Michael Roberts' Blog -San Jose Homes, Real Estate and Houses for Sale

Can’t wait to get the last quarter data for 2011!

National Home Sale figures showed an 11% increase in October compared to last year.  This was based on homes for sale where a purchase contract was signed in September. I have listed real estate statistics for San Jose and a couple of other areas below. Note that home sales statistics are typically 60 days behind the reporting date. This is due to the time it takes to close an escrow which is currently around 45 days.

San Jose- The median sales price for homes in San Jose CA for Aug 11 to Oct 11 was $390,200 based on over 2,600 home sales. Compared to the same period one year ago, the median home sales price decreased 3.1% and the number of home sales decreased 9%. The “average price per square foot” for San Jose CA was $354, an increase of 20.4% compared to last year. The average listing price forhomes for sale in San Jose CAwas $522,715 for the week ending Nov 23, which represents an increase of 0.3%, or $1,536, compared to the prior week.

Cupertino- 95 homes sales were reported from Aug to October with a median sales price of $900,000. Cupertino CA price per square foot for was $582, an increase of 5.1% compared to the same period last year. Compared to the same period one year ago, the median home sales price decreased 4.3%, or $40,500, and the number of home sales decreased 30.1%. The average listing price for homes for sale in Cupertino CA was $1,180,127 for the week ending Nov 23, which represents an increase of 1.7%. A small increase from last week.

Los Gatos- Compared to the same period one year ago, the median home sales price for Los Gatos Homes decreased 0.1%, or $1,000, and the number of home sales decreased 18.2%. The average price per square foot for Los Gatos CA was way down at $487, a decrease of 11.5% compared to last year. The median sales price for homes in Los Gatos CA for Aug 11 to Oct 11 was $899,000 based on 135 home sales. The average listing price for homes for sale in Los Gatos CA was $1,832,949 for the week ending Nov 23, which represents a decrease of 1.7% compared to last week.

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Almaden Homes for sale

Blossom Valley Homes for sale

TheBlossom Valley homes for sale had a median sales price in ZIP code 95123 in San Jose from Oct 10 to Dec 10 was $382,445 based on 205 sales. Compared to the same period one year ago, the median sales price fo Blossom Valley homes for sale decreased 6.8%, or $27,855, and the number of sales decreased 26.5%. Average price per square foot for Blossom Valley homes for sale was $263, a decrease of 4.4% compared to the same period last year. There are currently 190 resale and new homes in ZIP code 95123 The average listing price for homes for sale in 95123 was $345,285 for the week ending Jan 26, which was unchanged compared to the prior week. Other popular ZIP codes in San Jose include 95125 and 95123, with average listing prices of $710,757 and $345,285.

Cambrian Homes for Sale

Cambrian Park homes for sale in ZIP code 95124 in San Jose had a median sales price, from Oct 10 to Dec 10, of $593,500 based on 149 sales. Compared to the same period one year ago, the median sales price for Cambrian Park homes for sale increased 2.4%, or $13,900, and the number of sales decreased 5.1%. Average price per square foot for homes in 95124 was $373, a decrease of 2.9% compared to the same period last year.  The average listing price for homes for sale in Cambrian Park  (zip code 95124) was $604,981 for the week ending Jan 26, which represents a decrease of 0.6%, or $3,451, compared to the prior week. Popular ZIP codes in San Jose include 95125 and 95123, with average listing prices of $710,757 and $345,285.

Los Gatos Homes for sale

Average price per square foot for homes for sale in Los Gatos CA was $514, a decrease of 1% compared to the same period last year. The median sales price for homes for sale in Los Gatos CA for Oct 10 to Dec 10 was $840,000 based on 158 home sales.  Compared to the same period one year ago, the median home sales price increased 4.5%, or $35,804, and the number of home sales decreased 3.1%.  The average listing price for homes for sale in Los Gatos CA was $2,007,652 for the week ending Jan 26, which represents an increase of 0.4%, or $8,013, compared to the prior week.

