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Space_Acer Says:
> Today home prices however have gone up 400%
> in 10 years…never has this happened before in history.
An earlier post mentioned that it is due to the fact that they are not making any more land...
Hello Harm -
As many old timers I spoke to would say it has been normal in the past to offer below asking (lowball). Somewhere in between is the actual. This has been true for decades... I researched this out...
I visit open houses today and been told "we expect multiple bids"
I still see those homes on the market 3 months later or pulled.
My favorite bits:
A Tough Fact of Life
In the Northeast and Washington, D.C., regions, many parts of California and other desirable real-estate markets, competing against multiple buyers -- sometimes known as an overbid situation -- is a difficult fact of life. Learning what to offer is part science, part intuition, say Realtors. "With a market that's still extremely hot, it's the only way to be successful," says Linnette Edwards, an associate broker who specializes in San Francisco's East Bay area for ZipRealty Inc., an online real-estate company based in Emeryville, Calif.
She and other real-estate brokers offer these tips to help you fashion offers that outshine others on properties you want:
...If other homes like the one you want sold for $50,000 over the asking price, "you want to bid to that highest dollar amount," says Stephanie Vitacco, a realtor with Coldwell Banker Residential Brokerage in California's San Fernando Valley..."
Research the sellers. Find out how motivated they are to sell and whether they want to buy another home. In this case, you might be able to make your bid more attractive by offering such concessions in your bid as allowing them to stay in your home for free -- also known as a "free rent-back"...
Factor in the number of other buyers making offers. The more bids being made, the higher the final price will go. Typically, competitive bidding raises prices by 5% to 20%, with 10 or more offers generating the highest amounts.
Write a letter to the seller. "Don't discount the emotional factor," says Ms. Edwards. One way to set yourself apart is to write what she calls a "love letter" to the seller describing yourself and your partner and children, if you have them, and why you want the house. You might even include pictures your children have drawn of the home.
Ms. Grove and Ms. Wells included a photo from their wedding and described themselves in a personal letter to the owner of the home they wanted in San Rafael. Although they didn't get the property, such letters often work because they set potential buyers apart and make the transaction less about money, says Ms. Edwards. "It sounds cheesy, but it does work," she says. "The cheesier the better."
...Bid an odd-numbered amount. Most buyers typically offer a round number, such as $400,000 or $405,000 on a home selling for $395,000. Try to determine the highest amount you believe other bidders will offer. Then if you bid an uneven amount that's slightly higher, say $407,250, you may outbid the highest round-numbered offer and win the property, says Ms. Vitacco.
...Make your offer as clean as possible. Try to remove every factor in your offer that might deter a seller. Include the highest cash escrow and down payments you can afford and as much as possible of the remaining payment in cash. If you need financing, secure a letter from your lender stating that you have been approved for the loan. Eliminate as many contingencies as possible; offer to have the property inspected quickly and to pay local closing costs, such as special taxes; and be ready to close as soon as possible. Don't ask for any appliances or fixtures that the owner wants and be sure to offer special assistance the owner might need, such as a free rent-back clause.
...Formulate the final number yourself, with guidance from your broker. "You can't expect your broker to tell you what to bid," she says. "I try to lead buyers to a reasonable conclusion, but I hesitate to put numbers in other people's mouths."
El HARM-O, I can do a "weekend" meeting with the board of HARM-X industries GmbH LLC
ROAD TRIP.
Yeah, I agree that BA natives have a hard time surviving elsewhere. The biggest reason is the weather, once you get used to this kind of Mediterranean weather, then any deviation from the ideal mix of temperature range and humidity becomes intolerable.
A friend of mine was thinking of going to FL after living here for about a decade. His theory is, you get the same sunshine but pay half the price, since he built up quite a bit of equity in his current home, so that he can cash out and buy a nice place in FL outright. He originally planned a full-month confirmation trip hooking up with realtors and job contacts, after about a week, he cut the trip short and admitted defeat by the Southern humidity.
Another friend moved up to Seattle, at first he was very happy because Seattle has more drastic and stunning mountains than the BA. Three years ago, he called me up and said although he was sick and tired of the overcast and the lack of job options other than Microsoft, he figured that he could never move back, because the delta between his home and equivalent BA home had become so big that the only way he could move back was to win an IPO lotto.
sfbubblebuyer
2007 Mar 22, 10:35am
I have a co-worker who is selling a house right now (inherited) and she listed the house low and had two offers on the property within a day or two. She went with the lower one as the person was actually putting cash down, so she figured they MIGHT have a chance in actually closing, unlike the high bidder, who was doing a 3% down piggyback.
