Silicon Valley Real Estate Blog - 1SiliconValley.com

[Steve Leung:  I’m proud to introduce this article by my friend Dan Noble, a mortgage expert with 26 years of financing experience.  The real estate financing world is obviously a different place now, especially for buyers looking to move up, and Dan describes some of the changes.]

It’s Sunday morning, and the coffee you’re sipping not only smells great but tastes extra good.  Your husband has the main section of the paper and you have the real estate section: it’s been your habit since the two of you have been so captivated by all the great deals everybody has been talking about.

Sure enough, once again this week’s paper is filled with even more and now new home builders have joined in big ads.

You’ve had your first home for a little over 4 years and the original plan was to hold it for five and leverage into another, moving up the quality of living scale.  Appreciation was part of that equation and although there’s been some recent deterioration in value, the property is worth nearly half again as much as you paid for it.  The two of you have secure employment and last year’s bonus was the biggest ever.  Your 401k is building and the company matches your contribution. 

Life looks really good right now but will it continue, what about all this trash about the economy and the bailout, and what’s up with banks that even you recognize failing, what does that mean with new home financing?

I own a personal finance coaching and consulting business named Satori Alliance.  Having 10 years experience selling real estate, 26 years financing it, and 4 years working strictly with real estate investors, please understand THIS IS A DIFFERENT GAME than ever before. 

If you think about it, act, or have the same expectations as before you will soon be boarding down a black diamond slope with an avalanche behind you that you cannot outrun!  Here are some of the changes that you need to consider.

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September 28, 2008 | Filed under: Mortgages, Home Buyers, Home Owners

Too often, when people complain about the services they’re receiving — whether it’s from contractors or real estate agents — the problem arises from a misunderstanding about each person’s role in the transaction.  As the famous line from Cool Hand Luke goes, "What we’ve got here is a failure to communicate."

That’s why it’s important for agents to educate consumers about both of our roles in a real estate transaction.  The Internet has more than enough information to help buyers identify neighborhoods they’re interested in exploring further, so I explain to clients that they don’t need an agent to begin the first part of their property search.  From that point on, however, an experienced, professional agent is invaluable.  Here’s why:

1/  The best agents are market experts, and continually renew their expertise by having their ears to the ground at all times. 

Consistent tracking on the pulse of the real estate market is a trait of any good agent: we’ll provide current, sometimes up-to-the-minute, information on schools, neighborhoods, and even tracts of homes and builders.  Many times it’s information you will never find on a website.

Recently had a client that had been monitoring a luxury development in Emerald Hills.  Persistently keeping track of the activity in the neighborhood early and often helped my client purchase a bank-owned property before the property was put on the market — and for several hundreds of thousands dollars less than he would have paid otherwise!

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September 17, 2008 | Filed under: Home Buyers, Home Owners

The California Department of Education has released its 2008 Growth API scores for Santa Clara County and San Mateo County, which measure yearly improvement from the state’s 2007 Base API scores. The API (Academic Performance Index) scores are considered the cornerstone of California’s Public Schools Accountability Act of 1999, and measure the academic performance and growth of the state’s schools according to a range of academic factors.

The Los Altos, Saratoga, Cupertino, and Palo Alto elementary school districts all maintained district API averages above 900, an excellent score (which is par for the course in these districts).

The competitive Cupertino Union schools improved from an already-elite score of 930 to 941, and its border school Stocklmeir Elementary — which students who are living in Sunnyvale can attend — notched up 13 points to 959. To offer some perspective as to the strength of these scores, the average state API for all grades is 742, up from 728 last year.

This year’s score report also reflects improvements at both Cumberland and Cherry Chase, the two top elementary schools in Sunnyvale. Both broke the 900 mark once again, with respective scores of 920 and 909.

Also emerging are up-and-coming schools to watch. Take Ellis Elementary in Sunnyvale, which entered the 21^st century with a score in the mid-700s and now consistently scores in excess of 800. This year, Ellis improved 17 points with a score of 831.

