by Alex Wang on Jun 13, 2007 | No Comments »
It's out there. And if you're going to spend more than a quarter of what you make each month on it, we're going to find the right one for you.
But it doesn't end there. The process of buying a home in Silicon Valley is considered by a lot of folks to be stressful — and part of the stress comes from the shrouded mystery of the process itself. Some people want to know all the details behind the process, others just want to know what the terms are and where they need to sign. But neither wants anything to go wrong.
The process simple to talk about. From a buyer's perspective, finding what you're looking for is the first step. After which, there's making an offer and getting it accepted by the seller. Then, come the appraisal and inspections. And if everything checks out, you're ready to lift any contingencies, write a check for the down payment, and get your keys.
Which is really the crux of the matter. It's simple to talk about but there are a lot of moving parts. My clients know, though, that I grease the wheels and let them know where they have both the control and influence to help the process go more smoothly. It's not always easy but there are ways we can make it less stressful.
After all, buying Silicon Valley real estate should be simple, and it starts with a good property search. (I'll cover the other phases in future articles.)
Before The Property Search
He thought I was kidding. "Seriously, you'll be a lot happier if you wear shoes that are easy to slip on and off!" Even though we were touring properties after open house hours using my combo key, some owners still ask (or post a sign) that you take off your shoes before walking through their homes.
Keeping the floors and the carpets clean for other showings is a reasonable concern so the courtesy is warranted. But the courtesy feels much more natural when it's easy to get your shoes on and off.
Deciding How to Scout the Homes
He was going to move here with his family in a couple months and didn't know Silicon Valley that well, so I planned a tour that included cities across the Bay Area.
What was key, though, was that his family had decided how they would approach searching for a home. In this case, he'd narrow down the list to three places and take pictures of what he knew his wife would care most about.
When families are relocating, have young children or have challenging schedules, it's sometimes easier to designate a scout or use an alternative method to view homes. Tours are particularly hard on babies because of frequent stops. And sometimes the rest of the family may not even be in the same city.
Here are some approaches that I've used successfully in the past to make the home search process easier for people who are remote or have babies who have difficulty traveling.
1) Two-Phases. One person in the family who has a pretty good idea about what their priorities are and what would make folks happy identifies homes that we'll then visit again later as a group. The only disadvantage to this method is when a home is positioned for quick sale or has offers pending — in that case, families might choose to make a contingent offer.
2) Video Tours. High-quality still pictures are great for getting an impression of the style of the home, but don't communicate space very well. They can be augmented with a video walkthrough that lets people see the size of rooms and how spacious the areas in the home feel.
3) Live Webcam. While challenging and less reliable than a video tour, one notable advantage is being able to see properties remotely in real-time and ask questions when they come up. The quality is improving but is limited by the available bandwidth of an upstream EV-DO connection.
Refining Your Property Search
Knowing yourself. The week before we even thought about hitting the road, it was important to take the time to get to know what he and his family needed. Obviously, at one level, I'm looking to understand the specifications of the home in terms of size, space, and location so that we can get on the same page in terms of expectations and narrow down the search a little bit.
Similar homes in the same neighborhood can tell very different stories. (See the article The Price of the House Across the Street and Its Long Shadow.) So when I talk to clients, what I'm really trying to learn are, among other things, their:
- Previous experiences
- Immediate plans
The lynchpin in the process, though, is understanding my clients' aspirations. Everything in the property search derives from that because it tells me how they're actually going to use the home.
Much of this learning happens during our initial meeting, but there's an opportunity to course-correct after every property. We each have our jobs and while I'm looking to see how my clients react as they tour the home, I'm also looking at factors inside and outside the home to ballpark what a maximum reasonable offer for it would be. (See the article Not Overpaying When Buying a Home.)
What Happens If There Aren't Enough Homes to See
Sometimes this isn't a problem. If you're very specific about what you're looking for and not in a hurry to buy, you can often find a "more perfect" place holding out for the right home — say, one in a specific area or with hard-to-find features. Sometimes, it's not so easy and it's important to understand the root cause.
One challenge comes when holding out specifically to get a low price. It's okay to wait and sometimes I encourage that. Another option instead of lurking and hoping is to make an initial offer that can be countered, provided the offer price won't be offensive to the sellers. (Making an offer that is unrealistically low often causes the sellers and their agent to dig in and ignore other offers you might make.)
While hoping for a low list price often results in a fruitless wait, taking action may lead to negotiations and a long-term deal if the property sits. Who knows? They may even counter back immediately with something you'll be willing to consider.
But it's important for price expectations to be realistic, which is why I spend so much time trying to understand my clients' motivations.
2) Search Area
Another challenge comes when clients want a property in a very small target area, and sometimes the hope and anticipation causes them undue stress. A proactive approach — for example, contacting owners in the search area — sometimes yields a property for sale.
There are a number of cities in Silicon Valley, though, that have similar characteristics. The neighborhood might be unfamiliar, but the quality of the school system, commute time to work, activities, or community spirit might all be comparable. It may involve a trade-off that you're willing to make.
3) Personal Biases
"I never thought we'd be willing to trade the size of our backyard for a hot tub!" That was a fun day because we discovered something about them that they didn't know before, just by taking a look at a home that was close but had a smaller lot than they wanted.
By seeing homes with characteristics you didn't think you could live with, you can confirm or debunk your biases and you'll be more confident in your criteria as well as your search.
Next in the series: The Thought Process Behind Making an Offer on a Home
- How a Win-Win Saved My Client $25,000
- Keeping Your Sanity While Moving Up to a Larger Home
- Why the Perfect House Wasn't So Perfect
- Investing in the Right Bay Area School District
- Determining Your Must-Haves When Buying a Home