Silicon Valley Real Estate Blog - 1SiliconValley.com

It can happen to anyone, no matter what number you offer or what terms you’re willing to agree to.  It even happens to folks here in Silicon Valley who make above-asking offers — actually, it happens more than you’d expect for the most in-demand homes.  So, there’s nothing more risky than falling in love with a home before escrow closes. 

It’s okay to show how much you want that home in your reservation price, and even in your offer if you choose to, but once that offer is made there are so many factors beyond your control.  

While you’re mentally moving your furniture into the home, the owners are evaluating what’s best for them, and even after a good informational interview, you still might not be aware of all the factors that go into their decision to accept, counter, or reject.

"I’d rather look at the letters than the offer sheets right now," he said.  I do my fair share of number-crunching, but as a person who tries to pay attention to people’s emotions, I understood why he’d feel that way.  Their family didn’t really need the money — there’d been so much appreciation in their Silicon Valley home that they were well past the number they’d hoped for.  And since this was "back in the day", all of their incoming offers were non-contingent. 

It wasn’t a matter of real estate anymore.  Remember the college admissions process?  For this family, it wasn’t only about SAT scores or GPAs: who their home should go to was about the story behind the paper.  So if you’ve given it your best effort, in terms of both your number and non-monetary factors owners consider, and your offer wasn’t accepted, what are your options? 

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Sep.15.2007 [ Filed under: Home Buyers, Real Estate Stories ] 2 Comments »

It was Starbucks today.  Sometimes it's a living room.  Other times it's their favorite restaurant for lunch.  Real estate, especially with prices like we have here in Silicon Valley, involves some critical decisions that are sometimes stressful to think about, so I try to help my clients feel more at ease any way I can.

That means sitting outside with a cup of java, for example, isn't all that unusual.  There's something about being across a desk or meeting in a conference room under florescent lighting that makes people more tense than less. 

Today was an especially important day.  We were submitting her offer tomorrow.  We anticipated multiple offers but didn't know how many there'd be.  This home was in an extremely popular downtown area and the last offer we'd submitted here wasn't the one out of six. 

Obviously, she was a little disappointed, but we talked about how much she was willing to pay, and the possibility that someone else would just be willing to pay more for that piece of Silicon Valley.  You can't predict or control what other people are going to do, but she was satisfied that she gave it her best effort based on our preparations and analysis.

Since we wouldn't know how many offers there'd be until tomorrow, I prepared two different offers for her to sign.  We'd submit the one with a higher price if there were three or more other offers.  She knew the answer to, "How much would I pay?" — we'd done the research, analyzed the comparables, and decided what was really important to her —  but the answer to "How much should I pay?" could only be found by walking in the shoes of the seller and their listing agent.

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Jul.09.2007 [ Filed under: Home Buyers, Real Estate Stories ] Comment Here »

"I believe we'll want to work with your clients," she said as I stood up from the conference table and extended her a firm handshake.  Those were the code words I was looking for and I knew my Silicon Valley client would be a very happy woman in a few hours, especially since she paid less than her reservation price!

There were two other offer packets in her hand, one had been faxed in, its sheets arranged haphazardly in a manila envelope.  The other was presented earlier in the day, stapled into a standard company folder by that buyers agent.  The listing agent put the other offers down on the table, flipped through my binder again, and smiled.  "I'll touch base with you this evening."

I want to give my clients every possible advantage and I waited until the last possible moment to present the offer.  Waiting is a common, but not always widely-used tactic, on the day when offers are being presented.  It's especially useful if the listing agent has you on their radar but doesn't proactively call to tell you how many offers they have.

It wasn't the waiting that was our advantage, though.  As I sat in this Silicon Valley brokerage's reception area, I thought about the listing agent's offer to let me fax our packet in.  Sure it would have been faster but I wouldn't be able to look her in the eye and explain our case when she first read the offer.  I double-checked the two offer binders in my case while my mind quickly flashed back from the ad slogan about never getting a second chance to make a first impression.  Smiled a little, wondering where that came from.

My clients and I had already gone over what our plan was but I had the second binder just in case.  We knew they had priced this Silicon Valley home "well" because its asking price was slightly below the relevant comparable sales (of similar quality real estate) within a half-mile radius.  We had to be prepared to compete with multiple offers: the question was, "How many?"

I pulled out the binder we were going to use.  If my client's offer were presented this morning, we may not have known about the faxed offer.  If my client's offer were presented an hour ago, we may not have known for sure about the second one.  The reason why I wait isn't to surprise the other party, it's to get as much information as possible for my client to make better decisions.

So how did we choose how much to offer in each binder?  And why was the thought process different from how we figured out the maximum she was willing to pay?  My clients and I walk in the shoes of the seller and their listing agent.