The Campbell Union Elementary District’s Forest Hill is another school on the move. At a 2008 score of 888, Forest Hill is inching closer to breaking the 900 barrier. Up from 879 last year, Forest Hill was a low-800s school in 2000. We’ll continue to keep an eye on these continually improving school systems as they maintain their march up the API ladder.

September 08, 2008 | Filed under: Schools

Recently, reporter Kate Thompson of KRON 4 contacted me to get our on-the-ground experience with how home values and school qualities in Silicon Valley relate to one another.  We’ve put together a number of articles on real-life stories as well as an entire section for schools, dedicated to statistics and tips for understanding what those school rankings really mean.

We sent agent and Silicon Valley Real Estate Blog writer Alex Wang to talk about the details of a recent transaction he was a part of and he recounts how the demand for good schools pushed that sale to go faster and for a higher sales price.  And you can see what he had to say starting at 01:30 of the KRON 4 report below:

You can also see the report through its direct link.

August 22, 2008 | Filed under: Silicon Valley News

The July issue of The Registry, the popular Bay Area real estate magazine, features the Silicon Valley Real Estate Blog, 1SiliconValley.com saying:

"…the site offers many well-written articles on a variety of relevant subjects, from school API scores to new developments built or approved in a particular neighborhood."

"…a great source of information for South Bay first-time buyers."

Our own Alex Wang is featured in their Residential Market Report on page 40, "Boom and Bust Still Exist Side by Side".  In an interesting anecdote about the lending crisis, he offers a story of a self-employed client with a $200,000 annual income who had to endure a complete third-party audit before his loan could close.

July 19, 2008 | Filed under: Silicon Valley News

Home photos can deceive. Depending on the photography, great houses can seem ho-hum and ho-hum houses can seem great. 
 
And though professionally-photographed homes on real estate sites aim to woo you, don’t allow oh-ah photography to limit your choices. By ruling out a house just because it’s less photogenic than the competition, you may lose out on some truly terrific finds.
 
For instance, a client relocating from Canada was living in corporate housing while he searched for homes, and he’d been sending web links to his wife to preview properties.
 
It seemed like they’d found the right house. The photos were knock-outs and really showcased the property well. Before the wife arrived, I prepared a contract so we could put in an offer right after she saw it. But the property didn’t show well. The sellers hadn’t staged it and the home wasn’t in top shape.
 
I recommended that we take a look at some other comparable houses that she’d seen online. Its images weren’t heart-stopping, nor did they do the home justice. They didn’t, for instance, help people to envision the space and layout.
 
But when the client saw the property, she loved it. For one thing, it featured 400 square feet more than the first house she’d seen. The extra square footage was ideal because the couple had two children. We ended up writing an offer on this second, larger house.
 
Had the client automatically eliminated this home because of iffy pictures or I, as their agent, had discouraged her from even visiting it, the family would have lost out on a spacious property that turned out to be ideal. 
 
As you’re choosing properties to visit, do weigh the images in your decision-making process, but don’t make them the sole criteria. And be sure the agent you’re working with is open to showing you homes that may not feature the most striking photos.
 
Sellers’ tip: Buyers do place a premium on good photos. Sometimes you won’t get an opportunity to make a second impression, so be sure those first images wow viewers. 

Related: Choosing a Home Inspector in Silicon Valley

July 08, 2008 | Filed under: Home Buyers

High density developments are becoming the wave of the future.  Perhaps the most prominent "high density" development in the Bay Area is Santana Row with trendy shops & exclusive restaurants, and contemporary residential lofts tantalizing the progressive bay area resident to be a part of this movement.  

This has become desirable for many bay area residents that want to have entertainment, shopping and a social outlet waiting just outside their front door.  Many downtown businesses sense the high demand of residential-retail zoning, which is alluring many business districts to take advantage of this commercial high density epidemic.

