Tag Archives: Portola Valley

Playing to Win in a Multiple Offer Scenario

If the last time you bought or sold a house was several years ago or anywhere outside Silicon Valley, you may need to forget everything you know about how deals get done.  The process of making an offer, waiting for a counteroffer, and then negotiating back and forth until you come to an agreement is used about as often as a rotary telephone.

This is a more typical scenario for an attractive, well-priced house:

  1. The home goes on the market on Friday.
  2. Two open houses are held on the weekend.
  3. Offers are reviewed on the following Wednesday.
  4. There are multiple offers and the best one wins.
  5. The house goes into escrow shortly thereafter.

Whereas buying a house used to be a game of poker, the process is now played more like blitz chess. You need to have your strategy down before you play, and then you have to move fast in order to be successful.

To illustrate, here’s a recent example of how I won in a multiple offer:

I recently met a set of buyers looking to purchase a home in Los Altos.   After a little bit of searching and a Saturday open house, we found a home that the buyers fell in love with.  Unfortunately, 7 other buyers also fell in love with the home and we were looking at a cutthroat multiple offer situation.  Here is how we prepared for success:

My buyers needed a loan, but were not preapproved—an absolute essential in this market. I have a lender who works 24/7, so I connected my buyers with him on Sunday. By Monday afternoon, their loan was preapproved.

The seller of this property had already done a property inspection, but not a pest inspection. My buyers wanted their own inspections to feel comfortable making a non-contingent offer—an effective strategy in today’s market. Because I do this a lot, I have a few inspection companies who can work for me on short notice, so I was able to get both inspections done that Monday.

Lastly, we had to figure out what a winning bid would be and come up with the best offer we could make that my buyers would feel comfortable with before the Wednesday offer date. I had already done comparables on sold houses, but I also knew agents with houses that were in escrow, so I was able to get up-to-the-minute sales prices for similar houses. We looked at what was going on in the market, considered my buyers’ finances, and came up with a solid, non-contingent offer at a price we were comfortable with.

Sold! On Wednesday, there were eight offers on the house, including some all cash offers (one buyer came in with a cashier’s check).  The sellers, as is usually the case, did not issue any counter offers. And, most importantly, we won!

It’s dizzying to think that all of this happened in less than a week, but that is the nature of our market today.

To summarize:

When possible, do your due diligence ahead of time so you have peace of mind about your offer.

If you’re going to go for it, go for it. Don’t go in thinking you’ll get a second chance, because you probably won’t.  In situations such as this, it pays to have an agent with strong connections who can move quickly.

photo cropped

Playing to Win in a Multiple Offer Scenario

If the last time you bought or sold a house was several years ago or anywhere outside Silicon Valley, you may need to forget everything you know about how deals get done.  The process of making an offer, waiting for a counteroffer, and then negotiating back and forth until you come to an agreement is used about as often as a rotary telephone.

This is a more typical scenario for an attractive, well-priced house:

  1. The home goes on the market on Friday.
  2. Two open houses are held on the weekend.
  3. Offers are reviewed on the following Wednesday.
  4. There are multiple offers and the best one wins.
  5. The house goes into escrow shortly thereafter.

Whereas buying a house used to be a game of poker, the process is now played more like blitz chess. You need to have your strategy down before you play, and then you have to move fast in order to be successful.

To illustrate, here’s a recent example of how I won in a multiple offer:

I recently met a set of buyers looking to purchase a home in Los Altos.   After a little bit of searching and a Saturday open house, we found a home that the buyers fell in love with.  Unfortunately, 7 other buyers also fell in love with the home and we were looking at a cutthroat multiple offer situation.  Here is how we prepared for success:

My buyers needed a loan, but were not preapproved—an absolute essential in this market. I have a lender who works 24/7, so I connected my buyers with him on Sunday. By Monday afternoon, their loan was preapproved.

The seller of this property had already done a property inspection, but not a pest inspection. My buyers wanted their own inspections to feel comfortable making a non-contingent offer—an effective strategy in today’s market. Because I do this a lot, I have a few inspection companies who can work for me on short notice, so I was able to get both inspections done that Monday.

