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Who is present at the home inspections?

Photo of house and words "who is present at the home inspection"Who is present at home inspections for Silicon Valley real estate sales? The answer really depends on when the inspections are done and who is paying for them.

Timing of the home inspections

Pre-sale inspections:  In Silicon Valley, many home sellers get pre-sale inspections of the home (property), roof, chimney, and a pest inspection or termite inspection too as they tend to provide an excellent return on investment.  With the seller’s inspections, often the listing agent will be present for either all of the inspection, or, if the seller is there and prefers, only at the summary. Inspectors are not ordinarily left at the property alone in this area – though in some states that is the norm.

Sale pending:  When the home is in contract, both the buyer’s real estate agent and the buyer or buyers will be present for the inspections. The seller and listing agent ordinarily are not there, but may be.  Being present is a great way for the future owners to really learn about the property, so we Realtors strongly encourage them to attend if at all possible.

More than a written report

A lot of time, there are nuances to the home inspections which you will only get in person and not find on the written report. Some inspectors may volunteer info on how to maintain things in the future, such as tips on keeping rain gutters from rusting. If you don’t attend, you won’t get that education.

As much as possible, Realtors try to get all home inspections to happen at once (same day, same window of time) to minimize the buyer’s time away from work and inconvenience to the seller. In some cases, however, the roof or other inspection may not be able to be scheduled at the same time. Roof inspections normally are not tightly scheduled – the inspector comes during a window of time which is not precise. Since no interior access to the home is required, this is usually not a problem. Even so, it’s nice if the buyer and selling agent (buyer’s agent) can be there to hear the verbal information when the home’s seen.

(Side note: a few years back, I met some Realtors from Utah who said that their inspectors have lock box keys and that they inspect with buyers present but the real estate agents absent. “My broker discourages our being present at home inspections – too much liability”, one of them explained to me.) (more…)

Are sellers spying on buyers?

Camera - ring doorbellIn recent years, we have seen a boom in smart home technology with an emphasis on safety, energy efficiency, and entertainment. Security cameras are now seemingly ubiquitous. With so much technology in our homes, it’s fair to ask if it’s being used when homes are on the market. Are sellers spying on buyers?

Some are. And sometimes their real estate agents don’t even know about it, and they are being surveilled, too.

On the outside of the house, you may notice a smart doorbell with a camera, such as a Ring doorbell. These are motion activated, and the owner of the device can both see and hear whatever is triggering the Ring to begin recording.  If you are on the front porch and speaking in front of one of these devices, you should expect that what you say and do is being recorded.

Or you may notice security cameras mounted outside (they may or may not have sound recording abilities).

What about inside?

Baby monitors have been around for awhile, and of course they pick up audio as well as video.  More recently we’ve seen the advent of “NannyCams” so that parents can spy on their childcare workers.

They can just as easily spy on any visitors to their home, of course. What is amazing to me is how tiny and cheap some of these video cameras are. I’ve seen some advertised for as little as $40, and some are disguised as other appliances or devices, such as a clock radio.

Bottom line is this: if you are in a home that’s for sale, assume that everything you say and do can be seen and heard. As a home buyer, it’s best to keep your feedback on the home to yourself until you are far enough away (perhaps on the sidewalk?) so that your conversation is truly private.  For those of us who are Realtors, working in real estate, we are also pulling back on comments in the house or condo for the same reason. We don’t want what we’ve said or expressed to be used against us later.

 

 

 

Visiting an open house? What to say, and what not to say, to the listing agent if you really want the property.

Open House Behavior TipsSilicon Valley real estate professionals will usually do open houses while marketing their listings, and at these events, they have the opportunity to meet new people who may be interested in the property.  The potential home buyers who truly want the condo, townhouse or house would do well to know that in a hot seller’s market, their behavior at the open house could influence the ultimate outcome as to whether or not they will be the successful bidders when it comes time to present the contracts.

Here, then, are a few tips for aspiring home owners – a few thoughts, Dos and Don’ts  on how to help move the odds into your favor when meeting the listing agent or a colleague of the listing agent’s when visiting the home.

