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Online home valuation programs and why they are usually inaccurate

The online home valuation websites are in high demand for spot checking a price. They are fast, easy, and free. 
Online home valuation graphic: same House Different ValuationsEveryone wants an easy answer, but often the easy answers aren’t all that accurate.

Online home valuation confusion

Sometimes our clients present us with “THE VALUE” of property per one of these free online home valuation websites sites and in some cases, they challenge us to disprove it (Zillow says it, or some other site, so it must be right, goes the thinking).  If they want to buy a house which is listed for more than the auto-comped value, it may cause some emotional anguish.  And if they want to buy one which is listed for less, they may feel a little giddy – unless multiple offers are looming.

The same is true with home sellers.  They agonize when Zillow, Trulia or some other big name site places a worth on their property which is less than what they feel it should be.

Often the best way to respond is to show many of the online valuations and not just the one the client is focused on (often that’s either Zillow or Redfin, but some are attached so some other site’s numbers.

What might surprise a lot of people is the huge discrepancy in values given.

Sample auto comp values online

A good exercise is picking a home that you know fairly well and then seeing what the online home valuation tools say for each one. I picked a home that I know and ran the address through several websites that provide automatic pricing info. Here are the results, from low to high:

Not included in online home valuation study:
Eppraisal $2,072,000 (too high)

Included in the online home valuation study:
Chase $1,721,800
Collateral Analytics (via Realtor.com)  $1,671,000
Redfin $1,644,906
CoreLogic (via Realtor.com) $1,631,300
NAR RPR $1,617,440 (subscription only for Realtors)
Zillow $1,580,300
Quantarium (via Realtor.com) $1,566,759
Bank of America $1,504,391

(Please note: the Trulia home value estimator is the same as Zillow’s Zestimate because Zillow owns Trulia.)

From top to bottom, the amount varies by $217,409! That’s a 14% gap between top and bottom. Had we included Eppraisal, it would have been even crazier.

How can the online home valuations disagree so much?

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Kooser neighborhood

The Kooser neighborhood is conveniently located, features sought after schools, and offers a good value in San Jose’s Cambrian district. Many of the street are tree lined and most homes are well kept. This part of the valley has some nice perks, such as being close to the J & P Cosentino Family Farm as well as the Princeton Plaza Mall. Freeway access is a breeze!

I’ve sold a few houses in this area and my clients have all been very happy living there.

Joseph Lane - Tree lined street in Kooser area of Cambrian in San Jose CA 95118

The street pictured above is Joseph Lane. It’s one of the many roads in this part of San Jose which enjoys mature trees lining the sidewalks and streets.

Where is the Kooser neighborhood?

The Kooser neighborhood is located within the Cambrian area of San Jose, 95118.

The boundaries for the Kooser neighborhood are Camden Avenue to the west, Kooser Road to the south, Meridian Avenue to the east, and Highway 85 to the north.

From here it’s very easy to access Highway 85 via Camden Avenue (there’s a Park & Ride at that intersection, too) or to make use of Blossom Hill Road to move east-west.

Kooser neighborhood - Cambrian area of San Jose 95118

There’s a weekly farmer’s market at the Princeton Plaza Mall, some great shops and places to dine, too.  The new OSH, or now Outdoor Supply Hardware, is a wonderful store as well.

What are homes like in the Kooser neighborhood?

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Cambrian home prices rise sharply

Cambrian home prices rise sharply as multiple offers and overbids result in shockingly high sale prices. The Cambrian real estate market has been like this, truly on fire, for the last 45-60 days or so. One friend of mine had her Cambrian listing on the market and under contract in December, it fell through and resold for more than $100,000 more in November. Turns out, that kind of price jump is exactly what is happening in the Cambrian real estate market today!

When I looked at the numbers on the MLS  a few minutes ago, I thought it was enough of a story to post about it now (Feb 25), before the month is even over. The better homes, which are nicely  updated and in good locations and priced aggressively, have been leading the pack, but it seems that many home types and price points are enjoying the benefit of this strong seller’s market.

