Stop listening to the national news, it will only guarantee that you will not get the property you want because you will ignore the advice that your agent gives you on your local market. Forget everything you hear on the news about this being a buyer’s market, the Silicon Valley is not like other markets.
In the Silicon Valley it is now a seller’s market for most markets. The seller has their pick of offers and they can cherry pick for the best terms and best price.
Strategies to win the offer
Go in at your best and final price. When sellers get as many offers as they are getting right now there usually will not be counter offers. Do not lose the house you love trying to save a couple of thousand dollars. Do not follow Suze Orman's advice on never paying more than 80% of the list price on a condo. Suze does not know this market; her advice might be sound in another market. If you want the winning offer please read the first sentence of this blog again.
You cannot take more than a week to remove property contingencies, if you even have property contingencies. If the seller has already done the inspections using a reputable inspector you may want to consider not having any other inspections. Review the inspection findings carefully and if you have questions about the findings in the inspections have a qualified contractor review them with you on the property. You may also consider not having an appraisal contingency if you have the cash to cover the difference in the appraised value of the property and purchase price.
Before you even start looking for a property make sure you are pre-qualified for a loan and have proof of funds in the bank. Your offer will be ignored without it.
Be open to properties that need a little love and affection. Anyone can fall in love with a property that has been staged to sell. In this market you will pay a heavy premium for the staged move in ready property. Look for a property with good bones but that needs a little cosmetic updating. Educate yourself about the comparable costs of a kitchen or bathroom refresh.
Paint and new carpet are relatively inexpensive updates and many buyers cannot see past green shag carpeting and orange faux paint. Watch every HGTV episode you can on getting a house ready to sell so you can see how easy it is to update a house with paint, carpet and few strategically placed new door handles.
Last but not least, be ready to look at property the MINUTE it hits the market, if you can only see property on Saturday afternoon from 3 pm to 5 pm you will remain a renter for the foreseeable future.
If you have any questions about other deal winning strategies I use with my clients please feel free to contact me.
Happy House Hunting!
Showing posts with label silicon valley real estate. Show all posts
Showing posts with label silicon valley real estate. Show all posts
Monday, March 19, 2012
Saturday, February 18, 2012
Helping my clients understand Zillow's Numbers
I love Zillow, this blog post is not a Zillow bash. I am trying to help my clients understand Zillow's numbers.
I have been a Premier Agent with Zillow for over a year and I have met some amazing clients through Zillow.
I was a huge Zillow user before I became a real estate agent. I like statistical data, I am a numbers driven person and so are 90% plus of the clients I work with. However, some times the Zillow numbers are hard to understand and they lead to more questions than answers. My clients ask me all the time about why the Zestimate is so different than the list price on some homes here in Silicon Valley? I thought I would answer the question.
There are two main issues that cause so much confusion on a Zestimate in Silicon Valley, the small sample size and the diverse housing stock.
For example, on average in any given year only about 350 houses sell in Mountain View, CA. So this means in any given month less than 30 houses are sold in Mountain View, CA. On top of that Mountain View, CA has several very distinct neighborhoods and the price you would pay for a similar house in one neighborhood verses another neighborhood varies greatly. So you may find yourself with only 3 or 4 houses selling within any one year that are really compare to yours. But Zillow does not "know" which houses sold are really the ones comparable to yours, they know what sold next door or down the block. Finding true comparable homes in Silicon Valley is sometimes more art than science.
I have engaged in many an art/science project to help my clients understand the right price to offer on a property or the right price to list a property. The Zestimate is good to know especially as the seller as it can impact the offers you receive from a buyer. If you are a buyer please work with your agent on a price and do not get caught up in the Zestimate of the property as being the market price.
What Zillow knows is that your neighbor next door sold her house for $523,000 and another house around the corner sold for 1.8M last month. If these are the only two houses that sell in your neighborhood they can become part of the basis for the Zillow Estimate of your home, even if they are nothing like your home. The sale of the higher end property is probably going to increase your Zillow estimate, which can make you feel really good that your property values have increased. However, when the next two properties to sell in your neighborhood sell for $624,000 and $567,000 you are left wondering why your Zillow estimate went down just a month later.
When you have very small data samples the data can fluctuate very rapidly and over/under value your property very quickly. At a zip code or city level Zillow does a great job of reflecting the price trends here in Silicon Valley. It just does not have enough data to accurately estimate most homes in the Silicon Valley. The data samples are too small and too infrequent. This statistical sample issue is only made worse with the wide variance of housing stock in any one neighborhood.