    1. Think of the open house as not just your opportunity to check out the property, but also for the seller’s agent to check you out.  Many people may want the house, but only one buyer or couple will get it.  Make a positive impression.
    2. Do either remove your shoes or at least ask if you ought to do so.  (Or come with your own shoe covers.) Usually the property will be clean and the sellers and their Realtor will want it to remain that way.
    3. Do say hello to the real estate licensee at the home and introduce yourself with your first or full name. If you are working with an agent, tell him or her so. Often you will be seen as a more serious home buyer because of that.
    4. Many agents will ask you to “sign in”.  If so, do that but also make a note there of who your agent is (assuming that you have a buyer’s agent) since often these sign in sheets will be used for follow up and you want to be transparent that you already have your own agent. If you don’t, by the way, you should! If there’s no sign in sheet, do tell the agent that you have a Realtor so that he or she knows this upfront.
    5. Need a Realtor?  Want the listing agent?  Careful there….  If you love the house but do not yet have your own real estate agent, be careful about the way in which you ask the listing agent if he or she can represent you (if that is what you want – which I do not recommend, see related reading notes below*).  Sometimes total strangers will approach the person holding the house open and say things that imply that they do not value the agent’s expertise at all – that they believe that the agent is only an order taker who will complete the paperwork and get a huge commission, of which the buyer wants a slice.  This is not a heart-warming comment to make and in fact is pretty insulting.
    6. Be respectful.  Ask good questions but be careful about what you say regarding the house.  Potential buyers who walk through the house insulting it loudly (I have seen it happen) will irritate the listing agent because that kind of behavior is just unnecessary and nasty. Even asking questions with a really negative edge or tone will make the Realtor wonder if you are “difficult” to deal with.  Keep it pleasant.  Calling an updated home a “fixer” can be off-putting, for instance.
    7. Want to take photos or video?  ASK.  Do not presume it’s ok to start taping or shooting pictures without permission.
    8. Kids:  along the same lines of respect: do keep your kids with you and do not let them run wild or “play” rambunctiously.  Do not let them go onto beds or jump on furniture. It is ok to look in closets or to open kitchen cabinets, but no one should be opening dresser drawers or medicine cabinets.
    9. Need to use the restroom?  ASK.  And then be very careful that it’s clean when you’re done!  Most Realtors have horror stories of parents letting a child use a restroom at an open house and leaving a nasty mess behind that they don’t clean up.  Don’t do it.  This is someone’s home, not a public building.  (And the agent probably doesn’t know where the Lysol wipes are.)
    10. Love the home?  Look serious.  If you are there a very long time, the agent will believe that you are serious about the house.  If you come back the next day with more people, the agent will believe you’re serious about the house.  If you ask some good, thoughtful questions and even take notes, the agent will believe you’re serious about the house.  All of these things will get you noticed and put you on the radar.  If, however, you slide in and out unnoticed, and you never chat with the Realtor there, you will probably not be remembered unless the open house was exceedingly quiet.  With multiple offers, it is best to be perceived as someone serious – so best to be noticed in a positive light.
    11. Do not dominate the listing agent’s time.  It’s good to engage with pleasant conversation and thoughtful inquiries about the house, but please remember that this person must try to connect with everyone there and make sure that others’ questions are answered too.
    12. When it’s time to leave, thank the Realtor holding the open house and say goodbye.
    13. Don’t arrive once the open house is scheduled to be closed. Realtors sometimes have appointments after the open house and don’t want to rush you, but getting there after it should be closed puts them in a bad position.

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Silicon Valley home sellers: are your disclosures as complete as they should be?

Questions that the disclosures raiseWhen in doubt, disclose” is the advice that real estate and legal professionals use as a guiding principal in home sales.  And yet many sellers forget or miss things that should be told to the buyer, and some listing agents are a bit sloppy in reviewing their clients’ disclosure paperwork.  It is not uncommon to see questions unanswered or only partially answered.  The home owner may presume that if the disclosure paperwork was done wrong, the Realtor hired to help market and sell the home will catch it.  Would that it were so, but too often, that is not the case.