San Jose Homes for sale

San Jose homes for sale have an average price per square foot of $291, a decrease of 1.4% compared to the same period last year for San Jose homes for sale. The median sales price for homes for sale in San Jose CA for Oct 10 to Dec 10 was $400,000 based on 2,628 home sales. Compared to the same period one year ago, the median home sales price increased 0%, or $0, and the number of home sales decreased 27.6%.   The average listing price for homes for sale in San Jose CA was $468,834 for the week ending Jan 26, which represents a decrease of 0.1%, or $458, compared to the prior week. Some popular neighborhoods for homes for sale in San Jose include Willow Glen and Evergreen, with average listing prices of, respectively, $662,649 and $678,615.

Willow Glen Homes for sale

The median sales price for homes for sale in Willow Glen, San Jose for Oct 10 to Dec 10 was $550,000 based on 227 sales. Compared to the same period one year ago, the median sales price for Willow Glen homes for sale decreased 10.9%, or $67,000, and the number of sales decreased 23.3%. Average price per square foot for Willow Glen was $377, a decrease of 1.8% compared to the same period last year. The average listing price for homes for sale in Willow Glen was $662,649 for the week ending Jan 26, which represents a decrease of 5%, or $34,711, compared to the prior week.

Myth #1:  Buyers agents want you to pay more to get a higher commission.

Wrong. The value of the home has to meet the lenders appraisal.  If it doesn’t meet the lender’s appraisal the mortgage loan won’t get  approved.  The seller, having now expected a higher price,  will be disappointed having to  accept a lower offer.    Your agent wont get paid and you don’t get the home because the seller becomes uncertain and reluctant.   It is always better to make a reasonable market wise offer that has potential for negotiating, especially if there are multiple offers.

Myth #2:   Listing agents want you to accept any offer quickly so they can get paid.

Wrong. If you are provided a Market Analysis then you should know the current market price.   This puts you in the driver’s seat to consider only those offers that are reasonable.  Most listing agents want you to get the most for your home. That allows them bragging rights to gain more listings.   Simply ask for a new market survey to give you comfort in support of accepting an offer for your home.

Myth #3:  All agents conspire against their buyers/sellers to get a sale.

Wrong. While they are sales persons, they have a fiduciary responsibility to show good care and ”Realtors” abide by a strict code of ethics.   The best agents enjoy the art of negotiation (fighting for their client). It’s in their DNA to win and only win- losing sucks.   However, every industry and market sector have their bad apples and Real Estate is not immune from worms.   Always ask for at least 3 referrals from an agent’s past clients, call them and you will know if your agent really cares about you.

Myth #4:  Foreclosures are the best deals.

Wrong. While buying a foreclosure feels like a great deal they really aren’t.   There are inherent issues with foreclosures that price alone does not overcome.   In today’s volatile market foreclosures are often found in distressed areas.  Location is still the number one factor in home value.  Historically distressed areas reduce the upside potential. If the home is below market now it will likely be below market when you want to sell.    Not to mention the number of potential hidden conditions that are not readily identified or disclosed.   Be sure to have a thorough property inspection from a reputable inspection company, analyze every value factor and consider future upgrade costs that will meet the neighborhood standard.

Myth #5: Making a cash offer is better than one with a mortgage loan.

Wrong. The process of escrow still remains.   While a cash offer can close escrow in a short 21 day period, an offer with lending can close in the same period or within 30 days, typically.   The seller still gets cash in the end so, waiting an extra week or two and sell for a higher price trumps a cash offer.

Myth #6:  Having an Open House will sell your home.

Wrong: Having an open house does not sell your home 99% of the time.    Statistics show that only 1% of homes sold actually sold from  having an open house.    With so many internet sites providing virtual tours and numerous pictures more and more buyers pass on spending the time to visit an open house. An open house does allow all the neighborhood looky loos and wannabe buyers to traipse through your home.   Serious buyers  will call an agent to schedule a private tour.   Great Pictures, a Virtual Tour and a liberal showing schedule will sell your home 100% of the time.

Myth #7:  Short Sales are a waste of time.