Former Apt Broker,
We have plenty of open land. As anyone has seen we had more construction from SF to San Jose in the past 5-7 years than any other decade i can recall. And there is plenty more... what the heck do you do with Moffet Park or the Westinghouse factory in Sunnyvale... Anyone want to take a shot ...
Space_Acer,
I actually don't think we have that much land in the more discovered urban spots, Gilroy is of course is a whole different world with as much land as you desire.
I drove through some vacant lots in Sunnyvale, Cupertino, Saratoga, and what I found out was, the vacant land was either held by a local developer who bought it many years ago, or by the city for preservation, or voted down for development by NIMBY neighbors. If land was really not an issue, we would not have seen so many townhomes, SFHs and condos built on the fringe of the freeway.
If you go down 85, and get off any exit in one of the major cities, you will see a new residential development right off the ramp. I'd like to believe that developers may assign a higher preference to lots NOT so close to the freeway if they have a choice.
Harm quoted the article...
"Learning what to offer is part science, part intuition, say Realtors. “With a market that’s still extremely hot, it’s the only way to be successful,â€
Im an accountant by trade I work with numbers. In a audit everything has to be justified and documented. Else you get Enron/WorldCom accounting fraud. Even our corporate sales team works with visiability in contract negotations. I really feel we are going to see lots of fraud first before we see any bottom in price. When you read stuff like this, you really know something is wrong.
Based on the Wall Street Journal's sage advice, the Mrs. and I will be tendering an offer this weekend for a quaint 1 Bdm shack under the Freeway overpass in lovely "South" Los Angeles we've had our eye on for some time.
Since other similar crackhou... er, homes, have been going for north of $500K, we will be bidding at least $600K. We will be waiving any buyer contingencies (as this can only impair us in our goal of "winning" the bidding war), including home inspection. I am sure if there's *anything* wrong with the home, the sellers (a nice Gypsy couple) will tell us about it, right?
Per the WSJ, we will also waive the right to keep appliances, electrical fixtures, plumbing, wiring, windows, doorknobs, etc. Who really wants to keep someone's old doorknobs and plumbing anyway? And if the seller wants to remain rent-free tenants indefinitely at our expense --no problem! We can just continue to rent until the sellers feel "ready" to move on. Anything we can do to make the transition easier for those kind-hearted souls...
Of course, we *will* be writing the sellers a personalized "love letter" with wedding photo, telling them how much we worship them and the ground they walk on, etc. I'm wondering if we shouldn't also offer a free BJ to, you know, set ourselves apart from the other buyers?
Unfortunately, we do not yet have children, so cannot include pictures our kids have drawn of the home. However, we do have a very prolific cat, who has kindly contributed some "found art" to the cause. Here is Mr. Whisker's rendering of the seller's home:
@Surfer-X,
Sounds do-able. Do we know when the NCAL blog party is taking place? We should talk soon.
OO-
I think you will find new developments scattered inward as well. Bottom line there is lots of land out there.
Use Zillow photos...
5307 Fraschini Cir, San Jose, CA 95136
Actually I dont think we need more land, we have plenty of land already.
We can also look at the vacent business parks .. lots of space there!
We are already seeing that on Tantau in Cupertino... form site of Tandem Computers...
Local employers are not eager to increase spending in our area to due higher salary costs.
OO,
Yes, I know, but most sellers' minds and expectations are still stuck in Jan '05. I am just "Facing Reality". ;-)
Seriously, though, I really enjoyed re-reading that --an unintentionally hilarious reminder of how absurd things got at the peak. It must be preserved in the Hall of Shame.
LOL!
"You might even include pictures your children have drawn of the home.
Ms. Grove and Ms. Wells included a photo from their wedding and described themselves in a personal letter to the owner of the home they wanted in San Rafael. "
Feed the chipmunks everyday....
BAHAHAHAAH !
@HelloKitty,
If the wife is hot, make sure to ask for a ‘date’ with her too
:lol:
On topic.
Last thread I mentioned to OO that Cupertino inventory is around 72. Today it is 82. Evergreen is 338 according to Zip Reality.
I see inventory UP. The prices and sales in DQ numbers for Santa Clara are up as well. The price per SQFT jumped from 485 to 500.
This is in the fortress areas. The fringe areas show continuing decline.
This is very interesting. I am looking forward to April-May numbers to see if the subprime meltdown has any effect.
Peter P Says:
The one thing better than winning competitions is winning without competitions.
If you have to compete, you are doing the wrong thing at the wrong time.
No kidding. Also, it’s important to remember that competition is really for us proles. The truly rich never have to "compete" for anything. The only "competition" going on in boardrooms is: (a) who can get the most outrageous compensation package, (b) who can (metaphorically) screw over rank-and-file employees and customers the hardest, and (c) who can (literally) screw the most supermodels.
