A client of mine sent me the link to this video created by Kris Berg of San Diego Castles.  It is a hilarious look at the realty of most REO home purchases.   FYI, if you need a savvy agent in the San Diego area who also happens to have a fabulous sense of humor, call on Kris Berg.

I paid $1,400,000 and I need $1,650,000

Whenever I go over a  home pricing analysis with a seller, I ask them what they think their home should be listed at and why.  Invariably, their answer comes back to what they paid for the home, what they put into the home (upgrades, remodeling etc.) or what they need to get out of the sale in order to get to where they want to be.  I call this “needs” based pricing.  I need to get “X” amount because I paid “Y” and I need “X+some amount” to get to my next place.

In an ideal world this would be great.  The value of the home always go up and it always sells for more.  However, our recent real estate market has exposed the flaws in this thinking.  If you bought your home 2 years ago, it is worth less today.  It’s unfortunate, but it’s where our market is at.  

When sellers want to price their home based on need versus market value, they invariably overprice the home which results in a home that is likely not to sell.  Should it sell, it is only after numerous price reductions.  The end result is the seller nets much less than they could have if the property was correctly priced in the first place. 

Remember, the market value for any property is what a willing and able buyer will pay for the house given that it has had proper exposure to the market.   Pricing a property based on what the seller wants or “needs” is a bad and costly home pricing strategy.

Should you have questions about pricing your home to sell in any market, please contact me directly at 650 917-4250 for a confidential analysis.

While strolling through the downtown, take in the window art.  The window art was created by some of our local 4th through 8th grade students for the 46th annual Halloween Window Painting contest. Click here to see some art from Halloween’s past.

From 6:30 p.m. – 8:30 p.m., First Baptist Church of Los Altos will be having its annual Family Fun Night. All ages are welcome and the event will have bounce houses, game booths, pumpkin carving, trick-car-treating, nachos, popcorn and more. The church requests that those attending refraim from wearing gruesome masks or scary costumes.

On Saturday the 31st from 11:30 – 2:30 p.m. at Rancho Shopping Center there will be a trick or treat event and a display of Halloween art created by local Kindergarten -3rd graders.

As always, friends and clients are invited to stop by our home and enjoy some hot cocoa, cider or wine.  The fire pit will be going and there will be plenty for all. 

Enjoy a fun and safe Halloween!

In addition to to recycling e-waste, paper shredding services will be available. Coldwell Banker will take up to two boxes of paper for shredding.  The shredding service will be available from 10:00 a.m.- 2:00 p.m.

Here is the location of my office: 161 S. San Antonio Road, Los Altos

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In the past, an appraiser would note in his/her appraisal that any personal property included in the purchase does not materially affect the property’s value and the loan would fund.  However, some lenders have recently changed this practice.

Personal property becomes part of the contract in Paragraph 4 of the PRDS Real Estate Purchase Contract.  The most common type of personal property asked for is kitchen appliances that are not built-in (ie. refrigerator, washer, dryer).  

The result of this recent change is that it creates a catch-22 for the buyer as well as an unwanted issue for the seller just prior to close of escrow  The buyer should include personal property in the contract, but by writing it into paragraph 4 of the contract, a Lender may not fund the loan.  How does a buyer retain the personal property and get the loan to fund?

In short, the best course of action is to check with your lender about any potential red flags prior to writing the purchase contract.

Note:  I am not an attorney nor do I play one on T.V.  Should you need specific legal counsel on your individual situation, see someone who is an attorney specializing in real estate law.

If you have a favorite “off street” location that you think is worth exploring, you can make submissions here. 

I submitted a recommendation for the Street Views trike to visit Rancho San Antonio.  Can you see Google’s cyclist climbing up the PG&E trail?  On the other-hand maybe walking the trike will work as well.

I took several photos of the damage (see below):

When I was checking for homes for sale in Los Altos, I noticed a property that had been on the market for over two years.  Yes, 2 years.  Wow!

