What has waiting cost you?

Row of houses with arrow indication price appreciation - What has waiting cost you? Indecision can be expensive If you’ve been on the fence about buying a home, have you considered what has waiting cost you? Indecision can be financially and emotionally crippling. 

Both home buyers and home sellers can experience delays in buying and selling, and also experience losses in what they could accomplish in a real estate transaction because of slowdowns in execution. Since our Silicon Valley real estate market has more periods of home prices rising than prices falling, the majority of damage from delays appear to fall on home buyers.

Sellers may be locked in with low rates and may now be upset that they did make their move up or move down purchase when mortgage rates were better. Buyers may feel like their opportunity window has passed them by.

  • If you’ve been thinking of buying a home for 5 years or more, that wait has cost you lower home prices. There is a chance that you may be priced out of the market.
  • For those who bought a home before rates bottomed out during the worst of the COVID pandemic (rock bottom was January 2021), there was a chance of refinancing and getting a loan at under 3%.  Today rates are closer to 7%. Buyers now are watching rates for a chance to refinance and get a better deal and lower house payment. Rates are hugely important when gauging housing affordability.
  • A fair chunk of buyers are hoping that prices will decline.  Demand far outstrips supply, though, so for now that appears to be wishful thinking.
  • There are some times when home prices go up faster than you can save. Right now appears to be one of those periods. If you decide to “wait and save”, the gap will increase between you and the home you want to buy, sadly.

Home buyers, what has waiting cost you?

Since 2012 our housing market has experienced prolonged periods of rising home prices with only a few corrections here and there. For would be owners, those few corrections were opportunity moments. Our last one was the second half of 2022. When home values are soft, few buyers jump in, though, waiting to get more for their money by holding off.

Trying to time the market seldom works, though. Blink and the market shifts back into the other direction! There’s almost never a perfect time and some objection to buying.

As am example, here are the average and median sale prices for Cambrian Park (MLS area 14), a section of San Jose that is often fairly reflective of the county’s appreciation overall.

The first year is 2013 since from 2006 – 2012 we had a bit of a wild ride with the Great Recession, but by January 2013 we were solidly into an appreciating market.

Cambrian home prices over time - what has waiting cost you?

(more…)

Lighten up your dark home and sell for more!

Hand holding lightbulb against pink and blue sky with the words Homebuyers love light - help for home sellers with a dark homeDark homes, or those which feel dark to potential homebuyers, are much more difficult to sell, and virtually always sell for less money than those which are perceived as “light, bright and airy”.

While a property’s owner might love the cozy feeling of dark paneling, deep overhangs and low lighting, it’s not what most buyers want today.  To maximize the amount a house, condo or townhouse in Silicon Valley will sell for, it’s imperative to make it as attractive to the widest audience of buyers as possible.

In many cases, that means the dark home needs to be transformed into a light one.

How to make a dark home a little more light: start with the windows

How can a home owner make a house or home be – or seem – more bright?  One of the biggest “offenders” in this area involves windows! Here are a few window-related problems that can make a home feel significantly darker than necessary, together with some potential solutions:

  • Tinted windows, such as yellow or other colored glass at the front door or entry way:  replace with clear or translucent, colorless glass. If there’s a darkening film (for instance, for privacy), remove it and replace with a clear or translucent but uncolored film instead.
  • Curtains/blinds which obstruct part of the window: get tie backs to pull them further back and let more light in (goal is to not obscure windows at all). Easiest of all are those which use magnetic clasps and do not require any hardware be attached to the wall.
  • Furniture blocking windows should be moved or swapped out for lower items that do not cover up any of the windows. I see tall headboards often situated right in front of the glass panes – they are counter productive. Perhaps remove the headboard, or place the bed in another location?
  • Shrubs and trees covering some of the window: trim back so the window’s glass panes are 100% visible, if at all possible, to let maximum light in.
  • And of course, do make sure your windows and tracks are sparkling clean!

(more…)

Beware over improving your property when preparing to sell

Beware over improving - elegant kitchen and recessed lightsHome sellers know that certain fixes will give a good return on investment when selling. The risk, though, is in over improving your property.

Reasonable home sale prep will not over improve the home, but will include:

  • decluttering so that the home, garage, and yard all appear to offer enough comfortable space
  • deep cleaning, including the windows and  tracks
  • repairs to whatever is broken or not working properly, such as windows that don’t open and close smoothly, doorbells on the fritz, faucets that drip
  • often fresh paint and carpet are a good idea – case by case basis
  • frequently new light fixtures are helpful
  • sometimes removing window coverings to let more natural light in can be a good idea
  • sprucing up the yard, trimming bushes, planting something colorful near the front door

Strategic upgrades such as these prior to putting the home on the market will result in a faster sale at a better price in most markets.  Some sellers don’t want to do enough, whether it’s as basic as cleaning and decluttering or if it’s repairs that are imperative due to health or safety conditions.

