Silicon Valley has been in a deep seller’s market for over two years now, which makes it an ideal time to sell real estate here in Santa Clara County (and San Mateo County). However, there are a lot of misconceptions about this market and some of them are extremely common, but if you believe these home selling myths, it could cost you. Here are 5 home selling myths that I run into most often.
Silicon Valley Home Selling Myth # 1: Every home will sell, and sell quickly, no matter what
One of the biggest and most dangerous Silicon Valley home selling myths in 2015 is that the real estate market in Silicon Valley is so skewed into the seller’s favor that every home will sell, no matter what, and that it will sell fast. This is just not true. And if you believe that, the rest of the myths are likely to be a part of your package, too.
What does the data actually tell us?
As of right now, there are 1084 single family homes for sale and not under contract (not pending) in Santa Clara County. Of those, 213 have been on the market for more than 60 days. That’s 20%, or 1 in 5, that did not sell in any kind of a reasonable time frame! (Further, there are 49 which remain unsold after 180 days.)
After looking at these numbers, I wondered if it’s just really expensive houses with an unsold population. So I pulled the same data but considered only properties with a list price of at least $3,000,000. The number of homes available right now with those higher price tags is 136 in the county. Of them, 22 are still on the market after 60 days. Surprisingly, the rate of non selling within 2 months is just 16% for this group.
If you live in a more typically priced home, consider that 1 in 5 will not sell within 60 days. Having an 80% statistical probability of selling within 2 months is pretty darned good – the rest of the country would be envious. But as locals know, your best shot at selling with multiple offers and those highly prized overbids comes at 1-3 weeks, not within the lower bar of 60 days.
Silicon Valley Home Selling Myth # 2: Home sellers need to have a secret or unique way of marketing to Chinese home buyers
The impact of Chinese home buyers on the Silicon Valley real estate market is huge. A month or two ago I heard that 30% of all sales were all cash, no loan, and of those, 80% were from Chinese home buyers.
Every home seller would prefer an all cash deal, because that means no issues with either a bank or an appraiser. The less complicated a sale is, the more likely it is to close without incident.
For those buyers coming from mainland China, it is true that they have limited access to some of the websites that promote real property sales here in the states. However, they aren’t buying homes or investment properties in a void and without a real estate sales person’s assistance here. Their Realtor has full access to the multiple listing service (MLS) and can, in turn, get that info to his or her buyers.
In other words, if your house or condo is listed for sale on the MLS, all those Chinese buyers will have access to it too – if not directly, then through their agents. The MLS remains the very best way to reach everyone you want to reach with the information and photos on your property.
Silicon Valley Home Selling Myth # 3: It doesn’t matter if the marketing is any good, buyers are buying everything
I cringe when I see the MLS photos that some real estate professionals use to market their listings – and I wonder why the home owners do not object. Ditto that with the mls comments which are full of typos, spelling errors, or simply say nothing concretely interesting or compelling about the home.
The photographs are perhaps the most important marketing element, after only correct pricing. This collection of images is really your first open house! If the images are bad, the buyers are far less likely to come to check it out. So declutter the kitchen counter before the shots are taken. Close the toilet lid. Turn on the lights. And hire an agent willing to pay the $200 – $400 to make the images the best they can be. This is no place to cut corners!
Comments on the mls need to be persuasive. Don’t say “wonderful kitchen”. Name the specific elements that make the kitchen wonderful, like a skylight, an island, a 6 burner gas range (and name the brand). The description is far more gripping when it’s specific.
Home sellers, when you interview Realtors to list your home, please make sure that the photos will be taken professionally. Make sure that the text being used is detailed and intriguing. Ask to see it before it goes live, if possible. And check it out once published to make sure it’s both good and accurate.
I should add that where you price your home is also a marketing element. Price it too high, and your appropriate buyer will never see it. Price it too low and you may get a ton of offers which will push it way over its probable market value.
If you want to sell for top dollar, and not just sell, these elements are critical to your success.
Silicon Valley Home Selling Myth # 4: Every listing sells with multiple offers
The homes which sell with multiple offers usually do so within 10 or 12 days of going on the market. After 21 days, the odds of getting more than one offer and once fall through the floor dramatically. As you read in Myth #1 above, at least 1 in 5 homes doesn’t sell within even 2 months. What about the rest? Our mls does not currently tell us which properties sold with multiple offers, but we can make a reasonable guess based on the days on market.
Right now in Santa Clara County, there are 1301 single family homes either active contingent (meaning under contract with some sort of buyer contingency still in place) or pending (meaning it looks sure to close). Of the 1301 under contract homes, 354 (27%) had days on market longer then 21, so unlikely to have sold with multiples. 853 houses sold in 15 days or less, so most probably did get more than one offer (that would be 66%). Depending on the area, price point, school district, condition, and the aggressiveness of the pricing, it’s fair to say that if home sellers do everything right, the odds are good of the home selling within a week or two of going on the active market, and if that happens, the odds are also good of getting multiple offers. But it’s not guaranteed and does not happen to a significant portion of the listed properties.
Silicon Valley Home Selling Myth # 5: All listing agents and brokerages do the same thing, the same way, so it makes sense to hire the cheapest person (and offer a low broker cooperating commission, too)
This may be the most crucial element of all – whom you hire – because if you work with someone who is not knowledgeable, experienced, good at marketing, and good at negotiating, the home may not be positioned or marketed to get your place sold fast and for top dollar. This myth, if believed, will really cost you in the long run!
You will have no trouble locating a real estate sales person who can list and promise to sell your home for a low cost (meaning his or her portion and also the buyer’s agent portion). Before doing that, though, please consider that all agents are not created equally. Some things to consider:
- How knowledgeable is the sales person about your home’s area? (Or will he or she list anything in the 9 county Bay Area or beyond?)
- How experienced is the agent in your property’s price point? If it’s a luxury home, has the agent ever sold one before?
- How long has he or she been licensed and full time?
- How many sales has the realty professional had career wide? How about in the last year or two?
- How are the marketing pieces (fliers, mls description, photos) of other listings that he or she has sold?
- How fast do his or her listings sell, and what’s the sale price to list price ratio?
- Does that agent have good testimonials on his or her site, or reviews? What happens if you google that person’s name?
- Can your Realtor work with both the CAR and PRDS set of forms?
- Does he or she have extra training and stay current?
In truth, all Realtors or real estate sales people are not the same either in style or substance. Some have loads of experience and can deliver a high quality experience both to you and to the public being marketed. Others don’t know what they are doing, cannot negotiate with you to get the price right or to offer a decent commission to the cooperating buyer’s agent, and then cannot negotiate with the public to get the home sold. (If you can run over your listing agent, guess what? So can other agents.)
You don’t want an order taker who just does whatever you tell him or her to do. Your chosen agent needs to be your advocate. He or she needs to be able to tell you the truth about your home’s likelihood of selling at any given price or condition. That sales person needs to get you to do things you won’t want to do, like declutter, paint, carpet, and pay for presale inspections. If you don’t hire someone who can give you excellent guidance that you will heed, you really shoot yourself in the foot.
To recap, it’s a great time to sell, but to maximize your return on investment and to get the most out of your home sale, you do need to be proactive and involved every step of the way in the marketing and sale of your property. Don’t be a sucker for any of these common myths, which can really cost you.