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Buyer Mentality vs. Lowball Reality

By Ed Gory | October 14th, 2010 1 Comment

Lowball offers rarely, if ever, get accepted.

There, I said it.

Almost everything you read in the news these days about the housing market points to it being a Buyer’s Market.  That is true to some extent, but not 100% of the time. There are neighborhoods out there that are exceptions to the rule, and often still get multiple offers (i.e. Palo Alto, Los Altos, parts of San Carlos & Redwood City).

But back to the notion of “lowball offers.” In my opinion, the success of a lowball offer is a bit of a myth.

From a SELLERS perspective

The current buyer mentality as a whole is fueled by what buyers read in the news, and the economic malaise in general. That mentality will not, I must repeat, will not change anytime soon.  So unless you’re selling a home in one of those rare “hot” neighborhoods, here’s the expectation you should have — buyers are going to come in and lowball you. Negotiating the best possible price is what I strive to do for my sellers every time (and I would think that nearly all listing agents have this fiduciary objective) — there’s no way I’d advise a seller to accept a lowball offer on the first round.  When buyers come into my listings and ask, “How low will they go?” my pat answer is, “Well, put something in writing and you’re sure to find out.”  Any good listing agent will not show their hand to how low their seller would go.

From a BUYER perspective

Now I’ll put my Buyer’s Agent hat on.

For a home that’s been on the market a LONG time (relatively speaking, of course), sure, the odds are that the home will sell for less than its asking price. How MUCH less really depends on the seller — since every seller’s situation is unique, I really don’t know “how low” they will go until I do a little further investigation with the sellers’ agent.  Even then, the sellers’ agent will rarely tell you exactly how low the sellers will go — that breaches his fiduciary duty to the sellers.  That agent’s duty is to get the home sold for the best possible price relative to all the other market conditions.

So, if you come in with a lowball offer (again, lowball being a relative term), the expectation you should ALWAYS have is that you’re going to get a counter-offer from the sellers.  Yes, sellers are “motivated,” but being motivated does NOT mean “desperate.”

Step 1: Make a lowball offer.   Step 2: Receive a counter offer from the seller.  It’s gonna happen, like it or not.

Look, here’s the reality: yes, buyers are generally in the driver’s seat these days, but, many sellers would rather wait it out, or take their home off the market before they accept a lowball offer.  Making a lowball offer, while it is a start to putting something in writing on the table, rarely meets with success.  Save your time and your efforts, and instead of getting your hopes up for getting “the deal of the century,” make a reasonable offer instead — the more fair/close-to-asking your offer price is, the less likely you are to get a counter-offer from the sellers.

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Intero Insider: Foreclosures Get a Real Rescue

By Gino Blefari | September 15th, 2010 0 Comments

Some good news came on the housing scene the other day: federal housing officials announced nearly $1 billion in funding to buy up foreclosed properties. The money will go to state and local governments so they can purchase, redevelop or demolish these properties.

Foreclosures have become the face of this recession. They can be like a disease that whisks in and infects an entire neighborhood or metropolitan area. The anti-American Dream, foreclosing on a house symbolizes rock bottom for a family’s financial situation.

But the new cash infusion should help to turn it around. Foreclosure is bad, but it can also symbolize a new beginning. If the funds can help state and local governments to transform foreclosures into much-needed affordable housing and rentals, then ultimately it’s better for the community, the local housing markets and local economies.

So far, the money seems to be headed in the right direction. Nearly half of the $970 million will go to the states hit hardest by foreclosures: Arizona, California, Florida and Nevada. Another big chunk is going to states in the Rust Belt, which have also been hit hard by foreclosure and tremendous job loss.

The government said funds can be used to buy property, demolish or rehab abandoned properties, and provide down payment and closing cost assistance to low-to moderate-income buyers, which should help to pump some life into this market segment.

I think it’s a much-needed boost and money well spent. We’ve said all along that there are opportunities in this market despite the gloomy numbers and forecasts. Here’s an opportunity for the state and local governments not only to create a better housing situation for some residents, but to create jobs associated with demolishing and rebuilding, boost confidence and improve their communities.

That’s real forward motion!

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San Carlos’ Thorny Artificial Turf Issue

By Ed Gory | August 24th, 2010 0 Comments

There’s a polarizing issue in the Highlands Park neighborhood of San Carlos these days, and it has to do with the potential to install artificial turf at the neighboring park.