Unlike many areas in the country, the Silicon Valley does not have large developments of recently built homes that are very similar in size and amenities. Most of the large development projects happened in the 1950's to the 1970's here. Many of these houses have been replaced, added onto and or remodeled in the years since they were built. A few of them have not been touched since the day they were built in 1958. I recently posted on Facebook a kitchen in an Eichler that had never been updated! Of course this untouched Eichler sits in a sea of rebuilt newer homes. The Zestimate for this Eichler is not in line with the true value of the property as a potential lot not a home. Sorry in advance to the rabid Eichler fans that I think this is a tear down, not a restoration project. Please I have owned an Eichler, I know when to let go.
If you go to Zillow and look up the accuracy of their Zestimate it explains very well about their estimation process but it seems that very few people bother to read this page:-)
http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
I have been a Premier Agent with Zillow for over a year and I have met some amazing clients through Zillow.
I was a huge Zillow user before I became a real estate agent. I like statistical data, I am a numbers driven person and so are 90% plus of the clients I work with. However, some times the Zillow numbers are hard to understand and they lead to more questions than answers. My clients ask me all the time about why the Zestimate is so different than the list price on some homes here in Silicon Valley? I thought I would answer the question.
There are two main issues that cause so much confusion on a Zestimate in Silicon Valley, the small sample size and the diverse housing stock.
For example, on average in any given year only about 350 houses sell in Mountain View, CA. So this means in any given month less than 30 houses are sold in Mountain View, CA. On top of that Mountain View, CA has several very distinct neighborhoods and the price you would pay for a similar house in one neighborhood verses another neighborhood varies greatly. So you may find yourself with only 3 or 4 houses selling within any one year that are really compare to yours. But Zillow does not "know" which houses sold are really the ones comparable to yours, they know what sold next door or down the block. Finding true comparable homes in Silicon Valley is sometimes more art than science.
I have engaged in many an art/science project to help my clients understand the right price to offer on a property or the right price to list a property. The Zestimate is good to know especially as the seller as it can impact the offers you receive from a buyer. If you are a buyer please work with your agent on a price and do not get caught up in the Zestimate of the property as being the market price.
What Zillow knows is that your neighbor next door sold her house for $523,000 and another house around the corner sold for 1.8M last month. If these are the only two houses that sell in your neighborhood they can become part of the basis for the Zillow Estimate of your home, even if they are nothing like your home. The sale of the higher end property is probably going to increase your Zillow estimate, which can make you feel really good that your property values have increased. However, when the next two properties to sell in your neighborhood sell for $624,000 and $567,000 you are left wondering why your Zillow estimate went down just a month later.
When you have very small data samples the data can fluctuate very rapidly and over/under value your property very quickly. At a zip code or city level Zillow does a great job of reflecting the price trends here in Silicon Valley. It just does not have enough data to accurately estimate most homes in the Silicon Valley. The data samples are too small and too infrequent. This statistical sample issue is only made worse with the wide variance of housing stock in any one neighborhood.
Unlike many areas in the country, the Silicon Valley does not have large developments of recently built homes that are very similar in size and amenities. Most of the large development projects happened in the 1950's to the 1970's here. Many of these houses have been replaced, added onto and or remodeled in the years since they were built. A few of them have not been touched since the day they were built in 1958. I recently posted on Facebook a kitchen in an Eichler that had never been updated! Of course this untouched Eichler sits in a sea of rebuilt newer homes. The Zestimate for this Eichler is not in line with the true value of the property as a potential lot not a home. Sorry in advance to the rabid Eichler fans that I think this is a tear down, not a restoration project. Please I have owned an Eichler, I know when to let go.
If you go to Zillow and look up the accuracy of their Zestimate it explains very well about their estimation process but it seems that very few people bother to read this page:-)
http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
Wednesday, March 31, 2010
How I come up with the concept of a Lifestyle Neighborhood
I came up with the concept of a lifestyle neighborhood as a way to describe the type of neighborhoods my clients were looking for. My clients were telling me that they needed to have access to a variety of amenities and that they preferred to have these amenities within walking distance. I am finding that more and more people are concerned with their carbon footprint and that they want to have the ability to get around as much as possible without getting in a car. They want a neighborhood that supports their lifestyle. So I coined the term "Lifestyle Neighborhood" to capture what my clients were looking for.
Many of my clients are professionals who work from home and because they spend more time at home they want amenities that are in the neighborhood. Many work in a virtual global world and they take breaks in their day as they get an opportunity. Their day can start in the early morning and very often ends late at night. Every client is different but common desires are a park close by to enjoy during the day, a virtual office space in a friendly neighborhood coffee shop, and a grocery store or at least a farmer's market that they can walk to. They also desire other neighborhood amenities such as a café, a dry cleaner and hardware store. They also want the option of using public transportation and want to walk to public transportation.
