Curious about the value of your Los Altos area home in today’s real estate market? Our free market snapshot will answer many of the questions that you may have about:
How do sales prices compare with list prices?
How fast are home selling right now?
What homes are selling and what aren’t?
Complete the market snapshot request form below. Make sure to enter the specifics about your home. We’ll e-mail you an interactive market snapshot. Note, your information will not be used for solicitation and rest assured that none of your information will be shared with or sold to anyone.
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You’ll be able to see neighborhood homes for sale, sold homes and new listings. You’ll be able to view 90-day trend data for days on market, selling vs asking prices, asking vs sold prices, and the number of homes sold.
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Every so often, I receive flyers dropped off on my doorstep asking me to sell my home to someone who is “interested in buying a property in my neighborhood.” I’ve been receiving them from the same person for over 5 years, yet he hasn’t moved into the neighborhood. I wonder why?
In this particular flyer, the buyer’s terms were clearly spelled out:
I will buy the property in “as is: condition
I will pay a fair price
I will pay cash
You can remain in the home for a while after we close
I am not an agent
I will pay all closing costs
I will make this transaction easy and smooth
The second paragraph reads…
“If you are thinking of selling, please let me know and I will be happy to meet with you and make a fair offer. I am not a real estate agent. I am interested in property in this neighborhood. I look forward to hearing from you…. “
The bottom had a first name, phone and e-mail address.
From a quick glance it appears as if this is just a guy who wants to move into my Los Altos neighborhood. How flattering, he likes my neighborhood and wants to be my neighbor. I did a little research and this is what I found out.
The buyer is a real estate investor. He wants to buy a house if he can make money on it. I’m not going to see him doing yard work out front. His kids aren’t going to play with mine. He won’t be at the neighborhood block party!
His flyer makes it look as if he is really interested in buying in the neighborhood for personal use, but the reality is he buys and sells homes off market for a profit. It is a pretty sophisticated system whose success is based in part on the lack of knowledge or sophistication of the homeowner.
Here is how it works
After targeting a neighborhood with flyers (apparently his neighborhood is the entire peninsula), he receives a call from the unsuspecting home seller. He offers a substantially below market offer but makes it sound better by making the process easy on the seller (buying “as is,” pay cash (really does he?), pay closing costs, allow the homeowner to stay in-house etc.).
The contract puts him and/or an assignee as the buyer (this allows him to assign the buyer’s contractual rights to a third-party). Either before or while in contract, he secures an investor/buyer who will take over the purchase, he removes himself from the contract and a new investor/buyer becomes the buyer. He walks away with a large fee for setting up the deal (does he need a real estate license for this?). The new buyer gets a home below market and the seller is left wondering what happened.
The investor doesn’t want a real estate professional, real estate attorney, or anyone else who might scrutinize the deal involved. The more eyes that look at the deal the less likely the deal will go through.
Why is this a bad deal for the home seller?
The investor will only purchase properties that are sold substantially below market rate – seller is leaving a large sum of money on the table.
The investor will only purchase properties “off-market” because he knows a house exposed to the market will cost him substantially more money, thereby reducing his profit – again, seller leaves money on the table.
By assigning the contract to another, the seller doesn’t know who the buyer really is or what the buyer’s qualifications are – there is a much higher probability that the deal won’t go through.
The investor is not a licensed real estate sales person yet acts like one (are these activities illegal?) - could potentially involve the seller in future legal problems.
The investor can tie up a property for months (until he/she finds a buyer) – thereby preventing the seller from selling the home to anyone else.
Note: I don’t believe the investor’s activities are illegal. However, his flyers are misleading and his success is directly related to the seller’s lack of market knowledge.
If you receive one of these flyers and are curious, make sure you fully understand the deal and the person behind the deal before committing to anything. You must know that if you choose to sell your home off-market or as a pocket listing, it is highly likely that you will net less money than if you sold it with full market exposure. If approached, contact your local Realtor or a real estate attorney who specializes in these types of transactions to see if it is in your best interests to sell your home in this manner.