Wrong. If the best home that suits you is a short sale then it is never a waste of time.    Agents often refer to short sales as a waste of time because it takes so long to close the sale.   Waiting an extra month or two to get the perfect home is worth every delay. Buying Real Estate should always be done in a patient and thoughtful manner.  Hire an experienced Realtor who has a track record in all types of sales to help overcome foreseeable delays.

Myth #8:  Making a low ball offer for your primary home is the best way to get a deal.

Wrong. When you have identified a home that you want make an offer that is market worthy, at least. Low ball offers always create an adversarial environment and will cause your offer to be rejected out of hand. Low ball offers are best suited for investment property strategies where the outcome is based solely on numbers and not where you want to live. Offers that will initiate some negotiation are far wiser and more successful.

Myth #9:   Listing my home at the highest price leaves room for negotiation.

Wrong. Buyers search for homes in specific price ranges.   If you would accept a lower price then list it closer to that price where more buyers will find it. Listing your home at the highest price reduces the number of buyers that will consider making an offer. Most buyers search for homes priced below what they actually qualify for.  Price your home competitively to increase your pool of buyers and encourage multiple offers.

Myth #10:  If one Agent is good two is better.

Wrong. Trust is more important than pitting one against another.  Partnering with a trusted professional will always prove to be more beneficial.  A full time committed Realtor will present guidance and opportunities not found if you waste their time.   Interviewing a few recommended Realtors and committing to one will prove to be more advantageous to you.

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Almaden Valley

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Closing costs are overlooked by most buyers until the final phases of the purchase contract are being executed.  Buying a home is not quite as simple as just applying for a loan and writing an offer and moving in.

Home Buyer closing costs are arguably more important than the loan approval.     You  should consider them first.  While consulting with your Realtor ask them to describe all the different ways these costs can affect your offer, the price you pay and how you may be able to use them to help you afford a more expensive home or reduce you payment.

I have used these costs to make the best offer in multiple offers situations.    Call it creative offer structuring.   Remember,  only a few of these are commonly packaged in your mortgage and if they are not negotiated in, you should be prepared to pay them at closing.

Lender fees:

• Loan origination points – depends on your lender and type of loan
• Prepaid interest – depends on which day of the month you close
• Property tax impounds – depends on the type of loan and time of the year you close
• Insurance impounds – plan on 6 months of insurance, if required
• Processing/Underwriting fees – depends on your lender and type of loan
• Document prep fees – approximately $150.00
• Appraisal fees – approximately $450.00
• Funding fees – depends on your lender and type of loan
• Tax service, flood cert, etc. – approximately $150.00

Title fees

• Owner’s title policy – determined by purchase price
• Lender’s title policy – determined by the loan amount
• Document prep, notary, recording, courier, etc. – $200.00
• Escrow fee – also determined by purchase price

Other fees associated with the Buyer Side:

• Prorated property taxes – depends on the type of loan and when in the year you close
• Homeowner’s dues – varies depending on the development
• Transfer tax – $1.10 per $1,000 of purchase price
• Annual homeowner’s insurance policy – depends on the type of home being purchased
• HOA transfer fee – varies depending on the development
• Inspections – Property (est. $450), Termite (est $250) & Roof (est $175)- other inspections may be recommended i.e. Chimney, Septic, Foundation the list can be long in some cases.

What are buyer contingencies?     click here for a review

With the, so called, troubled Real Estate Market in  Cambrian and Los Gatos many home owners are choosing to stay put.   While selling your Cambrian home may not be a favorable choice today, doing some home upgrades surely is.

When visiting a nearby Cambrian home I found some fantastic upgrades.  The Super high quality finishes and design choices really stoked my curiosity.  Who does work like this anymore?

This wasn’t the first time I had the chance to see this kind of affordable quality.  A few months before I had the pleasure to witness some outstanding Vanity and Armour choices being installed in a beautiful Los Gatos Estate home.   Matched with the suttle venetian plaster walls in the Master Bath and the  faux Limestone  walls in the Bedroom caused me to want to learn more about this craftsman.

The owners of this Los Gatos Estate Home knew that selling their home today would not meet their personal goal of having a newer construction home.    There just wasn’t enough equity to roll it over.   the best choice:  Do some needed upgrades and stay put.