The public concern for high density zoning is that it will bring unmanageable traffic and cars and high taxes and noise to the community.  On the flip side, some residents have voiced excitement and acceptance that it will bring money to the city, restaurants and better quality entertainment.  Moreover, it will lead to higher economic activity and productivity, save tax dollars, and increase property value.  As worrisome or exciting as it may be to the community, there is hardly an area untouched by this new wave of high density development; San Jose, Santa Clara, Sunnyvale, Palo Alto, Campbell, Los Gatos and even Willow Glen are all conforming to this new way of life.

An example of high density development that has majority of public acceptance is Sunnyvale Town Center’s new urban development project.  It has been underway for some time but the ultimate outcome will be 991,000 square feet of retail space, 315,000 square feet of office space and 292 ownership housing units.  There will be a 14-screen movie theater and a 200 room hotel located at Murphy and McKinley Avenues.  The 184-acres project encompasses a large block bounded by Mathilda, Washington, Sunnyvale and Iowa Avenues, known as the Town Center Mall.  The shops are planned to start opening in early 2009.  The vision of this new development is for a lively people-friendly place for shopping, working, living and entertainment. 

Sunnyvale residents are actually quite pleased with the new development, as it will bring in revenue for the city, increase visibility to the area, bring in restaurants, and retail and ultimately boost their home values.  Some residents of other neighborhoods are not quite as pleased.

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July 02, 2008 | Filed under: Sunnyvale, Santana Row, San Jose

Please join our own Sara Greenwood at the Grapevine in Willow Glen on Wednesday, July 9th at 6pm. 

She’s hosting a neighborhood mixer in her home town with plenty of food, wine and non-alcoholic beverages too.  For more information and details on the event, please visit her page on Willow Glen 2.0.

July 02, 2008 | Filed under: San Jose

Rep. Honda’s office contacted us about the workshop the Congressman is hosting on protecting your home from foreclosure.  This is a mainstream topic even for folks in Silicon Valley where we have a high average income and many people who are generally financially savvy. 

Here are some details of the event they’d like to publicize:

5:00 p.m. – 7:00 p.m.
Wednesday, July 2, 2008

Berryessa Branch Library
Community Room
3355 Noble Avenue
San José, CA 95132

Attendance is free and open to the public.

Please RSVP by email at Honda.RSVP (at) mail.house.gov

For more information please contact Christine Pham or Chris Schwarz in the Campbell office at 408-558-8085.

June 30, 2008 | Filed under: Silicon Valley News

A contingency in a real estate purchase contract is a way in which a buyer (or seller) could get out of the contract within a set period of time for a particular reason. For example, if there is a buyer contingency that the home must appraise to purchase price, but the appraisal comes in low, the buyer can get out of the agreement because of this - as long as the buyer has not already signed for the removal of that contingency. A seller might have a contingency that the sale of the home is contingent upon the seller finding a replacement property.

Most home buyers and sellers in Silicon Valley understand that ordinarily, home purchases are contingent upon or "subject to" their approval of the property’s condition and upon getting the desired loan. Under the broad umbrella of property condition and financing, though, there are other relevant or supporting issues, and consumers may not be aware of them.

For instance, with a loan or finance contingency, there are several key steps to go through in order to be assured that the lending institution will extend the loan as planned.

A pre-approval means that the buyer has turned in bank statements, pay stubs, copies of recent income tax forms, debt information, and so on - and all of it has been submitted to a lender (not just the person taking the loan application, who has conditionally approved it). With that approval, the lender then should require only a ratified purchase agreement, a preliminary title report, and a satisfactory appraisal.  Actually, though, there’s a little more to it than that. What other issues could there be?

• if loan rates change substantially and the buyer has not "locked" the loan, it may not be guaranteed
• if there’s a delay in the close of escrow (rain forcing a delay in fumigating the property, for instance) and the buyer’s loan lock rate expires, the lender may not grant the loan
• many lenders require an "outside appraisal review" and if it doesn’t get through that step unscathed, the buyer may not get the loan
• natural disasters such as fire or earthquake can cause lenders to pull the loan until the property is reinspected and/or reappraised

So buyers and sellers will want a little more information than simply "the buyer is preapproved". Here’s what they need to know.

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June 27, 2008 | Filed under: Silicon Valley News