Lastly, we had to figure out what a winning bid would be and come up with the best offer we could make that my buyers would feel comfortable with before the Wednesday offer date. I had already done comparables on sold houses, but I also knew agents with houses that were in escrow, so I was able to get up-to-the-minute sales prices for similar houses. We looked at what was going on in the market, considered my buyers’ finances, and came up with a solid, non-contingent offer at a price we were comfortable with.

Sold! On Wednesday, there were eight offers on the house, including some all cash offers (one buyer came in with a cashier’s check).  The sellers, as is usually the case, did not issue any counter offers. And, most importantly, we won!

It’s dizzying to think that all of this happened in less than a week, but that is the nature of our market today.

To summarize:

When possible, do your due diligence ahead of time so you have peace of mind about your offer.

If you’re going to go for it, go for it. Don’t go in thinking you’ll get a second chance, because you probably won’t.  In situations such as this, it pays to have an agent with strong connections who can move quickly.

A Realtor Buys a House, Part 5 – The Ones That Got Away

One of the ways you learn a lot about what you want, because
they are hard lessons, is when you look back at homes that sell that you didn’t
make offers on or get. When you find yourself saying weeks or months later “I
wish we had bought that house”, it crystallizes what is important in your mind.

First there was the house on Brookside Drive in Portola
Valley that bordered a creek. My wife fell in love with the master bath that
had a fireplace, the sliding doors overlooking the creek and the hickory
floors. It had kind of a weird floorplan, but it would have worked for us, the
location was great (this was pre-Woodside requirement), and there was room to
add to the garage (see previous post on criteria). The big wine chiller in the
kitchen didn’t hurt either. We were quite ready on the loan side, so when it
sold in a week with four offers, we sighed and decided to focus on that
neighborhood as a good one, and took away a lot of good ideas for our next
home. 4 out of 5 of our eventual criteria.

Then we saw this one in Woodside Glens last winter. Totally
remodeled, it had 3 of our eventual 5 criteria. It was remodeled about 10 years
ago, was funky in a way we could work with, and utilized the 7500sf lot well.
It lacked the privacy I wanted, even with a stockade fence and gate in the
front, and the garage was unusable for a car, let alone a car and small SUV.
The crawlspace had been built out into a media / storage room, and we went back
three times trying to convince ourselves that it was worth $2M to us.
Eventually, someone else decided it was worth that to them and put us out of
our misery.

This house broke our hearts. A little above our stretch
number with some issues involving water under the slab foundation and some
imposing cracks in the framing that had been patched and painted. It’s on a
half acre with an unobstructed view of Windy Hill in a great setting. The house
is an open mid-century modern (think Eichler) which my wife really likes. My
in-laws came along because they are house junkies, and as we sat at the table
on the patio and looked at the view, my father in law looked at me and said “You
should buy this house. We will help you.” Gulp. As we looked reports and I
bugged contractors and engineers to figure out how long before it fell down
without major structural and drainage work, someone with more money paid full
price and cash. I think we dodged a bullet, but it was really cool. Did I
mention that in the disclosures the sellers mentioned that during heavy rains
water ran out of the hood over the stove? Whew…..VERY cool house though.

This last one was back in The Glens of Woodside. Still for
sale, it has big interior spaces, a great setting and three bedrooms plus an
office. The garage has been converted into a guest quarters with kitchenette
and a full bath. Not great as a garage anymore because you can’t fit two cars
in it (see our criteria), but potentially a neat man cave. Recessed lighting in
the garage? Works for me….. It is on the One Way part of Hillside and you can’t
see the yard from the house really. If we didn’t have kids, I think we would
have been all over this house. It has a really private setting and the
neighbors are great. Someone will really like it.

If you have read thus far, thank you and I hope you are
finding the series entertaining. As you can see, this has been a long search,
so agents don’t have a magic wand for finding great houses that consumers won’t
know about. We spent two years on this odyssey, so have patience if you are
looking. Most of my clients are in something in about 6 months. The fastest was
three days, the slowest 18 months.

Thanks for reading…..

A Realtor Buys a House, Part 4 – The Must Have List

We currently live in a 3 bedroom tract house that was built
in 1953, probably in about a week. It was great when I was one of four people
bidding on it when I was single. The “two car” garage that barely held a
compact car and motorcycle was sufficient for my needs, and initially I didn’t think the
tiny bathrooms and the dark, galley style kitchen were that objectionable. I
had plans to remodel the kitchen and open up a wall to the living room anyway.
The yard was fine, it had some fruit trees and it wasn’t too much to maintain.