If you have questions about what is in your best interests when selling your home in today’s real estate market, please call me directly at 650 917-4250.
Low property appraisals can occur in any real estate market. In a rising market, multiple offers can create a final contract price higher than current comparable properties. In a declining market, appraisal values may not come in at value. Both buyer and seller want the home to appraise for the negotiated price, but sometimes it doesn’t. What can a buyer or seller do if a property doesn’t appraise at or above the negotiated purchase price?
1. The buyer can bring in additional cash to make up the difference between appraised value and contract value.
2. The buyer and seller can re-negotiate the contract price down to the appraised value price.
3. The seller can hold true to the purchase contract price and possibly carry a 2nd note for the difference between the appraised value and purchase contract value.
4. The lender could order a second appraisal that might come in at value and/or request to appeal the original appraisal. The appeal could be based on the appraiser using wrong or outdated comparable properties, the appraiser’s lack of knowledge of the community (comparing two homes from different school systems etc.) or the appraiser using incorrect information about the home (i.e. size, age amenities etc).
5. The buyer can kill the loan with the original lender and start fresh with a new loan and subsequently new appraisal. The seller must agree, this will take time and it might not yield different results. If there are questions about a property’s ability to appraise, one might double app with two lenders so you have a back-up in place should the first lender (do to low appraisal) not be able to perform.
6. Both parties can agree to cancel the transaction.
Since 1994, I have seen almost all of these strategies in reaction to a low appraisal value used. Renegotiating the purchase price and/or having the buyer bring in more cash seem to be most frequently used strategy for keeping the deal together. However, it really depends on the buyer, seller and real estate agents having a meeting of the mind to make it work.
Should you have questions about buying or selling a home, please call or text me directly at 650 465-0755.
I’ve been selling residential real estate in Los Altos and the surrounding communities since 1994. Most of the time when I’m representing a buyer, I don’t talk directly to the owner. I talk with the listing agent, who in turn talks with his/her seller client. However, every once in a while you run into a home being sold by owner or by agent-owner. This is can be a less than ideal situation for all parties involved.
It is totally understandable that seller-agents want to sell their own home. I’ve done it myself – once. Why would I pay someone else to sell my home? After all, that’s what I do for a living. I know the real estate market. I know the comparable properties. I know the neighborhoods and what buyers like. Lastly, I know my home like no other agent could. And that is where the problems begin.
Dealing with for-sale-by-owners is difficult enough, but dealing with one who also is a real estate agent can be extremely difficult for the following five reasons:
1. Agent-owners lack the objectivity to view their home as a buyer would. That rust colored shag carpet does not make the home retro and worth more. Rather, it makes it look old and tired and worth less. Successful home sellers understand the need to look at the home through the eyes of a buyer.
2. Agent-owners think the price they paid for their home is related to its current value. Too often agent-owners behave like traditional home sellers. Even though they know there is no cause and effect relationship, agent-owners believe (or hope) that their home is worth more than the amount they paid for it. Hello, just because you paid $$$ for the home, doesn’t make it worth $$$ plus $. This is especially true in today’s real estate climate. Current market conditions determine a home’s current market value. In a buyer’s eyes, your ownership does not add or detract value from the home.
3. Agent-owners can be irrational. This usually becomes apparent during negotiations. Comparable homes sales are just that, comparable. Agent-owners use comparable home sales when establishing market value for their client’s homes. Yet this same process gets skewed when they are dealing with their own home. I love it when you go over comparable sales with agent-owners, they invariably believe that their home is worth more because it has “potential.” Hello, ground control to agent Tom, potential means nothing! Look at the numbers.
