How NOT to Do It

So I sold my listing on Burbank in San Mateo yesterday and in the process had quite an amazing experience. I had given out 17 disclosures to interested parties and, as you might be able to guess, we got multiple offers. The experience I’m referring to came after I met a nice couple at the last open house on Sunday. They requested the disclosures on Sunday night and I get a call from the guy at about 1:10 on Monday informing me that he would like to put in an offer. Offers were due at 1:00. He proceeds to tell me that he hasn’t quite squared away their financing and asked if he could get his offer to me by 7:00 or 8:00 that evening. Offers were due at 1:00. Naturally…some questions came to my mind.

1) Do you have an agent?

He answered that he didn’t but would be writing the offer himself.

2) Are you a lawyer? A licensed Real Estate agent?

He said no…but he bought another house once this way. Back east someplace.

3) How are you going to find the necessary forms to accomplish this offer?

He said he would be able to download some online someplace.

4) Have you read the disclosures?

He said that he hadn’t but he would have 2 weeks to do that inside his contingency and after he did his own inspections.

5) Are you completely out of your tiny little pea sized mind?

He said that he wasn’t. He also told me he wanted to write a full price offer and leverage the commission (he thought it was $50,000) toward making his offer more attractive.

Seriously…let’s summarize. Here’s a buyer with absolutely no experience at all in real estate in this area wanting to write his own offer in an environment that he knows nothing about. He wants to write a full price offer and leverage the commission which he thinks is 6%. It’s actually a total of 5% and 2.5% is mine…so he apparently wants me to sell the house for free so he can get the house. His offer would be written with long contingencies and a desire to do his own inspections (even though he doesn’t know any local inspectors…I guess he’ll find them online too). Since he doesn’t have access to the approved local contracts he’s going to write his offer on some generic document that may or may not apply to this area’s laws and customs.

I ended up with 7 offers on that house and all 7 were over asking. 6 were As Is with no contingencies of any kind. The house sold $135,000 over asking.

OK, this is rare…thankfully!! Real Estate needs one of those dangerous activity disclaimers posted at open houses. Such as:

Real Estate is an inherently dangerous activity and should be performed only with the proper instruction and supervision of an experienced person. The agent and seller of this home assume no responsibility for any stupid mistakes incurred by the reader!

 

 

And We Have a Winner….

Well, I predicted, and not that long ago, that we would see a townhouse in Foster City close escrow at or over $1,000,000. It’s June 18…and it happened today. Now I’m not talking about Promontory Point where that’s happened before…I’m talking about the other projects in town. Projects that were hard to sell just a few years ago.

Today we witnessed the closing of 1028 Gull at Bay Vista. Pictured above. It was listed for $949,000 and closed at $,1,035,000. It’s a 4 bedroom, 2.5 bath townhouse in 1757 sq ft. The dues at Bay Vista are $235 a month. To me that’s obviously a contributing factor. This unit previously sold in 2001 for $482,000. Not bad , huh? Now the question becomes…when will smaller 3 bedroom units go over a million? How does that effect waterfront units at Isle Cove or Harborside?

Remember…the market has slowed down a little. Still, we have this happen. What an amazing place this is!

 

Over The Top

If there’s anything that will eventually hurt this market it may just be the unbridled greed that some sellers are showing lately.  Understandably, there are sellers out there that have heard all about the multiple offer, enormous overbid insanity that’s permeated the market this year and want that experience for themselves. I get that. What I’ve been hearing though takes things way over the top…in my opinion.

There are folks out there who put their homes on the market and feel entitled to a huge overbid. No matter how crumby their house is or how grossly overpriced it was to begin with. I heard an example of this the other day in San Carlos where a house came on the market on a small 400 sq ft lot, needing lots of work and only 1300 sq ft. It was listed for just under $1,200,000. Unfortunately for the sellers, they didn’t get the offers they were expecting. In fact they didn’t get an offer. When one eventually did come in it was $40,000 under asking (about what it was really worth!). The sellers wanted to counter at $1,300,000. After all…they were entitled to an overbid like that, right? I mean, how dare the market not anoint their house like it did with others.

I’ve heard this a few time this year. I’ve actually heard it in scenarios where there actually was multiple offers and the price went more than $200,000 over asking. The sellers were disappointed…because they expected $300,000 over asking!

If you’re thinking of selling…here’s some simple rules:

1) You are NOT entitled to overbids

2) If you’re lucky and you prepare correctly you MIGHT get them.

3) Your overbids may NOT be $500,000 over asking…be prepared.

4) The market is telling you what the house is worth…no matter what you get.

5) If you get a nice clean offer you probably did great.

6) If you sell your house for 20% more than the last comparable sale for your floor plan but the buyers don’t offer you free rent…that’s OK. You did great. Really.

