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5 Ways to Win a Multiple Offer Situation in Silicon Valley

If you want to win the bid in a multiple offer situation for a Silicon Valley, consider these five things.

If you want to buy a Silicon Valley home but you find yourself in a multiple offer situation, there are a few select things you can do to ensure you win the home you want. Consider these five things:

1. Know the competition: Your agent should try to find out how many bids you're competing against and how many disclosures packages have been downloaded. About a quarter to a third of the number of disclosure packages downloaded, will indicate how many offers you can expect to face.

2. Know the market: What's the average list-to-sales price ratio in the neighborhood for the two or three most recent home sales? If homes there are selling for tens of thousands of dollars over asking price, you want to be prepared to offer that much over list price. This might make you concerned about overpaying, but in a market where values have appreciated by 10% a year, you'll easily recoup that extra 2% you're offering in a few months.

Remove as many contingencies as possible to make your offer more enticing.

3. Consider removing as many contingencies as possible when writing your offer: If you're working with a lender, get a full loan approval so you can make an offer with no loan contingencies. If you have a property contingency, you have a couple options. If the seller has provided inspections, review them first. If not, ask the seller's agent if you can do your inspections before making an offer. That way when the time comes to make an offer, you won't need an appraisal contingency or a loan contingency.

4. Get personal: Write a personal letter to the seller telling them why you love their house and how excited your family is to live there. You'd be amazed at how effective this is. We've seen scenarios where a letter was the tipping point that caused our buyers to win the bid despite not even being the highest dollar bid.

5. If you don't win the bid, get a written backup offer in place: Offer prices can escalate quickly in these situations, and sometimes that No. 1 buyer backs out of the deal. A written backup offer will put you first in line if that happens.

This all works if you have a great agent working on your behalf. If you'd like to talk more about buying a home in our market or you're thinking of selling your house, give me a call or send me an email soon. I'd love to speak with you!

We Have a Pie with Your Name on It

Our 3rd Annual Pie Giveaway is coming up soon. Here’s how to pick up your free pie.

As a way of saying thank you to all of our friends, family members, and clients, I’d like to invite you to take part in our 3rd Annual Pie Giveaway.

We’d like to offer you your choice of either a pumpkin or an apple pie to take with you to your Thanksgiving dinner. This year, the event will take place at my home on Tuesday, November 22nd from 5 p.m. to 8 p.m. Stop by for a cup of hot chocolate, cider, or champagne and pick up your free pie!

We feel very blessed to have all of you in our lives, and help you through your real estate journey in this crazy place called Silicon Valley. Though the job can be demanding at times, we love serving you and feel that we are creating better lives for our clients through real estate and better lives for ourselves as well.

We look forward to seeing you on November 22nd!

If you’d like to request a pie, just send us an email and let us know in the subject line whether you’d like pumpkin or apple. Once we get your email, we’ll send you my address so that you know where to pick up your free pie.

Once again, we’d love to thank you for your referrals and support. Our business is growing stronger every year, and you all are a major part of our success. Happy Thanksgiving and we hope to see you soon!

Is the Silicon Valley Market About to Peak?

What is happening with Silicon Valley real estate in the early months of 2016? To find out, it’s important to look at what drives the industry, the economy, and jobs. Nationally, we’ve seen strong job growth, and here in Silicon Valley, it’s been amazing. Here’s what we’ve seen in the last year:

  • 55,000 jobs were created.
  • 34,000 people moved here.
  • 5,559 new permits were issued for construction.

As you can see, the amount of permits for construction falls well below the number of people who have moved to the Silicon Valley area. This has resulted in a shortage of 25,000 homes, which has only exacerbated our already low inventory. The result was the big run up in prices we’ve seen so far this year.

I'm expecting the Silicon Valley market to top either late this year or early next year.

If you want to know where the market is heading, it’s important to take at the five things that drive real estate:

  1. Sales: The number of sales in our area spiked in 2012 when the real estate market bottomed. We’ve seen a decreasing number of sales since then.
  2. Available inventory: The reason sales were so high in 2012 was that there were many homes available. The recession forced many homeowners to sell their homes, and many were scooped up cheaply through short sales and foreclosures. Since then, we’ve been hovering around 1.5 months of inventory, which is astonishingly low.
  3. Prices: As mentioned before, home prices bottomed out in 2012; the median price of a Silicon Valley home at that time was only $551,000. As the market recovered, home prices appreciated rapidly up until 2015, when the median homes price was all the way up to $845,000. That’s a 40% increase in housing prices in only three years, a number that is not sustainable in the long run.
  4. Interest rates: The reason prices have been able to run up is because interest rates have remained relatively low. However, now that the market has made a strong recovery, the Fed has announced their plans to start raising rates -- the only question is when. Most experts anticipate rates to increase throughout 2016 and into 2017.
  5. Affordability: Rising interest rates, of course, will negatively affect buying power. Back in 2013, 36% of first-time home buyers could afford to purchase a home. That number has decreased each year to the current number of only 16% affordability. Last time we saw this kind of decline, affordability dropped to 11% and the market topped.