4. Agent-owners sometimes throw ethics out the window when they are dealing with others on the sale of their own home. Is this intentional? No, but it happens. Do they fill out the disclosure documents thoroughly or is some information lacking? Agent-owners understand the process of selling a home, yet often disregard these processes. For example, an agent-owner may tell agents that offers will be looked at “as they come in.” Then when only one offer is presented, they change the rules and tell the real estate community that they are holding off looking at offers until a certain date in the future. Meanwhile they “shop” the original offer to interested buyers and their agents. Changing the rules midstream usually bites the agent-owner in the backside by scaring off solid buyers and their agents. Unlike when a traditional home seller enlists a Realtor to sell their home, there is no second pair of eyes to oversee the process when an agent-owner sells his/her home.
5. Agent-owners can scare off potential homeowners with their “over-exuberance.“ Ever go to an open house hosted by the owner? That owner follows you around, pointing out everything they like about the property. Kind of irritating. Agent-owners do this to the “Nth” degree. They’ll meet you at the door, want you to “sign-in” and then walk two feet behind you pointing out the lovely fireplace mantle and how much it means to them. C-r-e-e-p-y! Back off and let the buyers take a look at the house at their own pace.
It really comes down to the fact that anyone selling their own house can be far too emotionally invested in the home to make good real estate decisions. There is no objective filter, no second pair of eyes. That is one of the benefits of hiring a Realtor to sell your house. A Realtor will look at things objectively and give you the perspective needed to achieve your real estate goals.
If you need someone to give you real answers to your real estate questions, call or text me at 650 465-0755
According to Leslie Appleton Young, the Chief Economist for the California Association of Realtors, California’s home sales should increase approximately 2% and the median home price, which dropped 4% in 2011, should be up slightly. Click on CAR’s 2012 Housing Market Forecast for a 2-minute video snap shot.
That’s nice information, but it doesn’t really tell us the true story about what’s happening in our local real estate market. It is a statewide forecast, not a Los Altos or Mountain View Forecast. Below are our local numbers.
Single Family Home Sales In Los Altos – 2011
Los Altos saw 308 single family homes sell in 2011, a 7.8% drop from 2010 (334). One would think that because the number of sales are down that sales prices would also be down. However, this is not the case. Median sales prices were up 6.3% from $1,550,000 (2010) to $1,647,000 (2011). Sales were brisk, with the average days on the market down from 53 (2010) to 40 (2011). Lastly, the list price to sales price ratio was also up, from 98.1% (2010) to 99% (2011). Sellers were more realistic in their asking prices.
Condo/Townhome Sales in Los Altos – 2011
Forty-nine Condos/Townhomes close escrow in Los Altos in 2011. That is up 19% from 2010 (41) and 25% from 2009 (39). The median sales price was also up 5.3% from $760K (2009, 2010) to 800K in 2011. The number of days on the market for condos/townhomes was cut in half from 103 days (2010) to 52 days in 2011. Lastly, the list price to sales price ratio jumped two percentage points from 96% to 98.3%, indicating that sellers are realistically pricing their properties.
The graphs below show the numbers. Note: all data was taken from MLSListings.com our local Multiple listing service provider.
Are you curious to know what that Los Altos home sold for in 2011?
Click on 2011 Los Altos Residential Summary Report for details (address, sales price, size etc.) on the all the single family homes that closed escrow in 2011 in Los Altos. Note: all data was taken from our local MLS and is deemed accurate but not guaranteed.
Are you curious to know what that Los Altos Condo or Townhome sold for in 2011?
Click on 2011 Los Altos Condo:Townhome Residential Summary Report for details (address, sales price, size etc.) on the all the condos/townhomes that closed escrow in 2011 in Los Altos. Note: all data was taken from our local MLS and is deemed accurate but not guaranteed.
Should you have any questions about selling your home in today’s market or you wish to purchase a home, please call or text me at 650 465-0755.
According to MLS Listings Inc. data there currently are twenty-two single family homes for sale in South Los Altos. Thirteen homes are active listings and the remaining nine homes are under contract. Lower price properties are currently driving our market. We can see this by looking at the average list price for active properties ($2,558,615) and comparing that with the average list price for homes under contract ($1,778,321).
November Home Sales Activity For South Los Altos – Home sales are steady.