Sometimes, though, we meet property owners with a bent toward the other extreme. When possible, we’ll do our best to get them to minimize their to do list since deep remodeling may cause a diminishing return, particularly when the market is soften and prices may be falling.

Over improving your property: how much is too much?

When the market is appreciating sharply, it may be possible to do a tremendous amount of work and get a fantastic return on it.
(more…)

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.

(more…)

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

(more…)

Property Tax Basis Transfer for Seniors

Interested in moving your property tax basis when you sell your current home and buy the next one? For those over 55 in California, this is a great one time option.

There are actually two propositions involved.  Prop 60 applies to moves within your own county, and Prop 90 relates to moves between counties which are participating in the transfer arrangement. Unfortunately, of California’s 58 counties, only 10 have the cooperative agreement to accept a property tax basis transfer from other participating counties.

Cooperating Property Tax Basis Transfer Counties (Prop 90)

The counties cooperating in the property tax basis transfer are only these, as of the date of this posting: Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura.

Some of the basics for the property tax basis transfer:

  • Homeowners must be 55 and older at the time of sale of the original property.
  • Homeowner must be on record both for the home that’s sold and the replacement property.
  • The replacement residence must be equal to or lesser in value than the original residence.
  • There are special rules for multi-family (duplex, triplex, fourplex) properties and for mobile homes.

In the most typical scenario, a senior homeowner would sell a house (or townhome or condo) and “downsize” to another, less expensive, smaller house or condo.  If the homeowner had been in the first property for a very long time, then the low tax rate would be hard to give up, but Props 60 and 90 enable that homeowner to go to another, less expensive home and carry the old tax rate along – one time, and either in the home county or in one of the participating counties.

I have known seniors to sell a house in Los Gatos, Saratoga or San Jose and move to The Villages or to gated senior communities out of the area but closer to their grown kids and make use of these two propositions.

It should be noted that while the price of the replacement home must be less than the home being sold, that doesn’t mean that the new home must be smaller. I’ve known people to move out of area and get a larger, newer, nicer home – at a lower price tag. So it’s really an economic downsizing (or “right sizing” as some like to say now).

For more information and to get all the details, please click on the California state page for these two propositions.

How Important are Parking Spaces and Garages in Silicon Valley?

Cambrian Park Home, built by LeepMost homes in Silicon Valley come with some type of parking space for cars beyond street parking.  Home buyers want to know that there will be a place for their vehicles (and often their “stuff” too).   Garages and parking are sometimes under-appreciated aspects of evaluating real estate, and sometimes there are parking surprises after the close of escrow, so it will be the focus of today’s topic.

Parking and resale value

Because a real estate purchase is a big ticket item, it is always important to consider the ability to sell it later.  (Always buy with selling in mind!)  Will the property you have or are considering buying be hard to sell  in the future if it is not a red-hot sellers market?  Parking can greatly impact “resale value and overall desirability to a large portion of consumers, who may look at that space as protection for a beloved vehicle, a safety feature, a future hobby room, or many other possibilities.

If you are evaluating a Common Interest Development (CID) condominium, townhouse, or planned unit development home with private roads and parking, there will be some special concerns that may be a little different than if you were purchasing a single family home. We’ll consider both.

General principle:  In all types of housing in the San Jose area, usually the most highly desired type of parking arrangement is an attached garage with direct access into the home and with side by side parking provided (not tandem).  This is not true in all cases but is generally true.  You would not find home buyers interested in historic homes (Victorian, Spanish, Craftsman) wanting a prominent two car garage at the front of the house, commanding the lion’s share of the view from the street. (So don’t expect to see that in Japantown, Naglee Park, or the the Rose Garden areas of San Jose.) But for the typical buyer of the more common ranch style house, the attached garage is expected and appreciated, and if it’s missing it may be a challenge to sell the property later because the property will be appealing to a smaller pool of buyers.

Regarding direct access: garages are not allowed to have a door entering into a bedroom. This is for safety reasons since bedrooms are where residents are most vulnerable, and garages are an area of increased safety risk.
(more…)

Buying, Selling and Moving Homes with Kids in Silicon Valley

kids with shadesSelling and buying homes can be exhausting and emotional, even overwhelming.  This level of stress can rise when children are involved as parents also “run interference” to a degree to help make the transition smooth for their kids.  Another added stresser is relocation to a new community far away.