Jul.06.2007 [ Filed under: Home Buyers, Real Estate Stories ] Comment Here »

The words will sound like they make perfect sense: "If we make an offer, we should make it to win."  Even though his eyes were scanning the path from the patio, through the living room into the kitchen, his expression was motionless as he finished his sentence.

It was coming towards the day when offers — we anticipated several — would be presented to the seller.  We'd already walked the home both during the work hours and at night, on a weekday and on a weekend, to see what the neighbors were like and experience what the character of this house was during different times. 

But that sentence was taken out of context.   During our search, we'd seen numerous homes throughout Silicon Valley's Peninsula and South Bay. 

One had a loft-style upstairs work area, where he began to rattle off everything from how he'd arrange his bookshelves to where his PC would go.  Another had a combined living and dining area, which he paced back-and-forth for about twenty minutes mentally replacing the staged furniture with his.

He liked this home enough to come back several few times, but he never talked about the inside, only the neighborhood (which we both knew he coveted).  And after a few questions, he realized the truth: he really didn't like the home itself all that much. 

If that's the case, should he make the offer to win, given multiple offers on this Silicon Valley home?  The real questions are: How much do you really want it and how much are you willing to pay for it — especially when buying a home is inherently emotional?

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Jun.23.2007 [ Filed under: Home Buyers, Real Estate Stories ] 1 Comment »

There was something about it.  Maybe it was the bustling downtown area with its crowded restaurants and palatial arts center.  Maybe it was the summertime shade of the wooded neighborhood just walking distance away.   Maybe it was the knowledge that in a couple years they could send their kids to some of the best schools in Silicon Valley.

The couple next door stepped outside as I was opening the lockbox.  They moved stride-in-stride together and you could sense their affection for each other.  Their son would have a sister in a few months, and as we said our goodbyes, I could see my clients glance at each other knowingly.  Would their path follow the one of the couple we met?  Only time would tell.  The first thing to do was to step through the door.

Sometimes the feeling is unmistakable.  Cliches abound: real estate is about "location, location, location" and sometimes you find the right place at the right time.  It feels like that proverbial ray of light peeking through the cloud cover.  You just know.  

But despite how small of a world it’s become when it comes to communicating with other people — with email, IM, and texting joining their more staid counterparts in the telephone, fax machine, and (gasp!) the written letter — the world is a very large place when you’re someplace else from where you want to be.

These are the personal and financial reasons why location, location, location is so important when buying Silicon Valley real estate.  I’d like to share with you a number things my clients and I have talked about.  The best location in Silicon Valley is just as unique as the individuals who live here.

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May.10.2007 [ Filed under: Home Buyers, Real Estate Stories ] Comment Here »

I am on a mission. He and his family don’t know it yet but I am going to find them that house. Not necessarily the palatial one they left behind, but one that — with a little elbow grease from their very capable patriarch — gives them that sense of pride and stability that he’s been lamenting the loss of since his move to Silicon Valley.

"I hate paying someone else’s mortgage," he says revealing the tip of the iceberg. The chord I struck continues through the screen door and the oven, both of which he’d gladly fix himself if this were his castle. But what sticks in his craw the most is that he doesn’t feel like he’s given his family the ability to set roots between the uncertainty of rents or whether the landlord will move back into the house.

He doesn’t think he can afford a house of the size he wants in the Bay Area. Exotic loans are out of the question: while the law may not hold me responsible, my conscience does. Plus, I believe he’s too savvy to be led into one by an unscrupulous mortgage officer.

And we both know that Silicon Valley real estate is expensive. He did the reverse move from a place where a lot of folks go to lower their cost of living, and since the market there isn’t strong, he’s biding his time on his previous house. He’s gutting out the pain so that he’ll be able to make good long-term personal and financial decisions.

That’s why I’m on a mission. It involves one extra question at an open house, that one extra phone call, another drive into the neighborhood to uncover the right opportunity. The cumulation of single drops of water that form the falls — perhaps not at Niagra — but somewhere he can call home.

He needs to stop renting — not like people need food, or clothing, or other people. He needs to stop renting because he believes it’s integral to helping his family lead better lives. People have different reasons; the question becomes how to make it happen.

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May.03.2007 [ Filed under: Home Buyers, Real Estate Stories ] 2 Comments »

Come on, admit it.  We've all done it.  There have been times when you've been tempted to throw money at the problem.   Maybe you got tired of circling around for parking?  Maybe you could have waited and mail-ordered that part for less — even after shipping — but went to pick it up at Fry's anyway?  Maybe you paid a little extra to book that plane ticket one week instead of 21 days in advance?

But with Silicon Valley real estate, the stakes are higher.  Folks in Silicon Valley are busy and in a fast-moving real estate market, like the one we have in the Bay Area, it's easy to get caught overpaying for a property.  My job as a buyers agent is to alert you before that happens.