To avoid problems later, whether small or big, it is best to be thorough and careful while making your disclosure.

Small problems are created by seller (and listing broker) omissions when the paperwork gets kicked back for clarification or to complete the needed response.  Bigger problems are forged when a sale is nearly closed and a new disclosure is made – introducing a brand new 3 day “right of rescission” for the home buyer.  Worse yet is something substantial which is only brought to light after the close of escrow.  At that point, it’s not an inconvenience, it risks being costly and time consuming to resolve it.

The State of California requires that the Transfer Disclosure Statement or TDS be filled out in most realty transactions.  The intention of the form is to help you, the property owner, to disclose anything materially impacting value or desirability.  That’s a tall order to fill, so other forms have been created to supplement the TDS, which has pretty much become Step #1 for disclosing defects and other issues to buyers.

What kind of things are often skipped in the real estate disclosure paperwork?

On the TDS, a very common error involves the question as to whether the property has any shared features with other properties.  Almost always, this answer is “yes” because there’s a fence sitting on a property line (or in the case of a condo, a common wall or at least common HOA facilities).  Some sellers think that if they respond yes to anything, it’s a problem, so just check no, no, no.  And many of the agents working with them don’t catch it.

Another common mistake is to answer “yes” but not explain further.  Often a question will broach a broad subject.  In the question about shared features, the question specifies walls, fences, and driveways – so if the owner marks yes, it needs to be clear which of these applies, or if it’s something else.

There are two other disclosures that sellers complete, the Seller Property Questionnaire (SPQ on the CAR forms, used in most of the San Jose area) and the Supplemental Seller’s Checklist (SSC on the PRDS set of forms, which is commonly used in Silicon Valley between Los Gatos and San Bruno).  Both ask about modifications to the property (PRDS is far more thorough on that subject).  Recently I showed a home that was almost completely remodeled in recent years, but when asked if the home had been modified in any way, the seller answered “no”.  And the listing agent did not catch it.

Why an incomplete TDS is bad for seller

If a Transfer Disclosure Dtatement or TDS isn’t completed, the buyer gets an automated 3 day right of rescission when it is completed and delivered. Miss a box or an explanation? You’re at risk, Mr. or Ms. Seller, of giving the buyer(s) a new 3 day contingency.
Beware of under-disclosing.  If you have had 6 repairs on a leaking deck over 6 years and it seems to leak after each repair, you don’t want to say simply that “the deck was leaking but repaired”.  The new owners will find out, eventually, that you had what appeared to be an unfixable problem.  It will not go down well.

It’s important for the home owner to really take time in thoroughly filling out this paperwork.  Non-disclosure, or under-disclosure, by sellers to buyers is the #1 reason for real estate lawsuits.

It is also extremely important for home buyers to thoroughly review the disclosure paperwork and to look for any hints of further issues or red flags.  Often the seller makes mistakes quite unintentionally due to rushing or sloppiness.  But you do want to catch it if that happens.  Ask questions.  Look at the property carefully – you may see something that the listing agent and home seller missed completely.  Investigate.

 

For more information, please also read:

What Do You Need to Know About Disclosures when Buying or Selling a Home in California?

Why do real estate agents do a visual inspection of the properties they sell?

What remodeling or replacing work requires permits and finals?

Why Is There So Much Paperwork When Buying or Selling a Home in Silicon Valley?

 

 

 

Silicon Valley Home Buyers & Sellers Tips – Beware Agent Tricks and Traps

Danger!Often times, if a relationship sours between a consumer and a real estate agent in Silicon Valley and the real estate agent is to blame, it’s not because of an intentional deceit on the part of the licensee, but rather an oversight, a blunder, or a mistake.

Sometimes, though, there are things done by the real estate licensee which are more calculated and truly are not in the buyer’s or seller’s best interest. (This runs both ways, of course – sometimes consumers pull bad stuff on Realtors, too.)  Those are the things we’ll discuss today. Sometimes the consumer never realizes that these occurrences were more than unhelpful. Other times, the buyer or seller catches on – but by then, it’s too late.