What can parents and their real estate agents do to help the youngest members of the family to move as peacefully and contentedly as possible?

Communication about the moving process is key

Few of us like surprises that come on a big scale and change the way our lives are lived on a day-to-day basis.  This is also true for our offspring, for whom routine can be a comfort.   Just as you wouldn’t begin a vacation without explaining to your three year old that it’s only a trip and that you will later return home, so too it helps to explain to your child that the family is staying together, the toys, furniture and pets are coming along, but that the house or condo will be “new”.  Providing a sense of security and reassurance first can enable the process to be possibly even fun. (Young kids will think that the furniture and toys go with the house so will likely vocalize their preference for a new place with the most fun stuff unless they understand that their toys will move with them.) (more…)

Selling your Silicon Valley Home? Fix it first!

Selling your Silicon Valley home? Fix it first - image with nice house and advice to sellersSelling your Silicon Valley home this year? At the top of your to do list should be decluttering and fixing the home and yard. These basics are extremely important because they give home buyers confidence, and confident buyers write stronger offers with higher prices. When you do the work upfront, your future home buyers will be far more comfortable with an As Is sale, and you are more likely to get top dollar for your home.

Starting point: a list of what needs to be fixed

The first and most important thing if you’ll be Selling your Silicon Valley home is to go through your property – both interior and exterior – and get everything into good working order.  This may seem intuitively obvious but it doesn’t always happen.  Once I assisted some buyers with a home in which one of the bathrooms was not fully usable.  The owners just used other bathrooms but to the buyers it raised an enormous red flag and a ton of questions: when did it break? why didn’t you fix it? what’s the cost? are the sellers just hiding something?  This is a typical reaction when there’s deferred maintenance, particularly in a kitchen or bathroom. It happens in condos, townhouses, single family homes and even luxury homes.  But if you’re selling, don’t do it: get your repairs done first and foremost.

Exterior of the home

  1. Grab a clipboard or notepad, a paper and pen and walk around the exterior of your home.  Look for things which don’t work, need cleaning or otherwise need repair.
  2. Check the paint, windows, screens, downspouts, spigots, doorbell, front door, mailbox, door hardware etc. (Wood on the outside of the home tends to need painting every 5 years, by the way.)
  3. Is the house dirty or dusty? Consider power washing (close to when your home will go on the market).
  4. Are there stucco cracks or wood damage to the outside of the home (siding or under the eaves)?
  5. How are the sidewalk, the walkways, patio, or deck? Look for trip hazards.
  6. Exterior lighting – do the lights come on as expected?
  7. Sprinklers – are they working as needed?
  8. Are your downspouts extended so that water flows away from your home when it rains?
  9. Are your gutters cleaned out?
  10. Lawn and landscaping: is there a need for re-seeding, planting annuals?  Are the trees and bushes in need of a trim? You do not want trees hanging over the roof for many reasons, and bushes and other vegetation should not obscure windows as you want as much natural light to flow into the home as possible.

Interior of the home

(more…)

Preparing Your Silicon Valley Home to Sell and Return on Investment

If you are preparing your Silicon Valley to sell, you may have concerns about both time and money. You probably don’t want to spend a year getting ready, but you do want to make the appropriate changes which will bring a good return on investment. Some home owners don’t understand the connection between the home’s condition and ultimate sale price – their expectations may be a little off.

Sometimes when I meet prospective clients who are thinking of selling their home, I hear immediately, “we only want to sell As Is” and “we don’t want to have to re-carpet, re-paint, etc.”.  In the next breath, they tell me, “and we want top dollar for our house”.  Those two are often mutually exclusive desires – that is, getting one usually means you won’t get the other.  But not always, and I’ll show you how to increase the odds of doing both.

Preparing your Silicon Valley home to sell and return on investmentTo get top dollar, a Silicon Valley home for sale must appear to be the best value for the money and attract the most qualified buyers who step forward with a strong offer.  Buyers will pay more IF they feel that your home is a better value.

There are a number of things which need to be done for that to occur, but one of the most important has to do with the condition and appearance of the property. Confident buyers write stronger offers than buyers who are concerned about the house or condominium and potentially unknown risks. (Buyers are thinking “risk, risk, risk” and “beware of hidden costs”!) Home buying is both a business decision as well as an emotional decision.  To get top dollar, your home has to make sense and appeal to buyers on both levels, and we’ll discuss both in this post.

(more…)