Rainmaker Properties

One of the most difficult things for home sellers to accept when pricing their Silicon Valley home is that they may need to compromise on their asking price when they list and negotiate the sale of their home.

Proper pricing, always a critical component in real estate, and one of the most critical insights a real estate agent — whether in Mountain View, Los Altos, or beyond — can provide, has become especially important today because buyers are cautious and the market is in flux.

If fact, inflexibility can lead to missed opportunities. I’ve been working with home sellers who are facing just such a situation.

After analyzing the local market and the homeowners’ goals, I thought a property in Mountain View should be listed at $1.2 million, but the owners insisted that we start at $1.35 million.

Within six weeks, we got an offer for $1,170,000. The prospective buyer was solid and I thought the offer was strong. The homeowners (lifelong Mountain View homeowners) had nearly paid off the mortgage, so they would be walking away with a respectable profit. Yet, they rejected the offer immediately. This all happened before the recent national financial crisis.

After the house sat on the market and we received no additional offers, we lowered the price to $1.3 million for six weeks. Unfortunately, this pricing strategy yielded not one offer.

We then dropped it to $1.25 million and finally received an offer for $1.15 million. The owners wouldn’t accept that price and decided to rent the house. Three applicants applied and we found one tenant that would commit to a lease. But the owners then decided to go back and try negotiating with the prospective buyer who had made the $1.15-million offer.

Eventually, both possible deals—the one with the home buyer and the prospective tenant—fell apart. The homeowners were left with no prospects for a rental and no sale.

They’re now facing a market that has gotten more difficult because of the stock market crash and the ensuing credit crunch.

Elizabeth Weintraub of About.com offers a list of pricing techniques that this owner should have heeded, but this situation also illustrates several key points to consider when you decide to sell:

1. Consult a professional REALTOR®, a real estate agent who is a member of the local association of REALTORS®, who knows the local market, for example the Silicon Valley Association of REALTORS®.  Follow the person’s advice. He or she is best prepared to properly price a property.

2. Do your own due diligence. You can find insight on pricing, how the local market is performing, and how long it typically takes to sell a property in your neighborhood by going online.

3. Be realistic when you get an offer. The emotional response is to reject a disappointing offer from the get-go. But you can negotiate and work toward a more favorable price. It’s important not to get too emotionally involved in the deal.

4. Know that in a declining market the offers may not get better. You have to really weigh your financial situation and how long you’re willing to wait for that perfect price to come in. After all, you’re likely still making money, just not as much as you once thought you would. Can you afford to put your plans on hold? If you reject an offer in hand, are you willing to risk getting an even lower offer next time?

5. You hired your REALTOR® because you had confidence in his or her abilities and the market analysis that the person presented to you. Remember that the market decides what price a house is worth, not the REALTOR®. If the listing agreement expires and you and the REALTOR® part ways, you’ll have to start from ground zero with a new REALTOR®. And that new person, after weighing current conditions, may suggest an even lower starting price than the offers you’ve already received.

6. By making impulsive decisions, you could lose valuable time and miss out on solid offers.

Enjoy this post? Get more like it by subscribing to our blog!

At my recent open house in downtown Mountain View, I was recently chatting with a real estate agent that earlier this year had been interested in joining my team, and she surprised me. I happened to ask whether she prepared brokers open houses for her two Mountain View listings, and she said, “What’s that?” Her answer was another reminder that not all real estate agents are the same.

A “brokers open,” as we Realtors call them, is an open house exclusively for brokers that takes place right after a home is listed but usually before buyers see the property. Brokers opens are an important first step in selling a home because they not only generate interest for a listing within the Realtor community, they’re also a great way to get feedback on listings.

Of course, brokers opens are useless unless brokers attend. I always have catered food at my brokers opens because the rumors are true—Realtors are always hungry, and they love free stuff. Sounds funny, but it works. I recently held a broker’s open in a great neighborhood in Mountain View bordering Los Altos area, and 30 agents come by. At another in a great downtown Mountain View location, 20 agents stopped in. And at a broker’s open in Sunnyvale, 10 agents attended. Those stats say something about which Silicon Valley markets are most active. Mountain View and Los Altos aren’t too affected by the economy, but some areas of Sunnyvale is seeing a slight slowdown in activity today.

The Washington Post has a great article commenting on how during a real estate downturn, the focus for selling homes shifts back to traditional marketing to brokers and real estate agents.

Once they’re there, real estate agents’ feedback at the brokers open house can be very helpful. I always ask, “What would you recommend with this listing?” I’ve had brokers suggest that I stage a certain room and even mention that the bathroom smelled funny (That was particularly helpful since I don’t have a great sense of smell).

I don’t change my marketing based on every suggestion. But if I get several remarks on an issue, it’s probably something I need to address. For example, if a few brokers tell me I’ve priced the property well, that reinforces my confidence. But if three or four tell me the listing is overpriced, I’ll discuss those comments with my sellers.

Enjoy this post? Get more like it by subscribing to our blog!

I received a voicemail today from an apparent nearby neighbor to my new Gest Ranch listing at 1934 Limetree Lane in Mountain View .