In this case, my buyer tour took us to a newer development in Burlingame, off Burlingame Avenue.   People who move to Silicon Valley often talk about how suburban it feels here compared to transit-friendly cities in the "old world" like Boston or even Chicago, so metropolitan-style developments walking distance from shopping centers or downtown areas are in high-demand.

The staging in this model home was near to opulent and the depth of the rosewood furnishings against the contemporary Asian paintings in the background were only accentuated by the ornate mirror that gave space to an otherwise compact living room.  Compact beds, not quite queen, not quite twin, occupied the bedrooms so that there would be ample room for the mahogany-style dressers. 

So with the weaknesses obfuscated by a good staging company (sellers, note that!), would townhomes here really sell for $100,000 more than comparable properties in the area? 

Yes, but not to anyone I represent.

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Apr.17.2007 [ Filed under: Home Buyers, Real Estate Stories ] 2 Comments »

Arm wrestling.  A zero-sum game where you have to beat your opponent in order to win.  There are times when I need to take this approach to get the best deal for my clients.  But in this case, there was a different opportunity.

This wasn't the first offer during our search.  We'd made an offer on a townhome in San Mateo knowing that the chances of getting that property were really pretty low.  This was a two-year-old development in an up-and-coming part of the downtown area.  It was a cross between San Francisco warehouse lofts, each with wide-open spaces, and an opulent hotel, complete with luxurious appliances, plush carpeting, and high-quality fixtures.

My client hadn't asked yet but I anticipated a couple concerns about crime in the area, which were quickly allayed with some research and a call to the local police station — they yielded nothing out of the ordinary.  My real concern for my client, though, was the three lockboxes in this townhome's oven.

I want to make sure they're getting a good deal going in and can sell at a quality price later on.  It's the part of being a Silicon Valley buyer's agent that's more important than making the deal itself, but it involves a lot more research than just taking the asking price and knocking 5% off it.

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Apr.11.2007 [ Filed under: Home Buyers, Real Estate Stories ] 2 Comments »

It was the right neighborhood near one of Silicon Valley's up-and-coming downtown areas.  I paced the angular stairwell looking carefully at the stained hardwood while my client measured out the living room.  "It's good," he said, sizing up the empty canvas beside the fireplace.  I smiled and made a left into the downstairs guest room.

Theoretically, he loved the place, from location to square-footage, to the deep auburn color of the hardwood floors.  Then, out of nowhere he exclaimed, "What in the world [ed. he didn't use that word] am I supposed to do with the loft?!"

Ah, the loft.  We had talked about it for ten minutes, bouncing ideas around, before deciding to take another look around.  I'd been mulling it over but was distracted by the plus-shaped guest room, one where the only way a queen-sized bed could fit would be diagonally.  This room would probably need to be a study.

There was another "study" though, a second plus-shaped bedroom, with inward folding corners and all.  Any bed that would fit either of these rooms would mean a very uncomfortable night for two, like my client's parents! 

For his purposes, he was right about the loft.  The master bedroom had a tall, quixotic spiral staircase next to the bathroom, winding its way up to a loft that was larger than the master bedroom itself — larger than the other bedrooms put together too.

It would have been the perfect place for a pool table, but that would have made the master suite the corridor for any guests to get there. 

Why do buyers walk away…?

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Apr.04.2007 [ Filed under: Home Buyers, Home Owners, Real Estate Stories ] Comment Here »

I figured it was worth a call.  After all, they were out-of-town listing agents who might not have known what the usual conventions were in that part of Silicon Valley. 

To them, it would probably seem like nitpicking, and in most normal cases, it would be: their property wasn't a two-bedroom but a one-bedroom loft with a den.  The distinction seems trivial but I'd been studying comparables in this complex for a while, and in this prestigious building with only four different floorplans, true two-bedroom units (where the second bedroom is walled off) were scarce and commanded a premium.

Nope, after pulling up their MLS listing, the photos showed their property was just like every other apple in the cart, a one-bedroom loft with a den — only priced $150,000 higher!  I had to find out what their thought process was.

Does the Unit's Pricing Strategy Depend on Someone Uninformed Coming Along? 

A red flag.  They were just doing what they thought was best for their client.  "We're impressed with the knowledge of the local agents but we think this unit is unique," was the listing agent's reply before we parted our separate ways.  Maybe they promised the client they would get that price?  Maybe they believed they would price high and negotiate down?  Either way, I had to do what was best for my client.

I placed the phone back into its base station and tapped my stylus on the desk a few times as I prepared to make some phone calls and recheck the comparables in the complex.  There was a recent private sale and another property coming on the market at a price about $150,000 lower than our story's unique condo. 

But even if I had three lifetimes, I never would have predicted what our story subsequently did with his listing.

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Mar.28.2007 [ Filed under: Home Buyers, Home Owners, Real Estate Stories ] 5 Comments »