Silicon Valley Real Estate Blog - 1SiliconValley.com

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 ] 9 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 »

With continuous days-on-market numbers getting higher for many (but not all) homes in Silicon Valley, agents know they need to do a little extra to generate interest for a motivated seller — especially in areas and quartiles where inventory is high.

The technique goes by several monikers and it can be the difference between being a motivated seller and a motivating seller.  Some call it a "reverse offer", others use the term "preemptive offer", or even "seller-initiated offer".  In any case, the technique is the same: the listing agent draws up a purchase contract that specifies terms that the seller will accept and gives it to one or more buyers. 

The contract is the same one that a buyer’s agent would write up when making an offer, except written by the seller.  All a potential buyer needs to do is sign on the proverbial dotted line.

Most of the time, reverse offers are used to open a line of communication, hoping to create competitive a competitive situation between multiple buyers, or to attract the attention of one buyer deciding between several properties.  But there are key considerations when for both buyers and sellers when the seller writes a reverse offer.

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Nov.06.2007 [ Filed under: Home Owners ] Comment Here »

It's a job interview, for a position that lasts for anywhere from the next few years to decades into the future.   And there are hundreds, if not thousands, of candidates eager to be the chosen one.  Some candidates don't make the cut because they're too far from work or they don't have the right school system. 

Others get first interviews, with the traffic that new resumes tend to attract on the MLS, but they get few callbacks and what offers drop in are filed where they belong.  The proud parents: they tap their feet anxiously as they shift uncomfortably on the increasingly hard bench in the waiting room, wondering why.  

I knew her Silicon Valley home wouldn't be like that.  Hers was the second on the market and the two weren't apples and oranges.  We spoke at length about the alternative home in the neighborhood, and the analysis was pretty simple because, while this was a prestigious subdivision, there were precious few differences between the floorplans of any of these Silicon Valley homes.  The appliances, the granite in the kitchen, the marble in the bathrooms — all were included upgrades at the same quality, if not the same color.  

But she felt the very thought of it was insane.  "That home has been sitting on the market for weeks now.  I went to an empty open house there just last week.  How are we supposed to get a better price than the other one without upgrading everything?"  The devil is in the details.

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Jun.02.2007 [ Filed under: Home Owners, Silicon Valley News ] Comment Here »

"How do we do this?" she asked looking at her Silicon Valley home and with a distant fondness.  When they'd bought it, it was the right place for their needs at the time: economical, in a good school district, and cozy enough to be relatively low-maintenance.  Theirs was, after all, a budding family. 

A few years had gone by and some promotions later, in their case both his and hers, the cozy enough feeling gradually drifted into wishing there were more room for her son to have a proper desk in his room for his homework and having a separate office in case either of them wanted to work from home.  

It was time for an upgrade, and for them, it was worth tackling the challenges involved.  Moving is never easy, physically and psychologically.  And then there are the logistics of selling the home you live in and purchasing a new one, often simultaneously.  Auto retailers have this one solved, but there are more variables involved when trading-up your home.  Here are some tips I recommend to my clients for moving into a larger, more expensive home.

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May.17.2007 [ Filed under: Home Buyers, Home Owners ] 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 »

We were looking at a Silicon Valley estate sale which was "priced to sell" according to the listing, and when you’re searching for tangible information, words like that (along with vague adjectives like "quaint" and "charming") eventually lose all their meaning! 

Instead, they become signals of things to look out for: little tooltips that say, "Pay a little more attention to me," sometimes with an exclamation point.

In this case, it was a subtle alert to look very closely at comparable properties.  And the important data wasn’t in the house were were about to look at — it was in the house across the street which just went into contract…

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Mar.20.2007 [ Filed under: Bay Area Real Estate, Home Buyers, Home Owners, Real Estate Stories ] Comment Here »

Sometimes good real estate stories don't come from real estate.  This was a lesson in paying attention to detail which I experienced (carelessly, mea culpa) some years back.

I wanted to trade in my sports coupe for something a little more practical.  I knew I took care of the car, doing regular maintenance, going easy on the clutch, and putting well under the 12,000 mile per year average on it even though it had 5 or 6 years on it.  So I took the car into the dealer to see what I could get.

The manager at this Silicon Valley car dealership came out with his checklist and furrowed his brow as he walked around the car.  He ran his fingers through the dust on the tires, opened the door and moved the large Coke from McDonald's I had been drinking on the way there, into the rear cup holder which held the loose change from that purchase, so that he could get to the gearshift and put the car into reverse. 

Little did I know that this would cause $8.95 to lead to $8,000, but probably not in the way you're thinking. 

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Mar.04.2007 [ Filed under: Bay Area Real Estate, Home Owners ] Comment Here »

Like a lot of real estate agents, I go out to see a lot of properties in any given week.  But as part of my research, I pay special attention to ones that have been vacant or on the market for a long time. 

Sometimes there will be a subtlety in the title or a major defect that keeps the house from selling.  Other times, the house is just economically obsolete and will have trouble selling at an unrealistic asking price.  Still other times, the marketing might not have been aggressive enough.

Regardless, I look very closely at the reaction of my clients or even people just walking into an open house when they first walk inside. From that experience, it seems clear that nothing damages that first impression like a bad smell. 

That damage costs much more than the few hundred dollars it takes to fix the issues.  Here's a list of several common ones and what you can do about them.

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Feb.22.2007 [ Filed under: Bay Area Real Estate, Home Owners, Silicon Valley News ] 2 Comments »