Here’s the transcript of the voicemail…

“This is not Gest Ranch, it is not Blossom Valley. You need to learn the area, you also need to learn how to prepare a home and how to write it up. This is appalling that in the best neighborhood of Mountain View you would write it up like this. I am astonished and I will make sure that none of the people I know will ever use you.”

The caller didn’t leave a call back number or name.

I must say I was pretty hurt by this voicemail. As most of your know my background , I take my job as a real estate professional very seriously, try to do the best that I can, and do what I can to provide Silicon Valley with a real estate company with a holistic approach to serving clients and “paying it forward” back to the community. Reputation is everything and having a woman feel this angry towards me and my services is quite upsetting.

My first reaction was to feel defensive. I wanted to give the seller a “piece of my mind” and let her know that she was the one with her facts wrong. Looking at the Santa Clara County title reports, 1934 Limetree Lane is listed in the Gest Ranch neighborhood. County title reports are not always correct, but they area usually a good reference point for real estate agents.

As for the Blossom Valley neighborhood, this neighborhood is comprised of four neighborhoods (Springer Meadows, Varsity Park, Blossom Valley Estates and Gest Ranch) fitted together on either side of Cuesta between Springer and Miramonte Avenues.

As I started to take into consideration a few more things about the angry caller’s tone in the voicemail, I came to a realization that it doesn’t matter if I was right or wrong, she was going to think the way she did and there’s nothing that I can do to stop that. The is the first hateful voicemail I’ve gotten my entire real estate career and I must say that regardless of it’s validity, this type of call sucks. I hope I won’t ever have to hear another one of these for awhile.

Enjoy this post? Get more like it by subscribing to our blog!

Nobody’s perfect, especially when it comes to pricing properties in today’s still-unsettled market.

That’s a lesson I and my sellers were reminded of when a recent sale in Mountain View came to a screeching halt because of a low appraisal. The property was townhouse near downtown Mountain View listed for $725,000 in an area in which a similar, bank-owned unit had recently sold for $660,000. When I met with the sellers, I suggested a price of $675,000 based on my analysis of recent sales, including the bank-owned unit. The sellers wanted to list their home with me, but the other two agents they’d interviewed had suggested much higher asking prices than I had. I was reluctant to take the listing at $725,000, but I agreed to give it a try.

All was going well. The photos and marketing were so strong that prospective buyers were calling off the Internet to see our “model” unit”, and the sellers received an offer for $715,000. But the smooth sale hit rocky waters when the property wouldn’t appraise for the $715,000 contract price. The buyer walked.

With the market in flux, appraisers are strictly adhering to recent sales, and the most recent sale in the downtown Mountain View area was of the bank-owned property for $660,000. That brought down the value of all the neighboring units. The sellers worked with me to come up with a new pricing strategy relisting the property at $680,000 and the sellers got three offers, eventually accepting one at their full $680,000 price.

I take some responsibility for the choppy ride during that sale. Every agent is having a hard time determining the right sales price to recommend to sellers, and I’m no different. I simply made a mistake in allowing myself to be persuaded to list this Mountain View townhouse at the higher price when I had comparable sales that pointed to a lower price. I didn’t help my clients or myself with that decision.

There’s a lesson in this saga for sellers, too. Look at the hard facts—including comparable sales—your agent presents. Remember that appraisers are scrutinizing sales closely, and they’re not budging from recent sales. So if your agent shows you recent comparable sales that don’t support the price at which you’d like to list your property, consider rethinking your price. Or be prepared if a transaction capsizes.

Enjoy this post? Get more like it by subscribing to our blog!

You’ve heard it said a million times: “That photo doesn’t do it justice.”

“It” can be a landscape, a flower, a car—even a home. That’s why it’s critical to ensure that photos of your property do your home justice. I have all my listings professionally photographed because I want as many people as possible eyeballing them. Professional photographers know how to present spaces in the most flattering light—literally and figuratively—and use wide-angle lenses so that viewers get a sense of an entire room.

Here’s an example of how much photos matter. One of my listings was a townhouse situated in the Mountain View Gardens development off of Tyrella Avenue. This townhouse was built in the early 1970s and though it was maintained quite well, the floor plan was slightly dated. With smart staging and the use of wide-angle lenses, the photos have drawn callers asking when they could see our “model home.”

A recent sale also proves the point. I was working with a couple relocating from Toronto. The husband had already moved to corporate housing in the Bay Area and was doing the legwork of looking for a home for his family. He found one he was sold on near Ponderosa Elementary School, so we e-mailed photos of the property to his wife. Based on the photos, she liked the home, too.

I drafted a contract so that when she came to town, we could schedule a showing to confirm the couple’s choice and then submit an offer. In person, however, the wife waffled. The photos hadn’t prepared her for the true condition of the home, and she asked to see more properties. The couple
ended up buying another home in Sunnyvale’s Ponderosa Park neighborhood that they’d earlier eliminated from their search on the basis of a less-savvy agent’s unflattering photos. That couple learned a lesson all buyers should keep in mind: Never fall in love with a home—or eliminate one from your search—based solely on photos.

The lesson for sellers is that buyers’ first impression of your home isn’t something you can ever get back. Be sure to choose an agent who makes sure that first impression doesn’t disappoint.

Enjoy this post? Get more like it by subscribing to our blog!