First, a short list of a few real estate tricks and traps that buyers should recognize as red flags. We’ll look at each of these in detail below the list.

  • 1-long listing or buyer broker contract commitments
  • 2-Would-be listing agents telling sellers a higher price than is likely to happen in order to secure the listing.  We call this “buying the listing”.
  • 3-trying to sell listing off market to double end it – marketing a listed home, holding open houses prior to the property being on the multiple listing service
  • 4-no lock box or keysafe & all appointments through the listing agent only (often the agent’s idea – this makes it easier for the listing agent to “double end” the sale)
  • 5-bad terms in the “other terms and agreements” section of the listing or buyers’ contract that create more restrictions on the buyer or seller
  • 6- special tricks to help you sell a home – some agents say that they have a huge pool of Chinese buyers, or that they will do “target marketing” on Facebook, or that they’ll host a Twilight Tour…. Often these are gimmicks. The idea that some licensees have is that if they convince you that they are doing something no one else is doing, or have something that no one else has, you’ll sign with them.

Handcuffed by your contract?#1 – How long of a listing time frame is too long? If homes that do sell are selling in an average of 30-60 days (which is often the case in some of Silicon Valley markets right now), then a 90 or 120 day listing agreement is not excessive if the listing contract is signed right before it goes on the market. If it’s signed 2 months ahead of time, that’s another matter – realistically, 3-4 months “on the market” is fair in many cases. A six month listing could be  a little long. A one-year listing agreement is unconscionable unless the property is a luxury home or distressed property with a very long “months of inventory”.

Ditto that with buyer-broker contracts.  Often 6 months is more than enough.  Be careful if your agent wants a longer term than that.

(more…)

Ever visit a moving company’s warehouse?

A few years back, I visited the Suddath Relocation Service’s warehouse in San Jose. Charles Canfield, my sales representative there, had invited me to come by and have a look. My direct experience with moving companies hadn’t included a behind-the-scenes visit to to their work and storage site, so I took him up on the kind offer and got a tour of a different sort. During my visit, Charles showed me how they get items labeled, organized and stored so that things are both secure and find-able when it’s time to take them out of storage and off to a new residence. What follows below are some photos of the visit, which I hope you find interesting.

When first approaching the warehouse, it’s no surprise to see some trucks by the bays to load or offload goods.

 

Suddath Relocation Systems trucks

 

After seeing the lobby and conference room, Charles took me to the warehouse, which is (not surprisingly) climate controlled to protect the items being stored. There I saw as yet unmade boxes, paper for wrapping fragile items, sheets of what look like clear plastic wrap for bundling things together. I was amazed at the immensity of the whole thing – the room, the materials, the containers. It all struck me as vast.

 

Sudduth wrapping materials

 

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How to quickly get your Silicon Valley home ready to sell

Tips to Sell FastIf for some reason you find yourself in a very big hurry to get your Silicon Valley home on the market, you may not know where to begin or how to get it done.  Today I’ll give you a quick list of the best things to do, and in order, too!

First, hire a great, full time real estate professional.  This Realtor or other sales person will be your partner from the beginning and can give you insight and advice on the best place to spend your time and money for the best return on investment – and which items are the most important in your house or condo’s particular case, given the time restrictions. Your Realtor can also help you with time lines, managing pre-sale inspections (worst case, they can happen after your home is on the MLS), etc.  Sometimes home owners begin on their own and make less than ideal choices when choosing paint colors and so on.  Since part of the service provided when you sign a listing agreement is good advice, do hire first!

Second, think clean, uncluttered, and “good working order”.  The rest of the tips all fall under the broad umbrella of staging – mostly de-cluttering, cleaning, and making sure that things work as intended.  Perhaps you won’t be able to make everything immaculate and perfect, but in many cases, with even a  few days you can hit the biggest areas fast.