My clients vary in age and background but they all seem to agree that a neighborhood that supports their lifestyle is important. One of the great things about Silicon Valley is that it has so many wonderful lifestyle neighborhoods at different price points and with multiple housing types. Almost every city in Silicon Valley is redeveloping their downtown area and creating neighborhoods that support various lifestyles. I will highlight some of my favorite "Lifestyle Neighborhoods" here in Silicon Valley in future blog posts.
Many of my clients are professionals who work from home and because they spend more time at home they want amenities that are in the neighborhood. Many work in a virtual global world and they take breaks in their day as they get an opportunity. Their day can start in the early morning and very often ends late at night. Every client is different but common desires are a park close by to enjoy during the day, a virtual office space in a friendly neighborhood coffee shop, and a grocery store or at least a farmer's market that they can walk to. They also desire other neighborhood amenities such as a café, a dry cleaner and hardware store. They also want the option of using public transportation and want to walk to public transportation.
My clients vary in age and background but they all seem to agree that a neighborhood that supports their lifestyle is important. One of the great things about Silicon Valley is that it has so many wonderful lifestyle neighborhoods at different price points and with multiple housing types. Almost every city in Silicon Valley is redeveloping their downtown area and creating neighborhoods that support various lifestyles. I will highlight some of my favorite "Lifestyle Neighborhoods" here in Silicon Valley in future blog posts.
Friday, February 5, 2010
Making Sense of Silicon Valley Real Estate News in the Newspaper
There is an article today in the San Jose Mercury News in the Business Section with the headline: "Home sales of $1 million or more fall from 2008"
http://www.mercurynews.com/search/ci_14335062?IADID=Search-www.mercurynews.com-www.mercurynews.com
First I am going to digress for a moment.
I have a mathematics degree with an emphasis in statistics and probability theory. I know how easy it is to create meaningless statistics. I am a true believer in the quote "Lies, Damned Lies and Statistics" I am not saying that the numbers are not correct in this article but I think they fail to tell you much about the market.
First, if you can remember back to 2008, most of us spent the first 8 months or so of 2008 completely ignorant of the banking crisis coming our way. We were busy living our lives and that included investing in expensive real estate in Silicon Valley. Then after September of 2008 house buying stopped almost completely and it was extremely difficult to get a Jumbo loan.
In 2009 anyone that did not need to sell a house was not selling. The banks were flooding the market with bank-owned property. Buyers were tempted by the great deals but many were also too scared to jump in for most of 2009. However, those who jumped in to the market in early 2009 and bought had an opportunity to get some of those great deals you have read about in the papers. Unfortunately, those deals are gone.
Then a funny thing happened in the fall of 2009, the banks got better at managing their inventory and buyers started to feel more optimistic. They were sensing that the market had bottomed in Silicon Valley and they were wading back in. I kept asking almost everyone that I met at my open houses in the fall of 2009 “Why are you looking to buy?”
The answer I got over and over again was so Silicon Valley....
"If I still have a job now I am probably going to continue to have one and I do not want to miss out on this great market"
To summarize what the numbers are telling me.
In 2008 people bought Million Dollar homes over a 9 month period without knowing about the banking crisis and with mortgages being readily available. In 2009, most bought Million Dollar homes in the later part of the year as mortgages became more available again and inventory became more available. If there are less months of buying in one year (2009) versus the other year (2008) the numbers of houses sold will be lower.
Los Altos, Los Altos Hills and Palo Alto went against the trend and more homes were bought in 2009 than 2008. Why is the topic of another blog entry.
http://www.mercurynews.com/search/ci_14335062?IADID=Search-www.mercurynews.com-www.mercurynews.com
First I am going to digress for a moment.
I have a mathematics degree with an emphasis in statistics and probability theory. I know how easy it is to create meaningless statistics. I am a true believer in the quote "Lies, Damned Lies and Statistics" I am not saying that the numbers are not correct in this article but I think they fail to tell you much about the market.
First, if you can remember back to 2008, most of us spent the first 8 months or so of 2008 completely ignorant of the banking crisis coming our way. We were busy living our lives and that included investing in expensive real estate in Silicon Valley. Then after September of 2008 house buying stopped almost completely and it was extremely difficult to get a Jumbo loan.
In 2009 anyone that did not need to sell a house was not selling. The banks were flooding the market with bank-owned property. Buyers were tempted by the great deals but many were also too scared to jump in for most of 2009. However, those who jumped in to the market in early 2009 and bought had an opportunity to get some of those great deals you have read about in the papers. Unfortunately, those deals are gone.
