Home buyers in Silicon Valley are getting frustrated, discouraged and disheartened as they write offer after offer, only to lose out in multiple bid situations. It’s not just the poor FHA home buyer either – this is happening to those with 20% down and more too.

What can be done to improve the odds of success?

Sometimes the buyer’s agent either does or doesn’t do certain things which can impact how your real estate purchase offer is viewed by the listing agent and seller(s).  Here are 5 important things that the buyer’s Realtor or sales person can do which will help the odds of success:

1. The agent should read the MLS printout carefully to see if there are any instructions regarding offers.  This one may seem obvious. but too many buyer’s agents just draft the offer and send it in, ignoring information that will probably be useful (such as offer deadline, preferred form - CAR or PRDS contracts, availability of disclosures, the request to call before writing the contract etc.).
2. The buyer’s agent should call or email the listing agent before writing the offer (and after reading the MLS!).  Sometimes there are requirements or just preferences that won’t be known unless contact is made.  Additionally, though, the listing agent will simply want to know about the level of interest and not have any surprises – it’s a courtesy call.
3. The agent should ask if it is possible to present the offer in person…and be willing to do it, of course.  Many seller’s agents won’t want a live presentation (most would email), however the fact that your agent is willing to spend the time and make the effort to present in person usually speaks volumes about his or her professionalism. It’s also a hint that the agent is a cut above most.  In my real estate practice, several times I beat out other offers by asking if I could meet with the listing agent and sellers to discuss my clients’ offer, and then doing it.
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One of the mental traps I see that can foul up real estate expectations across Silicon Valley is the over emphasis placed on “price per square foot“. Here’s where the internet can seriously mislead people into thinking they understand home values more than they do, resulting in botched negotiations, frustration and disappointment. So let’s talk about it.

As one factor among many, it’s completely fair to include the price per SF when trying to determine what a home’s probable market value ought to be. (Remember, too, that a house, condo or townhouse isn’t worth one exact number, but a range – because the terms involved also impact the sales price.)  Although price per square foot is one way of finding approximate value, often is not the best, especially if you use it alone, because there are other factors besides the square footage of the house.  Here are some of the other factors that can mess up that valuation based on price per SF alone:

• precise location (view, proximity to something undesireable)
• lot size
• lot shape & access (flag lots may sell for less than homes directly on the street)
• whether the house is below or above grade/street level (most people don’t prefer being down from the street)
• back yard size
• amount of remodeling (and how recently it happened, whether with permits/finals)
• care for the home
• additons vs original square footage (more…)

Right now I’m working with a number of very frustrated home buyers.  Silicon Valley real estate inventory is painfully low, and in the lower price ranges especially, that means multiple offers are fairly common.  FHA home buyers, in particular, are getting out bid and out negotiated by all cash buyers, many of whom are investors.

How low is the inventory?  Let’s have a look at January’s inventory for houses & duet homes (“class 1″ or single family homes) over the last ten years in Santa Clara County (San Jose, Los Gatos, Campbell, etc.):

2012  1,382
2011  2,007
2010  2,426
2009  4,759
2008  4,872
2007  2,698
2006  2,202
2005  1,285
2004  1,612
2003  3,119

The average January inventory of available houses over the last 10 years is 2,636.  At 1,382, January 2012′s available inventory of houses for sale in the San Jose area was just 52% of normal.  (more…)

Cinnabar winery sign (Big Basin Way, Saratoga)

In many communities such as Saratoga, Los Gatos, Los Altos, Willow Glen, Campbell and Palo Alto, there is a high premium placed on homes which are close to the downtown area.  Many real estate agents advertise these as “walk to town” but the idea is simple: it’s nearby, you can stroll, skate, ride or bike, wheel yourself and forget the car.

Downtown Saratoga, also called Saratoga Village, welcomes residents and visitors to a charming, scenic area with fabulous shops, spas, wine tasting venues, restaurants and more.  This part of the city boasts top scoring schools as well as lovely older and historic buildings and a gorgeous park alongside Saratoga Creek. Whether you spend an afternoon or a lifetime in Saratoga, this part of town will call you back again and again!