15 single family homes (SFH) closed escrow in South Los Altos in the month of November. Since 2007, the average number of SFH sales in November has been 11.
Only four properties had multiple offers and sold at or above their asking price. Properties priced between 1.3 million and 1.6 million continue to receive the most buyer activity.
Are you curious to know what that South Los Altos home sold for?
Click on South Los Altos Residential Summary Report for November 2011 for details (address, sales price, size etc.) on the thirteen properties that closed escrow in September in South Los Altos. Note: all data was taken from our local MLS and is deemed accurate but not guaranteed.
Median Sales Prices in South Los Altos are inching up:
Year to date, the median sales price for single family homes sold in South Los Altos is $1,540,000. The graph below shows the last seven years of median sales prices in South Los Altos. You’ll note that the median sales prices in South Los Altos have steadily increased since 2009. It looks like we’re back to 2005 – 06 prices.
If you are looking for a quick and easy way to find your South Los Altos dream home, click here?
Should you have any questions about selling your home in today’s market or you wish to purchase a home, please call or text me at 650 465-0755.
Earlier this month a home in South Los Altos closed escrow. Nothing new or exciting given that approximately 12 homes a month close escrow in South Los Altos each month. What is interesting is how this home was “marketed” and how much money the seller left on the table. Let me explain.
Back in May/June of this year, this South Los Altos home was put on Craigslist as a “for sale by owner” listing for just under 1.2 million dollars. The owner knew that he could sell the family home quickly (“because everything in this neighborhood sells quickly”) and reduce his selling expenses (by not having to pay a listing agent side commission). Selling by owner is a viable option for sophisticated sellers who have the knowledge, time, energy and resources. Unfortunately, the “for sale by owner” route didn’t work out as well as I think the seller would have wanted.
The house sold quickly and closed escrow in early July. However, the sales price of $1,140,000 was substantially below market given the recent comparable sales.
The new buyer-investor did a modest remodel (a flip kitchen – looks nice but not something an owner would put in for themselves, interior paint, patio and landscaping etc.). The home was listed with an Realtor, placed on the multiple listing service and sold in one week for over 1.36 million. I estimate the net gain (after all expenses and fees) to the new owner-investor at approximately 100k.
Had the original home owner’s heirs marketed the home correctly, they would have received more money. Instead an investor bought the home under market and sold it for a substantial profit. It is sad, but a sizeable amount of the investor’s profit was the equity that this family had earned over it’s 30+ years of home ownership. It should have gone to the original homeowner’s heirs, but instead it went to an investor who owned the home for less than 4 months.
Yes, the remodel added value but as all investors who buy a home in order to flip it for profit understand, the big money is earned on the initial purchase and subsequent value is added with any remodeling.
By the way this remodel was very limited in scope relative to the usual flip that happens in Los Altos. Usually an investor will remodel the kitchen (with median-higher end finishes), remodel all bathrooms, change out all windows, add crown molding, change out the baseboards, change out lighting, re-finish the hardwood floors and/or replace carpeting, paint and landscaping.
Two reasons I think the flip was limited in scope:
Time constraint issues. A complete remodel would push out the date the home would hit the market to late fall when typically there are fewer buyers
They made a sizeable profit when they bought it “for sale by owner.” Further remodeling would have reduced the profit margin percentages. They could have just painted and landscaped and still made 70k profit.
Lessons Learned:
“For sale by owner” properties attract buyers who are probably more sophisticated than the average home seller.
Selling real estate to maximize one’s profit is not as easy as it may appear.
Get advice from experienced and trusted sources.
Exposing the home to the largest pool of buyers generally yields better results
Taking the emotion out of the deal usually yields better results.
The following video details the Five Critical things to think about if you are thinking of buying or selling a home in Los Altos with swimming pool.