How does this affect homes and home values? Since everything under the sun has to be disclosed when selling a house, here’s a simplified after-effect of installing artificial turf in a public park:

  1. Turf on athletic fields at public park  = Year round sports instead of seasonal
  2. Year round sports = Constant soccer, baseball, basketball games going on year round
  3. Constant games going on = Lots of cars parking on streets in front of homes
  4. Lots of cars parking on streets = Impact on ‘peace and quiet’ of neighborhood
  5. No peace and quiet = Perceived value of homes goes down
  6. Home values going down = Local residents do not want artificial turf

In the SJ Merc the other day was this article.  Here are some of the salient highlights from the article:

With San Carlos poised to start installing artificial turf at Highlands Park today, a group of residents who sued to block the project say the city is taking a big risk by breaking ground before a judge has ruled on the lawsuit.

They say the city shouldn’t start the project until a San Mateo County Superior Court judge weighs in on the lawsuit filed by Save San Carlos Parks, which argues the city didn’t properly review the new field’s potential environmental effects on health and traffic. Judge Marie Weiner is expected to rule by Aug. 25.

If Weiner decides the city must do further environmental work, it will have to pause construction and leave the park unusable and in a state of disrepair indefinitely, said Greg Harris, a member of the residents’ group. He said it’s worth waiting another two weeks for a ruling on a project that was conceived a decade ago.

City officials counter that they could take a financial hit if they don’t proceed with installing turf, which has been done without controversy in other Peninsula cities but has been one of the hottest topics in San Carlos for years.

Officials say the $1.7 million bid from Interstate Grading and Paving, which the city council accepted in February, is an exceptionally low price due to a job-hungry construction industry and an Italian turf manufacturer who is offering a discount to break into the American market.

Harris dismissed the cost argument, saying it’s possible the city could get the same bid or an even lower one if it advertises the project again after the judge’s decision.

The city plans to fence off the 3.5-acre lower athletic field at Highlands Park today for site preparation work. Excavation and grading work will start next week, said Public Works Director Robert Weil. If all goes well, the project will be finished by the end of the year.

Weil acknowledged that the park will be unusable if the city has to pause construction to do further environmental studies, which could take months, but he said officials will ensure the park doesn’t pose a hazard.

Proponents say the artificial surface will lower maintenance costs and allow the field to be used year-round. The grass fields, on the other hand, must periodically be closed so they can recover from heavy use.

But opponents have said the extra use allowed by the new surface will bring more traffic to the neighborhood. They also had objected to the use of rubber pellets between the grass blades, though the city has since decided to use an organic infill instead to address those concerns.

“We’re not going to delay a project that will benefit thousands of people because a small neighborhood group has filed a lawsuit against us,” Klein said.

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Intero Insider: Housing News a Mixed Bag

By Gino Blefari | August 3rd, 2010 0 Comments

The best way to sum up housing market news right now is: the data show things are improving, but remain at not-so-great levels. Sorry to break it to you this way, but at least there are some positives.

Let’s dig in:

  • New home sales were up 23.6 percent in June, according to Census Bureau statistics. And while this was a great increase from May, the rate was 16.7 percent below the level in June 2009.
  • Also, home prices rose in May, according to the latest S&P/Case-Shiller 10-city and 20-city home prices indexes. Prices in the 10-city index increased 1.2 percent and prices in the 20-city index increased 1.3 percent. Compared with a year earlier, the 10-city index rose 5.4 percent and the 20-city reading increased 4.6 percent.
  • Existing home sales slowed 5.1 percent in June from May, according to figures reported by the National Association of Realtors. It was the second month of decline for existing sales, which many say was partly due to the expiration of the housing tax credit (contracts had to be in place by April 30 to qualify). But the June sales figures were up 9.8 percent from June 2009. NAR also said the inventories were up and prices were stable.

Now, the fun part: what does all this mean?

Well, first let’s not overlook the fact that there are indeed sales happening. So even if you’re of the “sky is falling” mind, you can’t deny that people are still buying and selling homes.

Second, we all pretty much knew that home sales would dip in the months after the tax credit expired. While the tax credit may not have created transactions out of thin air, it certainly put a fire under a great number of buyers to move quickly. Now the market doesn’t have those buyers who, under normal circumstances, may have bought in the summer instead of the spring.

Third, the fact that prices held steady and showed some increase is a good sign.

The reality here is that the housing market moves on. Life events will continue to drive transactions. Sure, times are tough for home sellers and those of us who work in this industry. But we at Intero actually see these times as a great opportunity to succeed. There are some great deals out there for today’s buyers and investors. Borrowing conditions are fantastic for those who qualify.