Over the last 6 years a few things bugged me more and more,
like a pebble in your shoe, so when we decided it was time to move, I made a
list of Must Haves, things I wouldn’t compromise on.

· 
Larger yard, 1/4 acre minimum

· 
True 2 car garage, 3 cars preferable (it’s amazing how much stuff a baby has and the car required to haul it all!)

· 
3 bedroom minimum, preferable 4

· 
Good floorplan

· 
No weird geological issues, slopes, etc.

· 
Late in the game, my wife added “Walk to downtown
Woodside”.

Seems pretty easy, right? Ha!

The last one is a killer. The south side of Woodside Road in
Woodside is where you find Larry Ellison’s Japanese village, Tom Siebel, Michelle
Pfeiffer and Charles Schwab. A nice neighborhood, but a little out of our price
range. The other side isn’t much better with horse properties and multi-acre
estates starting in the $5M range. Then there is “The Glens” with all kinds of
interesting homes that were originally built as various lodges and vacation homes for people from San Francisco.
The geology of the Glens is pretty wild, with lots of creeks, rock formations,
narrow little ravines, and narrow, winding streets. Suburbia it isn’t. It is a
very closely knit neighborhood and Halloween there is fantastic.

When you make your must have list, you need to write it down
and carry it through every house. It will save you from yourself. We looked at
a house three times that was 1 for 6 on that list trying to talk ourselves into
it because it was a good location and we liked some of the aesthetics and finishes. It would have
been a disaster. All it had was walk to town.

So – sit down when you aren’t in the heat of the moment,
make your “Must-Have” list and stick to it. No matter how cute the kitchen in
the two bedroom place is, if you need three, walk away.

Thanks for reading……..

A Realtor Buys a House – A New Dad’s Journey Through Hell – Part 1
A Realtor Buys a House, Part 2 – Laying the Groundwork

A Realtor Buys a House, Part 2 – Laying the Groundwork

As I mentioned in my last post, my wife and I have been
looking for a house in Woodside or Portola Valley on and off for a couple of
years. Through a lengthy process (and my work selling homes in that market), we
have gotten a good feel for the benefits and drawbacks of locations, likely
inventory, what is realistic given our budget, and a whole bunch of other
insight that my clients depend on me to provide. It has been interesting to see
my wife experience what I do with and for clients firsthand as she is now
basically a client and is going through all the joy and heartbreak of hunting
for “an upgrade home” in a new area (for her).

When I have mentioned that we were looking in the area,
several of my clients reacted with concern that we were going to use some
Realtor magic to buy all the “good” houses before they could see them. We are a
family of two adults, a baby and two cats. I don’t know how many houses most
people need to hold that, but one house seems sufficient to us, and a rather
small one at that.

Guess what? We used the same approach that I use with all my
clients. We went to open houses, I looked at houses on brokers’ tour, we drove
around a lot, went to Buck’s for lunch, shopped at both Roberts markets and
hiked in windy hill. I have ridden my bike so many miles in Portola Valley and
Woodside that I have probably worn a groove in the shoulder, and I have managed
to ride “the loop” from memory in the dark without a light when my bike
headlight died at 6am on a dark December morning, in the rain. So, we know the
area.

When you are planning to move to a new area, be it down the
road or across the country, spend time there. Eat at the restaurants, shop at
the local market, figure out where you would get your hair cut and wash your
car. Wander the neighborhood on foot and when you meet people, tell them that
you are considering moving to their neighborhood and ask why they live there,
how they like it, etc. You will be amazed what they tell you. Visit the school.
The principal will be happy to show you around.

Along the way, talk with your Realtor (or call me!), and
learn about what that house you visited last month at the open house sold for,
and why the other one didn’t sell.

By the time we made the offer on the house we are buying, my
wife knew all the sales in the neighborhood over the previous two years (all
six of them), had been in most of the houses, and could explain why she wished
we had bought one of them, why she was only willing to pay $200,000 less than
the people who bought another one, and why she wouldn’t want the other four at
any price. The take away quote that told me she really knew the market was when
she summed up one house with: “I wouldn’t buy it, but I’d love to rent it for a
year”.