The craftsman responsible for all this quality, Greg Hendricker, owns the Cambrian Park  home I mentioned before.  Simply put, it’s a live in design studio.   There are too many functional upgrades to mention them all.    The bedroom built in’s are what really inspired me to write this post.

Greg specializes in custom designed built in cabinetry at affordable prices.    Not only does he design them, he builds them and applies the custom finishes to match  specific decor choices.

Greg’s wife Chele has embraced the flexibility in their designs and deserves some credit too.    The kitchen has a hidden refrigerator that would amaze the most discerning decorator/architect.

With the number of custom choices Greg offers,  it is apparent the choice of selling your home or upgrading may not be so difficult. following his free design consultation.

If you are considering upgrading or have thoughts of selling  your Los Gatos or Cambrian Home,  allow me to help.   I will  provide you with a FREE market analysis and guidance to help you determine your best course of action.   In addition to the free analysis,  you can learn more about the long list of contractors I have compiled.    All this with no obligation!  Why wouldn’t you?  click here to view all the homes for sale in Cambrian or  all the homes for sale in Los Gatos can be found here.

Cambrian Park in a Few Words

In the purchase contract your contingencies are those items that determine if you still like the home, accept the value and choose to proceed with the purchase.  I listed the three types below.  Their purpose is to provide a set time period for you, the home buyer, to investigate the property condition, title history and to secure financing.

The common contingency periods are 10- 17 days.  The clock starts at the ratification date of the contract or when your purchase offer is signed and acknowledged by all parties.

• Property Condition

• Financing

• Title Conditions

These are the most common contingencies found in your purchase contract.  They are not required , however your contract should have one or more of these the contingencies.   Which contingencies, is dependent upon the structure of your particular home purchase offer.  The following details their significance to help you avoid the most serious consequences.

Property Condition: This is usually based on reports like the home buyer property inspection, the termite report, roof report and, when applicable, the fireplace or masonry report.

You may order any number of inspections you deem necessary.   Inspections for rural property would be far more extensive than those necessary for a home in the suburbs or condominium.  Raw land (dirt) properties require the most intensive inspection process.  This would include septic or perk, utility soil, geological etc.

Loan Contingency: The loan approval or financing contingency is used to give you time to gain your loan approval.  There is an additional element, the appraisal.  These should be tied together.  If the home you want to buy appraises at a value equal or in excess of your offer you won’t have any problem.

The appraisal contingency can cause a problem if it is incorrectly used in the contract.   What if  the home does not appraise for the amount you offered and you removed your loan contingency?  For example, you received your loan approval subject to the appraisal and you removed your loan contingency.   What if the home appraisal did not meet the offer price you and the seller agreed on?

You would likely find yourself in a pickle.   It would be up to you to find a way to cover the difference in price.   Not a fun place to be.  You could negotiate with the seller and ask for help, pull money out of your pocket or hope you  have another contingency to use to cancel the contract.  I suggest you take measures to prevent that from happening.   Make sure the contract uses language that ties the loan approval and home appraisal together.

appraisal note: The new loan disclosure process, that began last July, requires the lender to disclose your costs and allow you 72 hours to review them (commonly called the GFE  [good faith estimate]).   Often by email (except Wells Fargo).   When that is sent to you by email or if your lender sends by regular mail you simply respond to it and that initiates the appraisal order.

The appraisal then occurs.  The appraised value simply needs to meet the value that you offered for the home.   We then remove appraisal and loan contingency.

Title: The title search is performed by the title company hired to hold escrow and perform it’s duties as a neutral third party.  The  title report is necessary to identify any clouds on title.   Clouds on title are issues that affect ownership.   This would include liens (encumbrances) and ownership rights of others attached to the property.

In addition, it clarifies lot lines, easements and the ownership title chain.    The title company will provide a preliminary title report during the contingency period set forth in your home purchase contract and a final report, an updated version of the preliminary report, is available prior to the transfer of ownership.