These are times when innovation really does stand out and make a difference.

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Move over Los Gatos – Morgan Hill: Quaint – Yet Progressive

By Ralph Chellino | February 26th, 2010 0 Comments

3rdstreet250Over the next five years downtown Morgan Hill will be undergoing significant changes to become more vibrant and active – to serve as the true hub of our community.  The Morgan Hill Redevelopment Agency will invest $40 million in downtown to improve parking, lighting, landscaping, infrastructure (water/sewer/utility undergrounding), and expand public art and cultural activities.

The first major project is the Third Street Promenade.  Over the last four months, Third Street has been transformed into a pedestrian-friendly thoroughfare between Monterey and Depot Streets, featuring:

  • wide sidewalks
  • decorative street furniture & art
  • pedestrian scaled lighting
  • street trees and landscaping.

It is envisioned that Third Street will become a place where Morgan Hill residents and those in surrounding communities will want to come to for dining, shopping, mingling, relaxing and enjoyment of outdoor entertainment.

What? Los Gatos without the traffic and congestion?  Come visit us and see for yourself!

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Urban Legend Hits the Real Estate World

By Ed Gory | December 21st, 2009 0 Comments

Be forewarned — no, this is not about kidney harvesting, Nigerian Lottery winnings, or Bill Gates giving everyone lots of money for forwarding an email — there is an email making the rounds titled “HR 2454: CAP AND TRADE ENERGY BILL”, which purports that new legislation will require all homes to retroactively pass new energy standards before they are sold.

Some even say that all homes will now be required to get a “label” for your house every year, proving that your home meets new energy standards.

This is all patently and unequivocally FALSE. (and you can even check Snopes.com here to doublecheck)

Bottom line, our government is not going to do anything – ANYTHING – that will adversely affect the real estate market, which is absolutely one of the key elements in our ongoing, slow economic recovery. Why do you think they recently overwhelmingly voted to extend the first time buyer $8K tax credit bill, as well as extend the $729K conforming loan limit? They want to encourage people to have more confidence in home ownership.

I also consulted our National Association of Realtors (NAR) position on this, and below is what it said. The most revealing statement, which contradicts this email is that this bill  ”Does not create a federal energy audit requirement for real property”

“The U.S. House of Representatives approved H.R. 2454, the American Clean Energy and Security Act by Reps. Waxman (D-CA) and Markey (D-MA). Following NAR’s long-standing policy to only take a position on legislation, or provisions within legislation that have a direct affect on real estate, NAR worked with our Congressional allies to strip the Energy Bill of provisions that would have adversely affected our industry.

After multiple consultations with the NAR Climate Presidential Advisory Group, the NAR Land Use, Property Rights and Environment Committee, and state associations who had dealt with energy audit legislation at the state level, the Land Use, Property Rights and Environment Committee directed NAR staff to concentrate on the real estate provisions in the bill.  As a result, NAR issued calls for action and made this a talking point for Capitol Hill visits during its recent Midyear meeting.

Overall, REALTORS® succeeded in making a number of positive changes affecting the real estate provisions of the bill. The House-approved bill:

  • Does not create a federal energy audit requirement for real property;
  • Exempts existing homes and buildings from any federal guidelines for new construction energy efficiency information labels.
  • Prohibits the implementation of any labeling during a sales transaction.
  • Leaves the decision to states as to whether to require energy audits, disclosures, etc.
  • Provides property owners with significant financial incentives, matching grants and tools to make property improvements and reduce their energy bills;
  • Prohibits the Environmental Protection Agency from regulating residential and commercial buildings under the Clean Air Act;
  • Eliminated an early proposal to allow citizens to sue over minor climate risks under the Clean Air Act; and Establishes green building incentives for HUD housing, including a loan program for renewable energy, block grants and credit for upgrades in mortgage underwriting.”

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Top 10 Silicon Valley Real Estate Trends for 2009

By Dawn Thomas | December 16th, 2009 0 Comments

As 2009 draws to a close – you’ll soon be reading lots of  top 10 lists for the movers, shakers, and trends of the year and the decade!   In the spirit of being just a little ahead of the crowd, here’s our list of the top Silicon Valley Real Estate trends of 2009:

1. Low Interest Rates – with More Strings –  Interest rates have been low this year, with periodic dips into historic record  ”low” territory.   These great rates, though, come with seemingly ever-changing requirements and conditions.  Selecting a great financing source who can get you great rates AND help you navigate through the process has never been more important.