Then a funny thing happened in the fall of 2009, the banks got better at managing their inventory and buyers started to feel more optimistic. They were sensing that the market had bottomed in Silicon Valley and they were wading back in. I kept asking almost everyone that I met at my open houses in the fall of 2009 “Why are you looking to buy?”
The answer I got over and over again was so Silicon Valley....
"If I still have a job now I am probably going to continue to have one and I do not want to miss out on this great market"
To summarize what the numbers are telling me.
In 2008 people bought Million Dollar homes over a 9 month period without knowing about the banking crisis and with mortgages being readily available. In 2009, most bought Million Dollar homes in the later part of the year as mortgages became more available again and inventory became more available. If there are less months of buying in one year (2009) versus the other year (2008) the numbers of houses sold will be lower.
Los Altos, Los Altos Hills and Palo Alto went against the trend and more homes were bought in 2009 than 2008. Why is the topic of another blog entry.
Monday, September 28, 2009
What Real Estate Broker do I go with?
Being a real estate agent can be described as an entrepreneurial contract employee. You are in charge of your business but you can utilize the marketing and branding power of the real estate broker you work for to help increase your business.
My first instincts are that I want to find a real estate broker that has a good mentoring program and name brand recognition. However, I also realized that there are several boutique real estate brokers that only specialize in serving the silicon valley real estate market. Which real estate broker makes the most sense for me?
This decision feels so much like the Titian of Industry vs Start-up decision I have had to make so many times in my high tech career. There is something very satisfying at saying I work at Company A, Titian of Industry. Name recognition is great and you get to use their name as part of your branding. But it is also very fun to work for the small and nimble company as well.
The big difference between real estate and high tech is that real estate is a local market and the goal is to create the "Brand of me, Real Estate Specialist" that transcends the name of the real estate broker you work for.
Small Boutique Silicon Valley focused or National Brand Real Estate Broker? Which is the best for me?
So I am going to make this decision based on the same criteria I would make if I was going to my next high tech company....
At the end of they day it is the people you work with directly that matter more than the company you work for. So lucky for me I found great people at a name brand company. I get to have both!
My first instincts are that I want to find a real estate broker that has a good mentoring program and name brand recognition. However, I also realized that there are several boutique real estate brokers that only specialize in serving the silicon valley real estate market. Which real estate broker makes the most sense for me?
This decision feels so much like the Titian of Industry vs Start-up decision I have had to make so many times in my high tech career. There is something very satisfying at saying I work at Company A, Titian of Industry. Name recognition is great and you get to use their name as part of your branding. But it is also very fun to work for the small and nimble company as well.
The big difference between real estate and high tech is that real estate is a local market and the goal is to create the "Brand of me, Real Estate Specialist" that transcends the name of the real estate broker you work for.
Small Boutique Silicon Valley focused or National Brand Real Estate Broker? Which is the best for me?
So I am going to make this decision based on the same criteria I would make if I was going to my next high tech company....
At the end of they day it is the people you work with directly that matter more than the company you work for. So lucky for me I found great people at a name brand company. I get to have both!
Tuesday, September 15, 2009
My New Blog!
I want to thank all of you who have encouraged me to continue or to restart my blog. It is a very nice thing to know that others at least occasionally read what I am writing.
I have decided the format of this new blog will be about real estate and also about lifestyle. I will update at least once a week anything that I find that I think will be interesting about what is happening in real estate; locally and nationally.
I will also highlight a business that I think could be of interest to your lifestyle. Some businesses are real estate oriented and others will just improve the quality of your life. We all like to have someone recommend a service to us instead of relying on a Google Search or an old school Yellow Pages Ad.
I am also going to include a recipe a week. As many of you know that read my original blog; cooking is extremely important to my lifestyle. I wanted to have a forum to share recipes that my family and friends love and that have added a richness to our lives.
I see this blog as a way to stay connected with so many of the wonderful people I have know through out the years and as a way to meet new people as well.
I have decided the format of this new blog will be about real estate and also about lifestyle. I will update at least once a week anything that I find that I think will be interesting about what is happening in real estate; locally and nationally.
I will also highlight a business that I think could be of interest to your lifestyle. Some businesses are real estate oriented and others will just improve the quality of your life. We all like to have someone recommend a service to us instead of relying on a Google Search or an old school Yellow Pages Ad.
I am also going to include a recipe a week. As many of you know that read my original blog; cooking is extremely important to my lifestyle. I wanted to have a forum to share recipes that my family and friends love and that have added a richness to our lives.
I see this blog as a way to stay connected with so many of the wonderful people I have know through out the years and as a way to meet new people as well.
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