One downside, of course, is that many buyers are having problems with low appraisals.

Cambrian home prices rise sharply: graph

This first image is a graph of the Cambrian median sale prices and the average sale prices month over month. What’s nice about this view is that it makes the upward jump in February (so far this month) very obvious to see.

 

2020-02-25 Cambrian Median and Average Sale Prices SFH Graph

 

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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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Resort living at 3012 Monte Cristo Ct, Hollister

Today I’m posting about a Realtor colleague’s listing with permission from her. The house at 3012 Monte Cristo Court, Hollister, offers an amazing package of luxury, contemporary design,  expansive land, relaxation opportunities galore, and a private vineyard. For those wanting to move away from the hustle and bustle of Silicon Valley but remain close enough to connect in person easily, this amazing property could be ideal.

 

3012 Monte Cristo Court, Hollister

 

Quick details on this luxury estate at 3012 Monte Cristo Court, Hollister:

  • 4 bedrooms
  • 3.5 bathrooms
  • 3500 SF (appx)
  • Lot size 1.31 acres (appx)
  • Built in 2000
  • Pool and spa
  • Exquisitely landscaped, front and back
  • Private vineyard
  • On the Cienega Wine Trail
  • Close to downtown Hollister
  • MLS# ML81741055
  • Offered at $1,275,000

The house offers an open concept floor plan plus a wonderful outside area complete with summer kitchen and pool.

 

3012 Monte Cristo Ct, Hollister - front left view

 

The inside features a living – dining room combination, a butler’s pantry, and a kitchen with nook open to family room. The living, dining, and family rooms all feature high ceilings. The spacious kitchen features gas cooking, an island, and a pantry, among other amenities. In the photo below, please find the kitchen and nook with an amazing view of the stunning back yard.

 

3012 Monte Cristo Ct, Hollister - kitchen and nook

 

And a view of the resort-like pool, spa, and part of the yard:

 

3012 Monte Cristo Court, Hollister

 

To learn more about this stunning home, please see the Virtual Tour HERE. There are 95 photos on the virtual tour, so I highly encourage you to check it out! Or phone Susan Fixsen, of Pacific Oak Real Estate Services, the listing agent, at (831) 245-5195.

 

 

 

3693 Cabernet Vineyards Circle in West San Jose

Fantastic west San Jose townhome at 3693 Cabernet Vineyards Circle! Just listed today! Offered at $975,000

 

West San Jose townhome: Front of home & walkway

West San Jose townhome at Cabernet Vineyards Circle

 

I just listed a beautiful 3 bedroom, 2.5 bath west San Jose townhome near Santana Row and am excited to invite you to see it:

Open House

  • 2018-10-17 09:30 AM to 12:30 PM
  • 2018-10-20 02:00 PM to 04:00 PM
  • 2018-10-21 02:00 PM to 04:00 PM

Quick Facts on this west San Jose townhome:

  • 2 bedrooms
  • 5 bathrooms
  • 1496 square feet (per county records)
  • 1100 SF lot size (per county records)
  • Built in 1990
  • Attached 2 car garage
  • Townhouse style building, condominium ownership
  • Central air conditioning
  • Water softener
  • Monthly HOA dues 285.86
  • MLS # ML81727678

Please browse a sampling of photos to get a feel for this lovely home here. You can see ALL of the photographs at the virtual tour site.

This updated townhouse features an open floor plan and loads of natural light and offers a spacious front patio for dining and relaxing outdoors.

 

3693 Cabernet Vineyards Circle, San Jose CA 95117 Front Patio

 

Enter the home from a pleasantly landscaped walkway and see the spacious front patio with plenty of room for entertaining.

