Silicon Valley Real Estate Blog – 1SiliconValley.com

Zillow has become a and useful tool for sellers, buyers, and real estate agents, however quite often, when I am trying to explain the market value of a home to a potential buyer or seller, I will hear the famous words: "But Zillow says … !"

Kudos to Zillow for providing a detailed video explanation on "Understanding the Zestimate". Zillow doesn’t have the last say, but is definitely a great tool that you can use when starting to evaluate a home’s value.

Next time you are evaluating the price of a home, don’t forget to check out our article on the hidden factors in calculating your home’s value. 

Oct.19.2009 [ Filed under: Home Buyers, Home Owners ] 4 Comments »

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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Sep.17.2008 [ Filed under: Home Buyers, Home Owners ] 3 Comments »

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

Jul.08.2008 [ Filed under: Home Buyers ] 2 Comments »

It’s a sweet day when homeowners discover they’re getting multiple offers on their property. But for buyers competing for a house, it’s a nail-biter.
 
Over the years, I’ve developed two novel strategies to help buyers win bidding war.
 
First, I aim to be the last presenter. Why? I can often gauge what offers sellers have already seen and probe them to identify their concerns. Also, by that time, they’re ready to make a decision.
 
In addition, I always try to bring my clients when I present offers to the listing agent.
 
If my clients are sitting in the same room, we can often cut the negotiation time from a couple days of phone calls down to a matter of minutes”?something desirable for eager sellers. It’s an enormous strategic advantage to be able to discuss and ratify changes on the spot.
 
The other benefit is that buyers are humanized when sellers can meet them and talk with them.
 
Such was the case in a recent negotiation for a highly desirable Sunnyvale property. When I discovered there were two offers on the table, we opted for a full-price offer.  
 
At the presentation, one offer was rejected immediately, and the listing agent let me know our competitor’s offer was better than ours. So we countered with a higher price–an additional $5,000 over the asking price–and removed our contingencies. I later learned that our competitor’s offer was still better than ours.
 
Yet, the sellers had met my clients, an engaged couple enthusiastic about buying their first home together. It turns out that the groom-to-be and the husband of the seller both worked for the same high-profile technology company, though neither knew one another. Nonetheless, that shared experience created something of a bond. My buyers were no longer just a generic couple. The sellers, rather than seeing just figures on a page saw faces and personalities and had some insight into the buyers’ aspirations.
 
The result: My clients won the bidding war. And the sellers even decided to give the house to them for a thousand dollars less than our final bid as a courtesy.
 
Had my buyers not been at the presentation, I’m convinced the competitor’s offer would have been accepted.

Related: Not Overpaying for Buying a Home

Jun.21.2008 [ Filed under: Home Buyers ] Comment Here »

Don’t be fooled!  Homes in Silicon Valley come on the market in a variety of conditions from horrible to breathtaking.  Some are dirty, cluttered, and perhaps even run down. I saw one this week that desperately needed exterior paint, landscaping to be tamed, and the removal of large quantities of faded plastic flowers that droop down over the living room window (all this in Los Gatos, with a million dollar price tag). 

Most homes, though, are better prepared for sale, as they should be. Savvy homeowners and agents know that the old adage is true: "you only get one chance to make a first impression". The home needs to be clean, uncrowded, and appealing from the day it goes on the market to maximize the seller’s return.  You want to make the right changes to improve the bottom line when selling, without over-improving such that the return begins to diminish.

In addition to that range of conditions in which homes are sold by their long term owners, we have to consider the "flipped house". A flipped house is one in which an investor has recently purchased a home, often from an original or long-time owner, usually in solid condition but with a dated, tired appearance.  What should buyers be on the lookout for?

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Apr.13.2008 [ Filed under: Home Buyers ] 5 Comments »

In most of California, the purchase agreement form used when writing an offer to buy residential real estate is the California Association of Realtors form, the Residential Purchase Agreement.  Along the San Francisco Peninsula and in Silicon Valley, though, often we use another form, the Peninsula Regional Data Service purchase agreement (PRDS contract).

Does it matter which one you use?  It certainly does!

While anything in the boilerplate can be modified (deleted or added to), the basic text is not identical from one to the next, and neither are the ramifications to buyer and seller. Here are a few examples:

- Property condition: one is an ?”as is”? contract and the other requires that the property be delivered with a warrantee of condition (no leaks, no cracked glass, no structural defects in chimneys, all systems operational, etc.)

- Repairs in escrow: one says that repairs must be by a licensed contractor, the other that repairs must be done in workmanlike manner (can be done by anyone)

- Defaulting: one contract has more ?”teeth”? with buyer or seller defaults than the other

There are pros and cons to each of these two forms. A skilled agent is ?”bilingual”? in both, understands the strengths and weaknesses of each one, and can modify as needed the form to benefit the client.  Let’s look at some examples of why it matters.

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Apr.02.2008 [ Filed under: Home Buyers, Home Owners ] 10 Comments »

"The kids miss you."  Those weren’t the words he expected to hear that night but it didn’t come as a complete shock.  After all, he was gearing up for his commute tomorrow and it was going to be the same as it always was on Monday mornings.