So, what does all of this mean for 2016? First, I think that sales will continue at a steady pace (+2%); second, I predict prices to continue their rise (+7%) because of the low supply and high demand of homes; third, interest rates are going to continue to steadily rise through the 4% ranges; and lastly, I think that the rise in home prices is going to drop the affordability rate below 15%. I’m expecting the Silicon Valley market to top either late this year or early next year.

Historically, the US economy goes through seven-year cycles. Since the last market top was 2008, we’re due for another one. If you are a buyer, we highly advise against trying to time the market because the longer you wait, the higher interest rates are going to increase. Think of it this way: If the market dips by 10%, and interest rates only rise 1%, your monthly rates will be the same. In other words, if you’re ready to buy, there’s no reason to wait -- get in the market now while rates are low.

If you plan on selling, this year would be a great time to do so. Prices are on the rise and there is a massive shortage of homes in the Silicon Valley area. This demand doesn’t seem to be going anywhere, so we recommend selling your home before affordability drops and home prices peak.
If you would like additional advice, information, or real estate assistance of any kind, don’t hesitate to reach out to us. We’re always available to help you make a better life through real estate!

Join Our Client Concierge Club

Lately, many people have asked us for recommendations for an architect, contractor, designer, landscaper, and CPA. Of course, we know great professionals we can hook you up with. In fact, we have a particular resource better than Angie’s List, Craigslist, and Diamonds Certified,

Over the last eight years, we’ve curated a preferred vendor list for the surrounding Los Gatos area. We want to share this list with you. It’s easy! Just text BJREX to 38470. You’ll receive a link to download our Homekeepr, complete with the five-star vendor list.

Additionally, the app will connect you with our exclusive Client Concierge Club. It’s an amazing group reserved for our previous clients, friends, and family. It includes some fun events and giveaways throughout the year. Most importantly, it’ll offer you discounts on premium home goods and services from notable brands including Wayfair, Restoration Hardware, Sonos Audio, and Vivint Home Security.

The app will connect you with our Client Concierge Club.

As a token of our appreciation, we’ll send you a Client Concierge Club card preloaded with $5 Starbucks credit. This is our way to express our appreciation for your endorsements, referrals, and overall support. Don’t miss out on a free cup of coffee and more savings!

If you have a question about real estate in the surrounding Los Gatos area, give me a call or send me an email. I’d be happy to serve your local real estate needs!

The Power of Partnership

Today, we wanted to let you know about some great things that are happening in our business. Frank Herman has joined us here at Keller Williams in Los Gatos!

I've known Frank for a number of years. He's a very accomplished Realtor. Frank's an expert in investment real estate, and I'm an expert in marketing and negotiation. We looked at our two businesses and thought we could serve both of our clients at a higher level by teaming up.

You'll hear from both Frank and I in the coming months. This is only the beginning! We'll give you the latest real estate information through our video blog. If you have any questions, give us a call or send us an email. We look forward to hearing from you.

What Is the Best Time of Year to Sell Your Home?

With real estate prices peaking, many of you who are considering selling your home or moving up into a bigger one are asking “When is the best time to sell my home?” The answer to the question may surprise you.

If you’ve been waiting until the spring to list your home, you are going to want to take a look at these numbers. Redfin, the largest online real estate brokerage in the country, compiled two year’s worth of data across 19 metro markets and here is what the data says. Homes that are listed during the winter are:

  • 9% more likely to sell
  • Sell in an average of one week faster
  • Sell for 1.2% more money

This is contrary to conventional wisdom, which says that listing your home in the spring is the best time because of all the buyers that are out looking at that time of year. While it’s true that there aren’t as many buyers during the winter, the buyers that do shop in the winter are often more motivated and serious.

The buyers out looking this time of year are what we call “life event buyers.” They are people that are buying because of job relocations, deaths in the family, or the birth of a new child, among other reasons. These are people who need to buy, as opposed to most buyers during the spring and summer months who just want to buy. If you can be flexible with your timing, listing around this time of year can be of great advantage to you. 

If you’re considering selling in 2016, you may want to consider advancing your timeline to take advantage of this prime time in the market. Interest rates are also going to rise this year, which may put a dampening effect on prices.

If you would like us to evaluate your personal situation, please reach out to us. We would be happy to do a complimentary consultation, as well as an equity analysis to see how much money you have in your property that you can take on to whatever your next chapter may be. 

If you have any other questions, don’t hesitate to give us a call. We will be right here, ready to help you create a better life through real estate.

Three Things to Keep in Mind When Selecting a Mover

Today, Scott Cramer from Ace Relocation joins us to discuss three things to look for when selecting a moving company.

  1. Pay attention to the mover's reputation. Do your research. Read customer reviews, and make sure everyone that you allow into your home is on the up and up.
  2. Make sure the company has workers' compensation insurance.This ensures that if someone gets injured on the job, the company will not sue the homeowners.
  3. The mover should care. You want them to care for the home and the goods they are moving.

With Ace Relocation, the home itself will be protected by rug and hardwood floor covers, and everything will be wrapped appropriately. Anything that's breakable will be covered first with cardboard, then pad-wrapped, and then shrink-wrapped.

That's why we recommend Scott Cramer and Ace Relocation to all of our clients. Ace Relocation is a great moving company. To contact Scott, call (408) 605-7412 or email SCramer@AceRelocation.com.

As always, if you have any questions for us, give us a call or send us an email. We'd be happy to help you.