What do you need to know about buying a house, townhouse or condo in downtown Saratoga?

There are a few points which you are well served to know when purchasing residential real estate in this upscale community. We’ll touch on a few of them here: historic homes, traffic & noise, natural hazards, parking, and special issues with condos, townhouses and PUDs (planned unit developments).

First, this downtown Saratoga Village zone is historic; while not every property is deemed historic, many are and that means that there will be restrictions on remodeling and expansion of single family homes or houses. For instance, original glass in windows may need to remain if you’ve got a Victorian house dating from the 1890s, and expansions may need to be off the back of the home so that the facade keeps its initial look and feel (just examples).  This can be frustrating if you buy a luxury home that “needs work” and you are surprised later. If the house was built before 1950 or so, double check the rules! (more…)

Some Silicon Valley home buyers do not want to have their own buyers agent, but instead expect that they can find properties in the San Jose area that they want to see and request that the listing agent show it to them in a private appointment.  These same potential buyers may be surprised that the listing agent may refuse to show them the listing outside of a regularly scheduled open house – that is, if the seller is permitting open houses.

What’s going on?

In earlier articles we’ve discussed the need for a buyer broker agreement (verbal at the least, but possibly in writing) and why you, as a buyer, ought to have your own representation at the negotiation table.  (If you missed these, see the links under “related reading” below.)   Today I want to dispel the myth that the listing agent is required to open up and show condos or houses for sale to anyone who calls and requests seeing them and explain why that’s the case.

Showings of homes for sale are determined by the listing agreement or contract between the home seller, the listing agent or Realtor and the broker

The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate.   It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. Here are some of the expected scenarios and reasons why showings are somewhat restricted most of the time: (more…)

Should you market your home for sale through the holidays?  It’s now mid November, and if your property has been listed for sale but not gotten an acceptable purchase offer, you may be thinking of taking your house or condo off the market until sometime in the new year. Is that a good idea?  Below, please find some considerations for you as you decide what to do. We’ll

Pricing: will the home sell for more now, or in the new year or spring?

No one can tell you whether prices will be better or worse in the first quarter of 2012 than they are now.  I just returned from the annual conference for the National Association of Realtors (of which I am a member), and quite honestly, I got conflicting information.  Some reports indicate that prices will be lower in the spring, others that they will be higher – or interest rates may be higher, which puts pressure on pricing since affordability is strained when that happens.   Pricing is local, though – so no matter what’s happening nationwide, it could be different in Silicon Valley, in Almaden, Cambrian, or Los Gatos, or in your subdivision or school area.  But bottom line: we really don’t know what pricing will do, we only know the probable buyer’s value – a range of likely sales prices – right now.

Being disturbed during the holidays

Many home owners really don’t want a lot of traffic coming through the home from Thanksgiving through the New Year due to visiting relatives, events planned such as parties at the home, the presence of gifts and concerns over theft, etc.  They may also be worried about rainy weather and carpets getting soiled.

At the same time, though, during the holidays many of us make our homes warm, bright and inviting, particularly if we decorate for Christmas, Thanksgiving, Hanukkah, etc.  Even the smells can do wonders: gingerbread cookies, Christmas trees, hot mulled wine…. With family and friends coming to visit, we tend to “deck the halls” and make our houses really feel like homes.  For many condos, townhouses and houses, during the holidays these homes really show at their best. (more…)

Each year, Inman News sponsors a “people’s choice” voting for the most influential person in real estate.  Inman nominates 100 strong candidates but voters may also write in someone not listed.  This week, I was very deeply honored to have been included on such a prestigious list of real estate leaders nationwide, and I’d be thrilled if you would consider voting for me.

Where to vote:  follow this link and the fields for entering your desired winner’s name and info will be about 20% of the way down (midway through the article and just after a large ad) – deadline is Dec 1, 2011:

http://www.inman.com/news/2011/11/2/2011-peoples-choice-real-estates-most-influential

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