Make a list of everything that needs some kind of minor repair or adjustment. Getting those items fixed will send a message to home buyers that your house or condo is turnkey and not a “fixer”.   It may not be conscious, but if home buyers find doors that squeak loudly, doorbells or lights that don’t work, they begin to wonder if there are any big ticket items that are in need of repair or replacement, too.  Hire a handyman or contractor as needed so that your home gives the right first impression.

Moving at lightening speed, with the listing signed today and the home on the MLS tomorrow? This isn’t fun, but I’ve done it with sellers at times.  In those cases, you may have one frantic 24 hour period. Think of it like you do when entertaining relatives who may go anywhere in your home…

What would you do if you had one hour’s notice before company would be arriving at your doorstep? Here are some quick fixes for the hurry up sale:

  1. Be armed with large boxes or laundry baskets so you can begin to collect things where are where they do not belong and get them at least generally to where they do.
  2. Get the floors, counter tops and surfaces almost completely clear.  If it’s newspapers, throw them out (show no mercy!).  Have a box or basket for each bedroom or room of the house and put the items into the correct basket as you go through the house.  For example, you could have one box for the garage, another for the master bedroom, another for the hall bath, etc.  Bring all boxes into each room that you are “clearing” and take just one room or area on at a time.  You may be moving 6 or 8 boxes or baskets from one room to the next, but it’s a faster way to sort and move things.
  3. If there’s no time to actually put all of these items away, do what most of us did in college: put the basket or box in the closet.  And then close the door.  No, it’s not ideal. It’s a quick fix and it will do the job 90-95% of the way.  If you’re in a rush, it’s got to be good enough.  Ditto that with the garage.  If all else fails, put things into the garage.  Some buyers may chuckle, but yours will most certainly not be the only house where they see this happen.  If you have a truly excessive amount of stuff, get a pod or use a service such as Door to Door, where they bring a container to your driveway, you load it, they then take it away and you get it back when you’re ready to move. (more…)

What does a title company do?

What does a title company do? People helping buyers, sellers, real estate professionals with title and escrow work.What is the function of a title company or title insurance company in real estate purchases or refinances? In Silicon Valley, and the San Francisco Bay Area and northern California generally, title companies perform two specific services:

  • provide title insurance for real estate being bought or borrowed against
  • provide escrow services, acting as the neutral third party which takes in the deposit money and holds it during the escrow period, disbursing all funds when escrow closes and having someone go to the county recorder’s office to record the deeds to complete the sale

Title insurance companies research the title history, find out what recorded easements may exist,reveal any encumbrances (leins, clouds on title, etc.). An escrow officer from the title company is usually the professional with a notary’s license who will sign off home buyers and sellers on the final documents, too.

There are many other services that title companies provide. Many people wonder how to hold title, and while neither your Realtor nor your escrow officer can advise you on how to do so, the title companies all have a little 1 page handout explaining the major concepts for each option on how to hold title.

If you need to sign off on the final documents out of town or even out of the country, the escrow officer and her or his support staff will work with you to coordinate it. (It can be a little tricky if overseas and outside of the U.S.).

If you are selling your house or condo and discover that an old loan that you paid off is still showing up in the preliminary title report, the escrow officer at the title insurance company will work to get it resolved and removed.

The customer service department at title companies can research the chain of title, too. Sometimes it’s quite interesting as the chain brings you back to the time of patents and land grants, with hand written deeds in a style of cursive which is somewhat foreign to us today.

There are many other things that title companies do – big and small – and most of them are “behind the scenes” that few of us ever witness directly, but without which no one would be able to close out sales with the safety net of title insurance which we value so much.

Title insurance can be a confusing concept, but I wrote about it elsewhere on this site.

What Is Title Insurance and Who Pays For It?
What is a preliminary title report? Why does it matter?

 

 

 

Realtor, Realitor, Realator, Relator, Reeltur, oh my!