 

3693 Cabernet Vineyards Circle, SJ 95117 Living room and front door

 

The tiled entryway leads to the main living areas of the home, which feature gorgeous engineered hardwood floors, recessed lights, plantation shutters, and a wonderfully open floor plan.

Living and dining:

  • Engineered hardwood floors
  • Gas log fireplace
  • Built in storage
  • Recessed lights
  • Extra large storage closet under the staircase

 

3693 Cabernet Vineyards Circle, San Jose CA 95117 Living Room fireplace

 

The living room boasts an easy care gas log fireplace and some built in storage.

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Free E-Waste Drop Off this February

Mark your calendars, it’s time to clear out your E-Waste! From 9AM to 1PM on February 10th in Saratoga and Campbell, and on February 17th in Los Gatos you can drop off those old and broken electronics, courtesy of West Valley Collection & Recycling. Drop off is free and easy, but come prepared. Restrictions apply to what you can deposit (check the list below), and be ready with your ID to leave your name, address, and phone number, which will be kept confidential but is required by the State of California for E-Waste disposal.

What to Bring:

  • TVs
  • Monitors
  • Computers
  • Laptops
  • External hard drives
  • Keyboards and Computer Mouses
  • Printers
  • CD, DVD, & Blu-Ray Players
  • VCRs
  • CDs, DVDs, Blu-Ray Discs and VHS tapes
  • Scanners
  • Electronic Games
  • Radios and Stereos
  • Etc.

No Appliances, Batteries or Light Bulbs!

Please call (408)283-9250 for questions regarding other drop off items

Where to be?

Here are the drop-off locations as provided by WVC&R.

Drop Off for February 10, 2018 (Saturday) 9am – 1pm

Saratoga Prospect Center
19848 Prospect Rd, Saratoga 95070
Located between Miller Road and Saratoga-Sunnyvale Road

Orchard Community Church
157 E. Rincon Ave, Campbell 95008

Drop Off for February 17, 2018 (Saturday) 9am – 1pm

Calvary Church of Los Gatos
16330 Los Gatos Blvd, Los Gatos 95032

 

See the event flier herehttp://westvalleyrecycles.com/serviceareas/pdf/E-Waste-Feb2018.pdf

Or visit the WVC&R page on E-Waste here: http://westvalleyrecycles.com/serviceareas/singlefamily-universalwaste.html

 

 

 

Shield your eyes!

Sometimes you need to shield your eyes and have a sense of humorWhen you’re in and out of people’s homes, sometimes you experience things that you don’t expect and don’t want to see.  Some homes should come with a warning: shield your eyes! And have a sense of humor, if at all possible!

The other day, I met with a Silicon Valley appraiser at a home that I have under contract in the Santa Teresa area of San Jose.  She informed me that sometimes people don’t pick up at all for her visit, which is pretty surprising given that she’s armed with a camera and is required to use it.   Sometimes beds are unmade, curtains drawn, and the home a mess.  That’s not great.  But what she found intolerable was seeing the resident’s underwear on the floor.  The appraiser stated that for refinances, she makes sure that the bra or undies make it into the photo and onto the appraisal report. Passive aggressive, no?  But I understood her point.  Why did they want her to deal with that?

Usually when residential real estate is for sale, the owners do an exceptionally good job at tidying up.  Some will joke that their house looks so good now that they don’t want to sell.  Unfortunately, homes are not always in “show ready” condition. And at times, what the Realtor and home buyers see is downright embarrassing.  When consumers come through a condo or house and find unmentionables lying about  – especially if they appear on the floor rather than folded laundry meant for a drawer – they get grossed out. Embarrassed buyers don’t buy.  They leave.  They do it quickly. And they don’t come back.

Some things I’ve experienced or had happen that made me want to say “beware, time to shield your eyes!”: (more…)

Saratoga Quarry Park

Saratoga Quarry Park

Just east of Hakone Gardens at the edge of downtown Saratoga Village off of Congress Springs Road sits the 64 acre property which is Saratoga Quarry Park.