Since the average days on the market in Los altos has ranged from 30-60 days over the last 12 years, anything listed longer than 120 days could be considered a stale listing.  This house has been on the market an unbelievable 12 times the average days on the market (DOM).  Hello, wake up, earth to Houston, we have a problem. 

FYI: the average DOM is the sum of the days on the market (DOM) for sold/listed properties divided by the count of sold/listed properties. 

Buyers assume two things about stale listings; the seller is desperate resulting in a better deal for the buyer and/or there must be something seriously wrong with the home.  Both of these assumptions may be wrong, but given evidence to the contrary, what would you think?

Is this a bad house?  Could it be the marketing/pricing of the home?  Or a combination of both?

Let’s start with the house.  It was a new construction (decent quality and floorplan) home in an average location.  When it hit the market 2 years ago, it was priced at the top end of the market (seller’s second mistake).

Was the house overpriced?  Clearly. 

Was the seller unmotivated/stubborn and/or “just testing the market?”  In the beginning any of these could have been the case.  However, after two years and a price drop of almost 1/3 the original list price, my guess is that the seller might be more motivated.   Hum, given the option of either selling it or losing it to the bank, I would choose to sell it.

Was the property hard to show?  No, it has been vacant for most of the time.

How has the home been exposed to the Internet?  Outside of the first 2 months, the home’s MLS profile had no photos and/or virtual tour for almost a year.  Since then it has had photos and a virtual tour.  I “Googled” the property address and found little web exposure other than what the MLS produces via realtor IDX solutions and real estate aggregators.  The fourth listing agent created a dedicated web page for the property.

Was the offer of commission to the cooperating broker too low?  Maybe.  At 2.5% (note, all commissions are negotiable), some brokers may not show the property.

What affect has our down real estate market had on this property?  This one is tricky.  When the home first hit the market, the market was quite active.  However as time progressed, the market got worse.  This house has chased the market down (and then some).  That is why it is extremely important to price the property correctly the first time.

Currently there are 80 single family homes for sale in Los Altos.  27 properties have been on the market a minimum of 120 days, 11 have been on the market a minimum of 200 days and 4 have been on the market for over 1 year.  If you’re one these “seasoned” listings, it’s time to get serious about whether you want to sell or not.  If your a buyer, you may have a chance to make a great deal.

My morning bike ride took me to Crystal Springs Reservour. When I got
there, the fog had mostly lifted.

Habitat for Humanity’s Neighborhood Revitalization Program is a partnership with the city of Menlo Park where bank-owned homes are acquired, rehabilitated and sold to Habitat’s partner families.  Click here for an overview of the program (PDF).  It appears to be a great program that addresses a multiple of issues; creating affordable housing, reducing the glut of foreclosure properties in East Menlo Park, and revitalizing blighted neighborhoods destabilized by the foreclosure crisis.

Our Menlo Park Build

There were 11 of us from the Coldwell Banker – Los Altos office that participated in working at three different home sites.  At one house, 4 of us disposed of the remnants of two structures and put the debris in a 40 foot dumpster.  The last 2 hours, we built a fence.  At the other two homes, installation of interior sheet rock (tape and texture) was done as well as one home’s exterior was painted.  As an office we put in about 40 man hours and had a blast doing it.

At break it was nice to talk with the “regulars” (retired folks who volunteer for a living).  I also had a good conversation with a fellow agent who had not volunteered before.  She really had a good time and assures me that she’ll do another. 

If you haven’t done a Habitat build, I highly recommend it.  It’s actually fun, you meet great people and you learn a little about construction as well.  Also, if you want to get more information, Habitat Silicon Valley is celebrating it’s 50th home built with a dedication on October 3rd.  Click here for details.

I’ve posted a couple photos form the day below.  Enjoy!

Our Habitat for Humanity build site.

Even I can build a fence.

Our office (well, most of them) volunteers.