It used to be 10 years ago if someone was giving you 1 million dollars they a night with Demi Moore. Now they get a fixer in Cupertino.
LOL. But can she teach math to my kids ? Hah ... see that's why one buys in Cupertino. Your kids will be set for life. Glory and prosperity will be theirs. Live in a crappy house, give up all your youth years so that your kids can learn 2+2 better than other kids. You won't have money for their college, they MAY not give a sh1t about you when you retire broke, but hey ... you can't put a price on ELEMENTARY education.
Is there any proof that the same kid, over a lifetime, do better by attending a Palo Alto school rather than a Mountain View school?
Is there any proof that the same kid,
What more proof do you need ? People paying 75% of their net income is not proof enough ? Are you doubting the judgment of so many geek parents "with a bad case of school fetish" (copyright SP) ?
StuckinBA,
A lot of this does come from FOB Asian immigrants' background of early age sorting. Suddenly maturing at 30 and becoming successful doesn't happen amongst the Mandarins of the East.
If you go down 85, and get off any exit in one of the major cities, you will see a new residential development right off the ramp. I’d like to believe that developers may assign a higher preference to lots NOT so close to the freeway if they have a choice.
I thought those were all rentals. Maybe we're talking about something different.
I know astrid. It's hard to control the disgust, the shock.
I am quite confused about this market. As much sales are there, there doesn't seem to be any conviction. A few weeks ago I mentioned about the person who exclaimed to me, "It doesn't make any financial sense to buy right now, but I cannot wait forever !". That is one of the best quotes I heard in person. I happened to meet them again. They have bought, moved in but are very unsure about the smartness of their decision. They haven't lived there even for a month !
I see this in people around me. People know something MAY be wrong with the housing market, but they cannot get themselves to accept that the market can go down significantly.
The thing is nothing terrible has happened in BA. In fact things are better. Unlike the exploding inventory of Florida/Phoenix, or rising foreclosures of San Diego, BA is actually doing OK. Unless these things happen here (not in that proportion), some people will keep buying and feel smart abut getting 10% off last year's price.
In 1990 the workforce of SV was around 850K, todays its the same number if not less. So demand for housing has been flat for 15+ years.
I keep seeing this stat - but yet I find it hard to believe. I'll be honest, I wasn't here since 1990 - but those who have say that it's getting more and more crowded, and congested.
I haven't heard of an AIDS insurance policy. It seems that it would be an astoundingly stupid business model.
view from silicon valley has great stats...
it matches my personal observations... i been here since 1970
yes we had a flux in late 90s but no rush to hire that amount of people again.
SFWoman,
I think BruceB meant the gays who, pre-AIDS cocktail treatment, cashed in their life insurance payment in anticipation of soon dying. Though I could be completely completely wrong.
Mountain View school > St Francis High School has been the best over 3 decades... but thats never been the reason people living there.
Sunnyvale High was closed due to declining enrollment back in 1981.
SHS, Fremont, Cupertino, Homestead... ah home of burnouts/potheads...
Few of us were interested in Math and Sciences... Im one of them.
Space Ace,
Yeah, that's what I was getting to. Reasonably bright kids with supportive parents should be able to succeed in any middling to good school. I don't see the obsession with going to the "best" school.
eburbed-
My daily travel distance 12 miles is the same as back in 1990... 15-20 minutes its unchanged..
I still see traffic today from South San Jose to Mt View using 85 as I did back in 1985....unchanged. St Thomas and Lawrence is unchanged.. Depends on your commute.
Your so rigth astrid...And i went to dopers school... I mean really rough crowd..so glad to leave SHS.
CB -
Homes in 1996-7 were fetching arount 110/sq ft... that home was way overpriced in 2001. The sellers were fishing for IPO lotto winners. And yes, as is.. That made me sick of the garbage i saw back in 2001. Thats when I first learned of the Fake Bids realtors were using on buyers. You saw prices double by 2000. 180K to 500K in just 4 years.. now same place is 700K.
Give me a break...
Maybe I should not move to BA AKA Land of Lotus Eaters. If I move there I may never be able to leave again.
I took some Berkeley classes one summer and had my project mates describe Berkeley weather as "too hot for about one month in the summer and too cold the rest of the time". The mind boggles.
http://www.contracostatimes.com/mld/cctimes/news/local/states/california/16951941.htm
Enjoy. (Sorry for long URL...)
SJ Merc Headlines.... ( i hope to see)
Cheaploans.com closing doors.
Other also fearing similar faith.
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There appears to be a significant drop in inventory on listing sites. At the same time, open house activities appear to be picking up. Could this be the start of a considerable spring bounce? What is going on?
Perhaps we need to brace for some impact.
[Note: This observation has not been confirmed by most participants of this blog. Please do not be alarmed.]
Peter P