2. We’ve Got to Keep It Together For Longer – With the changing lending guidelines, it’s been taking longer for properties to close escrow and having a signed purchase contract did not automatically mean a closed escrow in 2009.   Having a black belt negotiator on your real estate team has been critical this year.

3. “Turn Key” is Hotter than Ever – A few years ago – buyers could purchase a property & count on some quick appreciation to pay for a remodel in just a little time.  Now – buyers can’t count on home appreciation to finance a remodel in the near term & are looking for great condition, move-in ready homes to buy  (as if location and condition ever go out of style in the world of real estate!).  On the other hand – for buyers seeking to purchase a property in a high-demand area like Palo Alto or Cupertino – it may pay to look for properties needing some work.  If you can see the potential in a fixer – you may have fewer competing bids from other potential buyers.

4. Buying a Silicon Valley Foreclosure is not as Easy As It Sounds - Some of the busiest agents in any real estate office are the ones listing “Real Estate Owned” or REO properties for the banks.    Buying one of these properties means navigating a maze of bank-specific requirements for making the offer, competing against multiple offers (some properties are getting 20, 30 or even 50 offers), and positioning your offer against “all cash” investors.  Finding a deal & making sure it stays a “good deal” through the process is not for the faint-of-heart!

5. No Shortage of Short Sales – over the course of 2009 – we continued to see properties listed for less than what is owed to the lender(s) – resulting in a short sale requiring lender(s) approval to go through.   We’re starting to see short sale listings where the lender has approved a short listing price – allowing the whole process to go smoother and quicker.

6. The Year of the First-Time Buyer – with more affordable home prices, the First Time Home Buyer Tax Credit, and sweet interest rates – many of the homes sold in 2009 went to first time home buyers.   In the final months of the year – we are starting to see more and more “move up” buyers rousing the mid and higher-end price points.  Welcome!  Please bring friends!   This is a trend we want to see continue & grow in 2010!

7. Deal Hunting in Palo Alto – Where’s the deal on a single family home in Palo Alto for less than $300,000?  The media in 2009 did a fantastic job of painting the picture of real estate in free fall, and we went through a period in the spring where every day brought Internet inquiries looking for the extraordinary deal in Palo Alto.  According to the MLS – the least expensive Palo Alto single family home sold so far in 2009 went for $703,000 for a 67 year old, 703 square foot cottage with foundation issues.

8. Your Home May Have a Bigger Electronic Footprint than You Do - Social media sites like Facebook and Twitter are 2009 Trendsetters above and beyond the world of buying and selling dirt.  In real estate, though,  the savvy home seller now ensures that their Real Estate agent is marketing  their property through multiple Internet channels.    Wouldn’t  you want 30 million visitors at your open house – especially the ones who can’t leave foot prints on your new carpet?

9. Welcome to California! – We are working with an increasing number of clients who are relocating to Silicon Valley for a new job.  It looks like both our job market and our real estate market are picking up!   Welcome!

10. Less to Pick From, More Competition – And finally, in many areas of Silicon Valley – we are seeing fewer homes on the market.    In fact, for Silicon Valley overall – more homes are “pending sale” than are actively for sale.  For buyers – this means that there are fewer homes to consider and more competition to get  your offer accepted. For sellers – it means that there are fewer competing properties.  This sets the stage for an even brighter 2010!

We wish you the best holiday season & look forward to serving you and your referrals in 2010!

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12 Reasons Why It’s Great to be a Dog in Los Altos

By Dawn Thomas | November 15th, 2009 1 Comment

1.  It’s a Great Place for a Walk!

Los Altos is a “walker-friendly” town with miles of quiet residential streets to explore, as well as several great parks. Just remember to bring a flashlight – with the scarcity of street lights in Los Altos, it can be hard to see!

2. A Little Shopping is always Fun
A little exercise can make a dog hungry! Check out the 5 Paw Bakery (315 Main Street)– where they bake such canine culinary confections as birthday cakes, yogurt and carob-dipped cookies and savory biscuits.

3. Coffee and Canines
Catch up with dog and human friends alike at one of the coffee shops in Los Altos. You’ll almost always see at least one dog sharing the love outside Starbucks (296 Main Street & 643 Los Altos Rancho), Peets (367 State Street) and Main Street Café (134 Main Street).

4. Fine Doggie Dining
When it’s time for more than a cup of coffee – enjoy a great meal on a dog-friendly patio.  The staff will even bring a bowl of water for your canine friends!

