnce in awhile, properties listed for sale on the MLS instruct real estate professionals that the home cannot be seen until and unless there’s an accepted purchase offer on it.  The way it reads in the multiple listing is this: “make offer subject to inspection“.

What does “make offer subject to inspection” mean?

This clause means that first a buyer must write an offer and get it accepted by the seller, and then – and only then – can the buyer check out the property in person. The “subject to” part means that the buyer will have a contingency for approving the home’s condition. If it is terrible or unacceptable inside, the buyer will have the right to back out. (Those terms, such as the number of days for inspection and investigation, will be spelled out in the contract.)

The idea that an contract would be written without seeing the house, townhouse, condo, duplex etc. or that someone should plunk down hundreds of thousands of dollars on a home “sight unseen” is absolutely shocking to most Silicon Valley home buyers. But “make offer subject to inspection” is the way that apartment buildings and many investment properties (duplexes, triplexes and fourplexes) are sold.

Think of it this way: if one is buying a tenant occupied property that is being sold as investment property, whether it’s 1 unit or 2o, the main thing is not so much how it looks physically, but how it looks on the books.  How’s the cash flow? How good is the return on investment? What is the upside potential with renovations? (more…)

Silicon Valley Homes for Sale Near Golf Courses in the Foothill Areas

With our 300 sunny days per year in Silicon Valley (at least most years!), golf is a sport enjoyed year round here in the San Jose area.  Living near a golf course, or having a golf course view, is highly desirable as it provides scenic open space as well as convenience for avid golfers.

Silicon Valley Golf Homes, Silicon Valley Golf Properties

There are beautiful courses throughout the South Bay Area and it’s possible to find small condos with views of them at fairly affordable prices (Sunnyvale’s Sunken Gardens area is one of them).  Today, though, I want to provide a list of homes for sale near golf courses in the foothill areas of Silicon Valley.  Many of these will also be luxury homes. So the MLS list of these houses on the market which you can browse includes these areas:

San Jose areas including Evergreen & Silver Creek, Santa Teresa, Blossom Valley and Almaden; Los Gatos, Monte Sereno, Saratoga, Cupertino, and Los Altos.

There are golf courses to be found in other parts of Santa Clara County too (Mountain View, Sunnyvale, Santa Clara and more) – let me know if you are interested in these parts and I can send you a link for searching them for similar residential real estate.

Here are a available or recently sold homes near to golf clubs:

 

 

 

 

5 things your Silicon Valley buyer’s agent can do to help improve the odds that your offer will be accepted

5 things your buyers agent can doHome buyers in Silicon Valley are getting frustrated, discouraged and disheartened as they write offer after offer, only to lose out in multiple bid situations. It’s not just the poor small down payment home buyer either – this is happening to those with 20% down and more too.

What can be done to improve the odds of success?

Usually losing out is a simple case of the best price and terms winning out.  (I wrote a series of articles on how to compete in multiple offers that you can find here.)  At times, though, there’s a bit more nuance, especially if there are two or more bids which are “neck and neck” or nearly tied.  Sometimes the buyer’s agent either does or doesn’t do certain things which can impact how your real estate purchase offer is viewed by the listing agent and seller(s).  Here are 5 important things that the buyer’s Realtor or sales person can do which will help the odds of success:

    1. The agent should read the MLS printout carefully to see if there are any instructions regarding offers.  This one may seem obvious. but too many buyer’s agents just draft the offer and send it in, ignoring information that will probably be useful (such as offer deadline, preferred form – CAR or PRDS contracts, availability of disclosures, the request to call before writing the contract etc.).  Ignoring clear instructions will usually result in creating bad feelings between the parties or their agents, and lessen the odds of success.
    2. The buyer’s agent should call or email the listing agent before writing the offer (and after reading the MLS!).  Sometimes there are requirements or just preferences that won’t be known unless contact is made.  Additionally, though, the listing agent will simply want to know about the level of interest and not have any surprises – it’s a courtesy call.  If the relationship between real estate agents is improved, so are the odds of success.
    3. The agent should ask if it is possible to present the offer in person… and be willing to do it, of course.  Many seller’s agents won’t want a live presentation (most would email), however the fact that your agent is willing to spend the time and make the effort to present in person usually speaks volumes about his or her professionalism. It’s also a hint that the agent is a cut above most.  In my real estate practice, several times I beat out other offers by asking if I could meet with the listing agent and sellers to discuss my clients’ offer, and then doing it.   (With my multiple offer situation yesterday, only 3 agents requested to present to me live.  One of them had the winning contract.  Of course, the rest of the package was also super strong – but this one step is a clue to the whole offer strength and commitment.)
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Is it too early in the season to be house hunting in Silicon Valley?

Photo of ranch style house with the question - Is it too early to begin house huntingIt’s a January that feels like March, if a dry one.  The weather is clear, mild, and temps are sixty to seventy degrees, the skies are blue and trees are beginning to blossom – a great environment for house hunting. Is it too early in the season to begin your search for the right home in Silicon Valley?

Each prospective home owner’s situation is different, but for many people, January is a great time to jump in with house hunting, before the Super Bowl, Valentine’s Day or some other point a little later in the calendar year.

Weather, Inventory, Interest Rates and Silicon Valley house hunting

First, to note the obvious: there is no weather related reason to wait. (Sellers: pay attention!)

Second, let’s discuss selection. Inventory is horribly low (see the inventory data table in my 2020 predictions article). Most people expect the number of available listings to be higher in Spring.  Seasoned Realtors know that while this often happens, it doesn’t always, so we cannot count on it. (Check the Santa Clara County monthly real estate statistics here.)

How bad is it?  I’m on the MLS right now.  For single family homes (houses and duet homes) in Santa Clara County, there are 411 for sale right this moment which are not sale pending or under contract. This is for the whole county, where there are 1.8 million people residing.

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