Benefits of pool ownership:
Great exercise
Great for entertaining
Fun
Relaxation
Aesthetic beauty
Downsides of pool ownership:
Safety and liability issues
Maintenance and operational expenses
Things to consider if you are buying a home with a pool:
Pool condition – have it inspected
Is it relatively safe for those who aren’t water safe? Can you make it safe with minimal expense?
Is it in a neighborhood or market segment where the pool adds value to the property or takes value away from the property?
Things home sellers who have a pool should consider:
Fully disclose the pool’s condition and operational expenses
If home is in a neighborhood that doesn’t have many pools or if the pool’s condition is suspect, do a cost analysis to see if it makes sense to fill in the pool and landscape the yard before putting home on market.
Swimming pools are a great lifestyle investment but not necessarily a great financial investment. The property’s location and market segment can help in determining its marketability.
Most of today’s home buyers and sellers are apprehensive about our real estate market. Everyone is wondering where prices are going. Are they going to rise, drop, or remain flat? If they move up or down, how much will they adjust and when? Ideally, every buyer and seller wants to time the market.
I’d love to say I could predict where the Los Altos real estate market is heading over the next 90 days, 180 days, 1 year, or 3 years, but I can’t. There is one thing that buyers and sellers should strongly consider, the cost of money, otherwise known as mortgage rates. Here is an example why.
According to mlslistings.com (our local MLS provider) the median priced home in Los Altos for the month of June 2011 was $1,660,000. Assuming a 20% down payment and a current jumbo loan rate of 5%, today’s home buyer would pay approximately $7,100 per month for their loan. If rates were to increase by 1 point, the monthly payment (using 20% down) would increase to approximately $7,922. If rates dropped 1 point (not likely), the monthly payment would drop to approximately $6,320. How does home price fluctuations affect a buyer’s monthly mortgage payment?
Using a 5% jumbo loan rate and a 5% drop in the median home price ($1,577,000 purchase price, $1,261,600 loan), a home buyer’s loan payment would be approximately $6,745 per month. At 6%, the loan payment would be approximately $7,527 per month. Assuming that rates stayed the same as today, a buyer hoping for home prices to drop 5% would save $355 per month in mortgage payment, $16,600 in down payment and $83 in property taxes.
However, loan rates are at historical lows. It is probable that rates will increase. If home prices drop 5% and the jumbo loan rate increases 1 point (jumbo loan rates have hovered around 5.6% over the last three years and as recent as August 2008 were slightly over 7%), a buyer’s monthly payment would be approximately $7,527 or $426 more than buying a $1,660,000 home today at 5%. If rates jumped 2 points (not likely in the near future) the monthly loan payment would be $8,345 or $1,245 per month more.
Buyers and sellers should think about the costs of financing. There are many excellent websites with charts, graphs and analysis that help consumers understand the mortgage markets.
Will home prices adjust more than loan rates or will loan rates adjust more than home prices? My best guess is that any negative adjustments in home prices will be offset by higher financing costs. Should prices continue to rise (the median home price in Los Altos for the first half of 2011 is up 7% over that of 2010 and 10% over that of 2009), buyers will miss the boat. At least that’s what I see for the Los Altos real estate market.
Should you have any questions about the value of your home in today’s market or you wish to purchase a home, please call or text me at 650 465-0755.
There has been a lot of local excitement regarding the recent sale of 13310 La Paloma Road in Los Altos Hills. Although I have not personally viewed this home, it appears to be a phenomenal one-of-a-kind luxury estate worthy of its stratospheric sales price of $100 million. As a resident of Santa Clara County, I want to personally thank Yuri Milner for single-handedly adding significant property tax revenue to Santa Clara County’s coffers.
It had to be a difficult property to price so I thought that I would do what many home sellers do, I went to Zillow to get a Zestimate. Zillow’s Zestimate was $21,604,000., a mere $78.4 million dollars shy of its actual sales price.
To be fair, this property is extremely unusual, making it difficult to price. According to Zillow’s own web site:
“A Zestimate home valuation is Zillow’s estimated market value. It is not an appraisal. Use it as a starting pointto determine a home’s value.”