5. Ouchies Fixed 24 x 7
The Adobe Animal Hospital is open 7 days a week, 24 hours per day, providing regular and emergency vet services for dogs and other pets. From regular preventative check-ups to fast attention during an unexpected emergency – it’s reassuring to be able to go to one place.  Ask someone in Los Altos which vet they use – and chances are – they’ll say Adobe.

6. Buff and Fluff
The staff at the Barking Lot (467 First Street) makes sure that Fido and Princess look sharp for their strolls through the Village. From nail clipping to baths, clips and coifs – this is the place for the latest Los Altos canine look!

7. Hanging out at Home
Some days – it’s great to just hang around home. The median lot size in Los Altos is just about a quarter acre – bigger than the average lot size in Palo Alto and Mountain View.  The kids and the dog need lots of room to romp!

8. Room to Run
Los Altos does not yet have its own dog park – but it is considering working with the City of Cupertino and Santa Clara county to build one. In the meantime- check out the nearby dog parks in Mountain View and Palo Alto  (Mountain
View Shoreline Dog Park) and Palo Alto (Mitchell Dog Park).

9. Need a SPaw Day?
When your pooch needs pampering – it’s time for a short drive to the Pooch Hotel in Sunnyvale. Here, your favorite companion can enjoy the swim facilities, personal trainers, aromatherapy baths, facials, massages, and pawdicures.

10. Certified Canine Design & Construction
John Hammerschmidt of Hammerschmidt Construction in Los Altos jokingly refers to himself as a “Certified Canine Designer”.  Having completed multiple Los Altos remodels with custom canine features,  John is well-versed in designing fido-friendly features including dog washes, dog runs and landscaping, custom breed-specific tiling, and scratch-resistant flooring.

11. Ms. Manners
Does your dog need a visit from Ms. Manners?  Maybe it’s time for obedience classes. Some the best local classes are taught by the Deep Peninsula Dog Training Club at nearby Rengstorff Park.

12. Strut Your Stuff!
Since 1947, the Los Altos Kiwanis Club sponsors the Annual Los Altos Pet Parade on the Saturday following Mother’s Day each year. It features thousands of kids, their pets, and some very creative costumes!

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Holiday Dilemma: Is this a good time to list my home for sale?

By Cindy O'Leary | November 15th, 2009 0 Comments

In these unique, uncertain market conditions, determining the optimum time for the sale of your home can be a confusing task, particularly as the prime selling season of spring and summer wanes. But consider these points if you are thinking of listing your home in the next 30 days:

1. Buyers looking for a home during the winter/holidays are generally more serious in their searches. Often these buyers have a very specific time frame and objective so their motivation is high.
2. The inventory of homes generally declines during the latter part of the year so there could be less competition for your home.
3. By selling now, a seller has the opportunity to be a non-contingent buyer during the spring when the inventory traditionally grows.
4. Some buyers have time constraints and will be highly motivated to purchase before the year’s end.
5. Buyers may have a break from work during the holidays and, consequently, may have more time to shop and preview homes.
6. Holiday decorations can make homes more appealing and attractive.
7. Because of the holidays, you can still be on the market but have the option to restrict showings during the peak holiday times.

No matter what time frame you may choose to list your home, be sure to consult with a qualified Intero Realtor to get sound counseling and advice.

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High Scores in Morgan Hill’s Public Elementary Schools

By Ralph Chellino | October 9th, 2009 0 Comments

mhlogoThe Academic Performance Index (API) is the State of California’s current solution for measuring how schools have performed academically over the past year.  Granted, the system’s formula is anything but perfect – not taking into consideration the number of new less-experienced teachers replacing a growing number of retirees. Or the fact that more “creative” classroom curriculums think outside of the box, not always teaching state prescribed materials.

OK, with that being said, how did Morgan Hill’s public schools stack up?

Of the ten public elementary schools none scored below an API of 723 (1) and five of the ten achieved scores of 794 (1) to over a commendable 801 – 881(4). Terrific!!

Along with extensive city youth recreation programs – including Pony Baseball, Pop Warner Football, soccer, swimming, and SVCA basketball – complimenting our many parks and recreation facilities, our Morgan Hill schools rock too!!

Ask yourself one question:

“How valuable is my kid’s growing up environment?”

If your answer is what mine is Morgan Hill can be “THE” answer!  Raise your children in the wholesome family oriented community of Morgan Hill!  We did and have no regrets and many fond memories.

Where do my kids and their kids (my grandchildren) live?

Morgan Hill, silly!

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