A home purchase is a big deal, do your homework, even if
your husband is a real estate agent.

Thanks for reading…..

A Realtor Buys a House – A New Dad’s Journey Through Hell – Part 1

Where Do I Go?

Where Do I Go?

The popular topic in the local real estate community is the
ongoing lack of inventory of homes for sale. According to our local MLS, the
number of homes for sale in our local market (Palo Alto, Menlo Park, Atherton,
Portola Valley, Woodside) is down 40% – 60% versus this time a year ago,
depending on the price point and neighborhood. Since our are generally has
fewer homes for sale relative to the number of homes and buyers, this inventory
decrease translates to it feeling like there is NOTHING for sale, and multiple
offers on the few homes available are the norm, not the exception.

Adding to this, with the phenomenon of overseas buyers and
recent liquidity events and stock run ups for local companies, we are seeing
more wealth and resources available to purchase homes than ever before. This is
like adding gasoline to the proverbial fire, and driving prices upward at
impressive rates. Check out these charts, showing changes in median home prices
(half of the houses sold for more, half for less) in our communities over the
past year. Palo Alto up 20% 2011 to 2012, Menlo Park 11%, Woodside down 10%
(I’ll come back to that), and Portola Valley up 13%.

That’s better than the NYSE which is up 12.9% over the same
period, and you get a place to keep your stuff too.

So let’s assume you have been sitting in your house in North
Palo Alto for the last few years while your kids finish High School, watching
houses around you sell in a week at prices you can’t believe. You come home,
realize you don’t need a four bedroom house and the property taxes and say to
yourself “Self, let’s cash out!” (Actual clients’ example here). Your next step
would be to call me and say ‘Chris, what is my house worth?’. I’d give you a
range (say $3M – $3.2M) and you would say ‘wow, that’s like $500,000 – $700,000
more than I paid for it in 2006’ or something like that. Then you would ask me
the hard question:

Where do I go?

So you sell your house in Palo Alto and pocket a $500,000
net gain after selling costs, plus your original equity and you are going to
downsize to a three bedroom house. The kids are in college so schools don’t
matter much but you don’t want to move to Napa. Your new budget is $2M so your
property taxes will be lower and your mortgage is something you can pay off
before retirement.

Woodside:

OK, I’m biased as I am currently buying a home in Woodside.
Why? Read my other blog article “A Realtor Buys a House”. For our
fictional couple here, it’s close enough to all the fun stuff you did in Palo
Alto, the market isn’t as tilted in favor of sellers (prices down 10% last
year), and you get some land or a view depending on where you are in town. If
you have little ones, Woodside Elementary School is fantastic. Woodside Bakery
and Buck’s are experiences in and of themselves. Bring your horse.

Ladera
Ranch:

Ladera is really unincorporated San Mateo County, but it is
a closely knit community border Portola Valley with off-street walking paths
leading down to the shopping center and a community center with pool and tennis
courts, so it combines the best of rural and suburban living. Many of the homes
have views and the neighborhood feeds into the excellent Los Lomitas schools.
Convenient to 280 and open space preserves.

Portola
Valley:

Extra space and views of the Bay or open space are hallmarks
of Portola Valley. The small town vibe and peaceful feeling make it an escape
from the madness that defines most of Silicon Valley. Generally, there are more
bikes than cars and the open spaces define the views and feeling. If you feel
like Woodside is getting too uppity and flashy (the locals say too Palo Alto),
then PV is the place.

Emerald
Hills:

Views on a budget. Roy Cloud Elementary is excellent and the
market and prices make for a great downsizing option. You are car dependent,
and the narrow, winding roads will have you trading the Suburban for a Vespa.
If you like Tuscan hill towns, Emerald Hills may be just your thing.

Redwood City:

Redwood City is the largest city on the Peninsula and where
I think the biggest potential for appreciation is. Prices are relatively low
compared to the surrounding cities, and Redwood City has invested heavily in  an urban renewal of its downtown that is
drawing more business to restaurants, The Fox Theatre and the Cineplex. As we
have seen in Mountain View over the past 20 years, an attractive, bustling
downtown leads to gentrification which leads to rising property values. Redwood
City, especially neighborhoods like Mount Carmel, is my appreciation pick for
the next decade.