Simple rules.

The Million Dollar Townhouse

The title above says it…but I’m sure plenty of you (me too!) can’t quite wrap our heads around it. That’s the prospect of townhouses in Foster City selling routinely for $1,000,000. Surely you jest you say! I clearly remember selling a townhouse on Juno Lane in Isle Cove that we listed for $395,000 and got the astonishing price of $402,000 for. We were absolutely amazed and I recall a neighbor being sort of annoyed with me because he thought we were crazy to be asking such an outrageous sum as $395,000 in the first place. I was clearly an idiot in his eyes.

Now we’re seriously looking at those same townhouses approaching the 1 million dollar mark…and I don’t think it’ll be long until that happens. Of course they’re already there at Promontory Point…but I’m not talking about Promontory Point! I’m talking about Winston Square and Bayfront Court and Bay Vista and Treasure Isle. Don’t believe me? Since the first of 2014 two units have gone over $900,000. A waterfront at 1115 Lord Ivelson sold for $930,000 (but the waterfront thing is sort of expected) and a unit in Treasure Isle at $728 Chebec that was listed for $868,000 sold for $955,000. That’s NON WATERFRONT townhouses.

Right now we have pending sales at 845 Balboa (Water…listed for $899,888), 391 Catamaran (No water…listed for $865,000) and 881 Cabot (no water…listed for $858,888). They’re all going to close over asking. I can’t wait to see where. It might not be this month or next…but sometime this year we’ll see a closing at or over a million for one of these townhouses. That’s absolutely freaking unbelievable! What’s more incredible though is the fact that we’ll get used to it and the standard for townhouses will be a million dollars. Just like the standard for single family homes is now about $1,300,000 in Foster City. You can be sure I’ll report on the first one that does…and don’t be surprised if it’s sooner rather than later.

 

Hitting Them Where They Ain’t

It’s an old baseball expression. Willie Keeler played from 1892 to 1910 and had an amazing career batting average of .341. When asked to offer advice to young hitters Keeler said “Hit em where they ain’t”. Simple huh? Easier said than done too.

So yesterday I started to think about the transactions I completed this year and I can’t tell you how grateful I’ve been to have had a good number of listings in 2013. 14 out of the 24 deals I had were listings. Lots of agents I know that didn’t have listings had a terrible year. Of the 24 sales 18 of them were in multiple offer situations. That leaves 6 that weren’t and the more I thought about that…and those clients I realized that in 5 of those 6 cases the buyers who got them hit them where they ain’t. In other words they had no competition and just by staying on top of the market and it’s inventory these buyers won the day. There were many circumstances, deals that had fallen apart leaving the listing back on the market again, a better house a few blocks away that drew buyers attention to this not quite as good house and just plain luck in the seller didn’t want to wait to look at offers. The point is that there ARE homes out there selling without a feeding frenzy, in decent locations and that are good deals…if you’re diligent, patient and ON TOP OF THE MARKET.

I think that’s a very important point. You need to be constantly analyzing the inventory and market data to accomplish this. Obviously a good agent can help you with this, but don’t get frustrated an quit because you’ve written 17 offers in competition and missed on them all. It’ll happen…look for ways to hit en where they aint.

 

What a Business!

This real estate thing is such and amazing business. Sometimes it seems that anybody can do it, huh? Well, almost anybody. One who doesn’t seem able to do it is actually on the market now on Tiller in Bayfront Court. It’s a short sale priced at $775,000…which is interesting since the most money paid for this floor plan came earlier this year at $828,000. Another unit sold for $800,000. Since short sales are such a huge pain $775,000 doesn’t seem like a big discount to me…but what do I know. To make it more fun there’s a few more details of it’s listing salability that I couldn’t help notice and remark on.

1. It’s listed as a single family home instead of a townhouse…which it is

2. The listing is offering a total of 1% commission to the buyers agent

3. There’s only one photo in the MLS and it’s of the open garage doors

4. It’s tenant occupied and there’s no lock box

5. The listing agent is in Los Angeles

A short sale with all of these marketing features. Oy! This is really going to be interesting to watch.

Reversion

Well, we’ve actually regressed. OK, the year is winding down and all that but as it’s gotten a little slower I would have expected that the level of inventory would have risen. Fat chance! This doesn’t bode particularly well for 2014 by the way. As of tonight there’s a whopping 4 active single family houses listed in Foster City. The lowest priced one is the place pictured above at 508 Gibraltar. It’s 3 bedroom, 2.5 bath house listed for $1,188,000. Offers are tomorrow. It’s almost unimaginable to me that we’ve gone so long now with such little inventory. Making it even weirder, there’s 5 condo/townhouses on the market. Huh?