"Besides, what if there’s an emergency?" she said.  He passed the commute time listening talk radio and audio books, and he’d learned enough French to get him through his last business trip without accidentally ordering snails at local restaurants.  (See the article How Long Will My Silicon Valley Commute Take?)  But he knew that when the tide flowed anytime after 3pm, there was no such thing as a person in a hurry: there were just kindred spirits parked on the highway.

They could afford it now and the extra time would help better their standard of living.  She knew he had work-a-holic tendencies and had a freelance job herself.  So it just made sense to move — but not only because of the extra time.  While this part of Silicon Valley was closer to other opportunities for both of them, she also said off-hand that she liked that it was a more prestigious neighborhood with stronger schools and less cars parked along the street.

We talked earlier about the logistics of moving up to another home.  (See the article Keeping Your Sanity While Moving Up to a Larger Home.)  Because it’s such an important decision both financially and emotionally, it’s important to understand what you’re getting when you upgrade.  (Also see the article Emotions in Real Estate: From Fear to Elation.)  Here are some of the factors to look for.

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Mar.23.2008 [ Filed under: Home Buyers, Home Owners ] Comment Here »

It wasn’t so much about the squirrels.  This Silicon Valley development was advertised as brand new — which is technically true because no one had lived in these homes for sale.  But the first proverbial "for sale" sign had been put up almost two years ago and the developer still had leftover inventory.

The first to move in, though, weren’t the people who had signed their contracts.  The first occupants were actually a set of long-tailed friends using the attic as a roost. 

Indeed, uninvited guests in the attic are annoying, but there was a good chance they wouldn’t have been more than an irritating nuisance to be taken care of "soon".  Except they brought their own uninvited passengers, which were so great in number that they fell from the ceiling. 

The owners were obviously unhappy with an indoor rain made up of mites landing on the bed, couch and kitchen table — especially in their new home.  And you can bet that the threat of a lawsuit was broached more than once. 

Prevention is the best cure and knowing your rights when buying a new home will help you sidestep major headaches down the road.

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Feb.28.2008 [ Filed under: Home Buyers ] 2 Comments »

I hope you all had a great holiday season and New Years!  Looking back, it seems that 2007 was the year of the mortgage for real estate here in Northern California.  A screenshot from the New York Times mortgage rate chart illustrates how buyers (and sellers) were impacted by the dynamics of the mortgage industry this year.

This chart shows the change in jumbo mortgage interest rates during 2007.  Put in historical context, the jumbo interest rates over the summer didn’t approach the level of rates in, say, 1981, but since 2002, the housing market has benefited from mortgage rates that are historically low.

It wasn’t 2005 or 2006, though.  In May and July, some buyers discovered the home they were interested in just became about 5% more expensive at the same price because of another interest rate bump.  (A $1,000,000 P&I mortgage costs $5,996 per month at 6% and $6,321 at 6.5%.)  All the more reason to better understand how rate locks work.

Some homeowners with adjustable rates found themselves in a similar situation and ended up attempting a short sale.  Many neighborhoods were unaffected, others were peppered with short sales — where the available homes may or may not have real estate signs indicating a sale.

But many of the markets around Silicon Valley didn’t behave like one would expect from reading the news reports.  It’s the sales transaction information that tells the best story.

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Dec.31.2007 [ Filed under: Market Updates, Silicon Valley News ] 2 Comments »

There’s an opportunity here for my clients looking for a good elementary school district.  For single-family homes, the news is almost exactly the same as last year.  There were six sales in 2006 and five this year in Redwood Shores.  Small statistical sample. 

The median number has dropped 7.8% year-over-year in October from $1,192,000 to $1,100,000; the average stayed almost the same going from $1,145,500 to $1,145,000, with eight new listings in both periods and an inventory of 14 and 13 in those respective years.  The news, though, is in townhomes and condominiums.

In Redwood Shores, there were only three were closed in October 2007 (compared to 15 the year before) with inventory levels similar to 2005 and 2006.  The percent of list received went from just above asking to 93.36% this year. 

It’s sometimes difficult to be the first wave to adjust to a different landscape and changing market conditions, no matter how much data is available.  In this case, the initial valuation of these three townhomes was unrealistic, so the percent of list received is lower than it might have been if information about the shifting landscape were already digested.

There are good elementary schools in Redwood Shores.  Sandpiper Elementary, part of the Belmont-Redwood Shores Elementary School District, improved upon its elite test scores last year with a 17 point increase to 923.  When I last called Sandpiper just after the start of the school year, they were on the border of being over-subscribed, but were still able to take new students.

Obviously, it’s important to confirm availability before making a purchasing decision.  The Belmont-Redwood Shores district has two other schools over 900 API to choose from if there’s a wait list at Sandpiper (Central Elementary and Fox Elementary), and the others two come in at 875 (Cipriani Elementary) and 823 (Nesbit Elementary).

[ Median Home 2007, 2006 | Market Snapshot | How Much Home Can I Get? ]

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Nov.07.2007 [ Filed under: Market Updates ] Comment Here »