Condominium buyers have a few other items to consider and should have these built into any contract.  The most common of these is the Home Owners Association documentation.    This package can be quite extensive.   It covers the contingencies mentioned earlier and other important  items: HOA budget, HOA reserves, HOA meeting minutes covering the past 12 months, articles of incorporation and by laws.

Not as common, yet  becoming very important in today’s atmosphere,  is to determine if the HOA project, sometimes called a PD or PUD, is FHA  approved for FHA lending or VA approved if you are considering a VA loan (veteran’s administration).

Michael Roberts is a licensed California Realtor and real estate investor providing agent representation to home buyers and sellers in the San Fransisco Bay area.

He can be contacted at mroberts@rwnetwork.com or his Website http://www.LosGatosHomesandRealEstateBlog.com

Sad but True (true story)    You might find the ending a happy one.

Terry (not her real name) called our office in tears.  Her home was going on the county steps, the following day, to be sold to the highest bidder in a trustee sale.

She did have a little cash in the house in the form of equity.  Not Fair!

Not a fun call by any measure.    After living there for 25 years and raising her family, the lender was foreclosing.   Not a rare story…I know.

This put the whole office in a buzz to solve Terry’s problem.  I called my cash investors, others called attorneys.    My ‘ace in the hole’ investor was in Europe the other was unable to put it all together in such a short time.

It was looking dire by the end of the day.

The only solution turned out to be bankruptcy…according to legal council!  That’s not what this story is about though.  This was the only way to halt the foreclosure and allow Terry some time to get a grip.  After all, she raised her kids in this home, had no job prospects and was on the verge of a serious breakdown.

She needed to hit pause.

Terry was not devoid of responsibility and I won’t defend her position.   She just needed help.

So, the only alternative was bankruptcy.  The search began for an attorney to embrace Terry and get the ball rolling.   This was done in an attempt stop the snowballing effect!  One found,  we began to focus on solutions.

Move ahead a few days….

Terry hired us to meet the required ‘sale of the home‘ that the Trustee ordered.   This is where it went haywire AGAIN!  The Trustee said he had the legal authority to choose and hire a Realtor.  Well, his Realtor was preparing to sell the home for a ridiculously low price (about $100K low).   Leaving Terry with nothing!  The Trustee’s agent claimed his price was based on his ‘expert opinion‘, the current market and the home’s condition.

Not so fast mister!  We appealed to the Judge that this agent was out of his gourd.  Providing some strong fact based data, we were granted the job to sell Terry’s home.  Sorry Mr. Trustee‘s agent (and Mr. Trustee)!

The home was in bad shape, for sure.  The kitchen cabinet doors were falling off, the Master Bath was in need of a Hazardous Materials Team and the yard more resembled a Jungle than a forest meadow with curb appeal.

We jumped in with both feet.  Providing labor, guidance, advice and, in some cases, a late night shoulder for Terry to cry on.

The home sold in 10 days.  The offer was great and provided Terry with $90,000.00 dollars after expenses.

We make money doing this, right?  In this case there was little money left over after all the hours and effort.   It wasn’t what I earned that was rewarding, it’s what I learned…..

I work with the best group of ‘people’ in the world!  They’re not your typical, robotic, scripted salespeople who only look out for themselves…they’re real people – that care!

I almost  forgot the best part.    Once Terry began to see the light at the end of the tunnel she gained enough confidence and piece of mind to secure a great job!

Terry has a bright future on the horizon!

note:  this solution is not for everyone there are short sale and other options to consider

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I don’t know how many hours I have spent preparing Los Gatos buyer packages, uploading internet marketing and providing guidance to the Seller in anticipation of the “magic” Open House.  Only to show up and find the Seller forgot to do everything that they so eagerly agreed to do after reading “the 26 sellers mistakes”

I should have learned that a plan only lasts until the first detail slips.   When that happens the magic is gone.  Sort of.

It usually starts at the front door, or more accurately, when I drive up and see they have an alfalfa field instead of a manicured lawn.  At the front door, trying to decide what to do with the lawn, with only minutes before the buyers start to arrive,  I realize I am done.

The porch is not swept and “Spongebob” decorations from the previous weekend birthday party are still up.  Hmm…Wonder if they had Read the rest of this entry »