Even with the market ebbs and flows there just doesn’t seem to be any way for values to flatten or fall if there’s this low amount of inventory consistently. If you’re a homeowner considering selling this is pretty good news for you. It’s not particularly great if you want to move up and stay here but it’s still better than buyers moving in here. It’s most likely going to continue to be competitive.

How High is High?

Now admit it…sometimes buying a house around here feels a lot like this guy feels pictured above. Probably scarier actually. The question is…how high can it go? I said houses…that goes just as well for condos and townhouses right now. Earlier this year I had planned on listing the townhouse at 808 Volans for $699,000. That was in February. My client had a change of mind and decided to wait. When they were ready to go in September we listed for $789,000. We got multiple offers and it went well over that. When it closes it’ll represent by far the most money ever spent for a non water front unit in Isle Cove. Amazing! How high can it go there. Heck a water front townhouse at Isle Cove just closed for $930,000!

I still can’t get over how long it’s been since a single family house sold for less than $1,000,000. Actually it was July 10 at $850 Pollux. Incredible! I swear it really seems like yesterday that the vast majority of single family homes sold under $1mil. I don’t have an answer for how and when and why it stops…or even slows down significantly. I’m really not sure it’s EVER going to really depreciate. I don’t believe our market is a bubble. everybody has significant downpayment…we’re just not going to get a bunch of short sales and foreclosures from this crop. I guess we’ll just have to wait and see.

The Swami Knows

There’s been this funny and somewhat new phenomenon that I keep experiencing. People, particularly those that I meet at Open Houses I’m holding seem to think I know stuff. Actually they probably aren’t too sure about whether I know stuff about the things that I really do know stuff…but they’re certain that I know things about stuff that I have no clue about. Make sense? Simple right?

I guess what I mean is that folks ask me questions about the market, or the property in question, or the project the property is in and even though I do indeed have the answers they’re sort of suspect of me. I’m a realtor after all. A salesperson. Obviously what I say is met with some suspicion? What’s funny though is this question that I seem to be getting a lot on my listings:

” How much do you anticipate this place is going to sell for?”

Over at my listing at 808 Volans in Isle Cove I had this question twice on Saturday alone. In answer to that I said:

” I have no idea”. To which the buyers look at me with incredulity and, after a pause, said “Oh, come on…you MUST know what this place will sell for!”

Umm…No, I don’t have a crystal ball and I’m not a Swami. I have no ability to predict the future or do I have any idea whatsoever what interested buyers that I don’t know are thinking about writing on my listing. Honest. I’ll say it again…I do not have supernatural powers that allow me to know these details. Sorry.

Maybe it’s my ever increasing gray hair? Maybe it’s because some folks in FC read this blog? Whatever it is some of these folks have some certainty that I know stuff like this. I really don’t. In fact I’ve had a bunch of listings this year and I think I guessed wrong on just about all of them. It’s kind of a nice thing when it’s your listing your wrong about…and the price goes way over your expectations.

Here’s something else I’m just about positive about. None of those other listing agents have any clue either. I’m reasonably safe in saying that the agent at 294 Devonshire in San Carlos didn’t predict her $998,000 2 bedroom listing would get an offer of $1,630,000. Everybody’s surprised by this kooky market.

 

Who Knows?

 

 

I’ve been a realtor around here for 23 years. In many ways I have a clue. I have a bunch of experience actually and that’s quite often helpful to my clients. I know a whole lot of other experienced agents around these parts too and they have sort of a clue as well. Wouldn’t you think that experience would count for something? I’m joking around here…for the most part. What’s confounding me lately is knowing what to tell a buyer about what to offer in a multiple offer scenario. I have to tell you the truth. Most of the time I really have no clue. You know what else? I don’t really know ANYBODY that really does either. I heard one agent say that you just pick a dollar amount that seems really preposterous…and then DOUBLE IT. I’m not sure if he was joking or not?

A couple of weeks ago I advised some clients that the 2 bedroom, 1 bath house on the 16,000 sq ft lot on Devonshire in San Carlos. It was listed for $998,000. I thought it would go way over asking and told them my bet was $1,250,000. My clients were afraid of going that high so we wrote a lower offer. The house sold for $1,630,000…cash. Go figure! A couple of days ago a large 3 bedroom house on Bennington on San Mateo came up listed for $1,495,000. It was a big house though…so what if nothing has sold up there EVER for anywhere near that price. It ended up selling for $1,625,000…cash. Again.

I myself had a little 2 bedroom, 1 bath listing on Sylvan in San Carlos a few weeks ago. The most money ever spent for this floorplan? $725,000…and that was a month ago! We got $787,000. Again…go figure! Is there a point? Who knows is the point. that joke my coworker made is pretty much true. Think of a really ridiculous offer price…and double it!