Realtor Logo in BlueIn Silicon Valley, most of the licensed real estate professionals belong to local, state, and a national trade group.  There’s a name for members of these associations, in which dues paying members promise to abide by a code of ethics.  Do you know that the name is?  You’ll hear various things, even out of members: Realtor, Realitor, Realator, Relator, Reeltur.  Which is it? The answer is the first one, REALTOR.  It’s two syllables, pronounced Real-tor. (There is no a, e, i, o, or u between the REAL and the TOR parts.)

Also, please note that being a member of the National Association of Realtors (NAR), the California Association of Realtors (CAR) and the Silicon Valley Association of Realtors (SILVAR) is not the same as being licensed. The states issue licenses for real estate sales people, brokers, and other professionals. Realtors are first licensed by the state and then voluntarily join the trade group for the industry. In California, it’s now the Bureau of Real Estate which issues the salesperson or broker licnese. (Please see the related article at the bottom of this post for more on that.)

Looking for a Silicon Valley Realtor? A Los Gatos Realtor? A San Jose Realtor? Please call or email me, Mary Pope-Handy, to chat about your real estate needs, buying and selling a home here in the South Bay area. And please, don’t call me or anyone else Realitor, Realator, Relator, or Reeltur!

Please also see
What’s the Difference between a Realtor and a Real Estate Agent or Licensee?

 

 

 

What is earnest money?

Earnest Money logoEarnest money refers to a home buyer’s deposit on a home that he or she is in contract to purchase.  It’s often called an earnest money deposit, initial deposit, or good faith deposit in Silicon Valley.  The terms are all interchangeable.

How much is the earnest money?

In the San Jose & Los Gatos areas, and Santa Clara County generally, the earnest money is usually 3% of the purchase price of the home.  It is placed in an escrow account, which is usually at a title company (in northern California that’s how it is handled – in Southern California, often there is a separate escrow company).

Ordinarily, funds are due within 3 business days of acceptance of the contract, but that can be changed (it’s one of the few places where the CAR and PRDS contracts reference business days rather than calendar days). Some listing agents will counter back that funds need to be in title the next day after the offer is ratified. Some buyers may request more than 3 days if their funds are coming from abroad.  With competitive, multiple offer situations, buyers should anticipate needing to get the money to title fast and have it ready to go before the offer is presented so that they aren’t at a disadvantage.

Is a cashier’s check required for the good faith deposit?

The initial deposit does not have to be a cashier’s check, however, some listing agents and sellers may request that in a counter offer.  That’s most likely to happen in a very competitive multiple offer frenzy, and unlikely to happen if it’s just one or two bids.

Increasingly, the funds today are wired to title, but in some cases, buyers may instead write a check. For the earnest money deposit, it may be a personal check. (At the end of escrow, it must be either a cashier’s check or a wire to bring the balance of the down payment to title. Both of these are referred to as “good funds”.)  It is important for home buyers to draft the check  correctly (not made out to just “title company”, for instance), and to understand that this isn’t a check that just sits in a drawer.  The check for the initial deposit is cashed by the escrow company as soon as they get it.  Real estate brokerages tend to prefer that Realtors don’t touch the buyer’s funds, so many are encouraging that consumers wire in funds rather than hand a check to a real estate agent.

Phishing and wire fraud is a concern, so when sending funds in electronically it is extremely important to phone the title company and verify the specific instructions.

Does the earnest money count as part of the entire down payment?

Yes, if the buyer is putting 20% down on some real estate, the initial deposit is likely to be 3% and the balance of the down payment will be 17%.  The balance of funds will need to be in escrow a couple of days before closing.  Many lenders will not fund the loan on the property until and unless the buyer’s money is in escrow first.

Can the buyers get the initial deposit back if they change their minds about buying the home?

This is not a “one size fits all” question.  If the buyers have contingencies, it may be possible to back out of the transaction and have the full deposit returned.  If the buyer has written an offer with no contingencies, that may be an uphill battle, and time to consult with a real estate attorney, as Realtors are not qualified nor allowed to provide tax or legal advice.

 

Related Reading:
What is escrow? (on popehandy.com blog)
What do international home buyers need to know about financing a real estate purchase in the United States? (on Move2SiliconValley.com – relocation site)