Zillow is a good place to start, but please don’t think a Zestimate should be the actual market value for your home. Your home’s condition, location, upgrades etc. must be included in your home’s valuation. Seek a knowledgeable real estate professional to help you determine the value of your home in today’s real estate market.
FYI – Although 13310 La Paloma Road is the largest single family home to sell in Santa Clara County, there is at least one home that is larger….12335 Stonebrook Drive in Los Altos Hills has been listed on and off the market for the last few years (last listed at $28.5 million). The Seller (per MLS data) indicates that this property is 30,000 square feet (county records shows it at 14,787 sf), making it the largest single family home that I am aware of in Santa Clara County.
Should you have any questions about any of these properties or about the value of you home in today’s market, please contact me directly at 650 917-4250 for a confidential conversation.
Below are Los Altos Hills properties priced at $10 million and above:
In today’s unsettled real estate market, does it make more sense for a home buyer to purchase a less expensive home that is in need of remodeling/expansion or a more expensive home that has already been remodeled? The answer may not be that easy.
For argument’s sake, I am assuming that the home buyer has approximately the same amount dedicated for a purchase as he/she does for a purchase/remodel.
Let’s look at some of the benefits of buying a home that has already been substantially expanded/remodeled but whose initial purchase price is higher:
You don’t have to do the work! Just turn the key and move in.
Remodeling can be a costly stressful process. Buying a home that has already been remodeled eliminates these issues.
Most everything is new and up to date. Maintenance costs (in theory) will be lower.
You control the costs because you know exactly what your final cost for the remodeled home is…It is your purchase price.
You also control the method of financing. If you were to remodel an older home, you would need to come up with additional cash or new financing.
Benefits of buying a less expensive home and doing a remodel/expansion yourself:
You get exactly what you want in terms of the finished product. You get to design the home in the style and function you want (pending budget). You have total control over the end product (sort of).
You are adding value to the property (but maybe not as much as you would hope). Click here for Remodeling Magazine’s annual report detailing the relationship between remodeling costs versus home resale value for the San Francisco region.
Additional thoughts for those who want to remodel a home:
What is the basic floor plan of the original house you intend to remodel? Some footprints lead to better additions/remodel. For example, most 50-60 year old Los Altos homes have small kitchens and baths that not only need to be remodeled, but expanded as well. Where is that space coming from? Ideally if you can find a home that has the space that can be re-utilized. Is it possible to take a 3 bedroom and expand out through the back yard and add a master suite etc.? Lot size becomes more important.
Building costs vary so you should check with several contractors. One local high-end builder won’t touch a job unless it’s at $700-1000 a square foot. I remodeled my home in 2004 for about $250/ft. Current prices should be somewhere in between.
Where do you plan to live when the work is being done? Most builders prefer that you live elsewhere so they can do their work without the homeowner always present.
How are you going to finance the remodel? A remodel takes cash, do you have it? Will you have to liquidate stock etc. to fund the remodel thereby loosing an asset (the stock) that is (presumably) making money for you. What is the opportunity cost of using your cash to fund the remodel? Buying a home that is done allows you to “finance” the “remodel costs” in the original loan.
How is your family life? Are you married? kids? Do want to keep it that way? An extended remodel takes its toll on all involved (your family as well as your builder’s). Unfortunately, I’ve seen some marriages go through the time and expense of a home remodel only to separate within a few years after the completion of work.
Recouping your costs on a remodel depends on where you feel the real estate market is going and your holding period. The longer you hold, the higher the probability the market will go up. However, the longer you hold, the higher the probability that the remodel will become old (style changes) and have less resale value.
Final Thought
I bought a smaller home in Los Altos in the best neighborhood I could afford. A few years later, I completed a remodel/expansion. Looking back, I wasn’t as efficient in my use of space, but I am happy with the final result. I look at it as an investment in my family’s quality of life.
Should you have any questions about whether to remodel or buy new, please contact me directly at 650 917-4250 for a confidential discussion.
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