The site was first used to mine from the hills all the way back in 1856 when it was used to quarry lime for the gold and silver mining industry.

The history of Saratoga Quarry Park

Quarry Park in Saratoga, CA

Saratoga Quarry Park was purchased in 1921 by Santa Clara County to extract rock and gravel for the county roads. In 1967 the county stopped using this site as a quarry. Still county property, public workers began to use the location as a recreational facility, with volunteers building picnic grounds and barbeques, landscaping and hardscaping. County employees held parties and even weddings on the site until the late 1990s.

The City of Saratoga purchased the property in 2011 with the intent to develop a park. The park opened with 0.8 miles of trails and picnic grounds on October 31, 2015. Someday, the city hopes to add trails which would connect the Quarry Park to Hakone Gardens and another to the Skyline to the Sea Trail through the Santa Cruz Mountains.

The old quarry in Saratoga California

Part of Saratoga's old quarry, off Big Basin Way

While quarry ridges have been softened and landscapes to return the mountainside to a more natural habitat and prevent erosion, many remnants from the quarry days remain and are even celebrated. Two marked tunnels, though blocked off for entry, have pathways built for visitors to peek inside and learn about the work that was done there. Some old, large gears are now used as decoration, such as axles from mine carts being used as benches. The largest structure is the Old Loading Structure, the concrete remains of the building still standing by the parking lot entrance. Once used to deposit freight into train cars and then into semis, the building now holds large black and white photographs from when the quarry was active.

 

Vollyball court at the quarry

Many of the special features, such as native gardens, boardwalks, and viewing platforms were Eagle Scout Projects from troop 566, added in 2015.

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Home inspection vs appraisal

Silicon Valley home buyers are sometimes confused about the difference between a home inspection and a home appraisal.  Are they one and the same? Not even close!

magnifierA property or home inspection is done to determine if the major components of a house, townhouse, condo, etc. are all working and in satisfactory condition, and to point out defects and problems so that they may be addressed by the current or future owner.  The property inspector will make a visual inspection of things like the foundation (is it cracked, is it bolted?), are there any issues in the crawlspace (moisture, ponding water, cellulose debris), the attic (is there evidence of vermin? are electrical junctions all in boxes? is there enough insulation?) as well as the furnace, water heater, etc.  The inspector may check to see if the water flow is good in the home and at the water main.   These are all things that the appraiser does not do. (There are other possible inspections, too, besides just the home inspection, such as chimney, roof, HVAC, pool, foundation, etc.)

Typical Cambrian Gardens Floorplan: 3 bed, 2 bath, about 1250 SF (San Jose neighborhood)An appraisal is a formal statement of value by a licensed appraiser.  The appraiser measures the size of the home to establish the square footage.  The appraiser does not check to see if the furnace works! However, if the roof is very old, if the home needs substantial remodeling, that will impact the assigned value.  The appraisal is used by the lender to determine how much the bank should be lending on.  Often, that’s the same amount as the purchase price.  But sometimes not!

What happens if the appraisal is lower than the purchase price of a home?

A buyer with 20% down payment is in contract to purchase a Cambrian house for $1,400,000.   The expectation is that the bank will fund a loan for 80% of purchase price, or $1,120,000.  If the appraiser finds the value to be only $1,350,000, the loan will be 80% of that number – not the purchase price. In that case, the mortgage would be at $1,080,000. Note: most people think that the buyer will be “making up” the full $50,000 shortfall, but that’s not the case.  The amount to make up is $40,000, not $50,000 because it’s the percentage of the gap, not the whole thing.

If you happen to be buying residential real estate “all cash”, you will not be required to have or pay for an appraisal.  You are also never required to have inspections, but unless a seller is providing excellent pre-sale inspections, it would be a huge and possibly costly mistake to skip having them.

Related reading:

Home buying: home inspection (on the popehandy.com site)
Home selling: pre-sale home inspections (also on popehandy.com)