Silicon Valley has been in a deep seller’s market for years now, so it’s an ideal time to sell real estate here in Santa Clara County (and San Mateo County). There are many misconceptions about this market, some of which are extremely common – however if you believe these home selling myths, it could cost you. Here are the 5 home selling myths that we see often.
5 Silicon Valley Home Selling Myths
Myth # 1: Every home will sell, and quickly, no matter what
One of the biggest and most dangerous Silicon Valley home selling myths we see most frequently is that the real estate market in Silicon Valley is so strongly 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 you may have fallen for some other myths on our list, too.
What does the data actually tell us?
As of right now, there are 660 single family homes for sale and not under contract (not pending or contingent) in Santa Clara County. Of those, 214 have been on the market for more than 60 days. That’s over 32%, nearly 1-in-3, that did not sell in a reasonable time frame! (Further, there are 41 which remain unsold after 180 days!)
After looking at these numbers, I wondered: is it just really expensive homes that are selling this slowly? The top price points usually take longer to sell, so is that skewing the overall trends?
Well, I pulled the data again to see, this time limiting it to properties with a list price of $4,000,000 and up (the luxury market). The number of homes available right now in that luxury price tag is 123 in the county. Of them, 59 are still on the market after 60 days, so the rate of non selling within 2 months is about 48% for this group, or about 15%-16% higher than the overall market.
So let’s look at homes offered below $4,000,000. Of the 537 homes in this price group 156 have been listed for over 60 days. That’s still 29% of the market! And if I limit my search to homes listed between $1,000,000 – $2,500,000 the result is about the same, 30% of available listings have remained on the market over 60 days.
And for those listings that remain on the market longer the outlook is grim. In Santa Clara County, 1190 properties have sold over the last 60 days. Of those, 79 properties took 60 or more days to sell, just 6% of sales. This indicates if a home doesn’t sell in the first 60 days, it’s chances of selling are extremely slim!
Having over a 60% statistical probability of selling within 2 months is pretty darned good, especially this late in the year – 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.
Myth # 2: Home sellers need to have a secret or unique way of marketing to developer / Chinese / tech / [insert group here] home buyers
Two things should be addressed upfront with this myth: #1 California has some of the most comprehensive anti-discrimination law of any state as it pertains to realty and housing, and #2 many sellers who fall for this myth are targeting a certain type of buyer because they believe it will get them something else that is more valuable.
Seller’s “target buyers” have changed over the years. For instance, in the aftermath of the 2008 financial crisis, the 2010s real estate market here in Silicon Valley experienced a surge of overseas investors. Back in 2015 we were hearing things like 30% of all sales were all cash (no loan) and of those, 80% were from Chinese home buyers.
Practically every home seller would prefer an all cash deal, because that means no risk of issues with either a bank or an appraiser. The less complicated a sale is, the more likely it is to close without incident.
So inevitably in the 2010s we heard talk about strategies and techniques to target Chinese buyers. However, for the most part, those “secret techniques” were gimics.
These targeted groups don’t buy homes or investment properties in a void, or off some secret black market! These buyers, like most “target buyers” before or since, are most often doing so with the assistance of a licensed real estate sales person with full access to the multiple listing service (MLS) helping them identify the listings that will best fit their needs.
In other words, if your house or condo is listed for sale on the MLS, all those “target buyers” will have access to it too – if not directly, then through syndication sites like Redfin and Zillow, and also 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.
For most sellers, whether or not a buyer falls into whatever sought-after category doesn’t really matter. The actual target buyer typically has these 3 traits:
- serious intent to buy,
- confidence in this purchase,
- and the qualifications to see it through.
A broad marketing strategy that makes use of the best, most reliable systems like the MLS is key. If you only advertise your home to a certain type of buyer you might accidentally miss out on the top buyer for your home!
Myth # 3: It doesn’t matter if the marketing is good or bad, buyers are buying everything
I cringe when I see the photos that some professionals use to market their listings! It’s the same when an MLS description is full of typos, spelling errors, incorrect or missing details, or simply say nothing concretely interesting or compelling about the home. And I always wonder, why doesn’t the seller care? These marketing errors can cost you!
Photography is perhaps the most important marketing element, only behind appropriate pricing. This collection of images is likely to be a buyer’s first impression, and really your home’s first open house! If the images are bad, buyers are far less likely to come to check it out in-person. So turn on the lights, open the curtains, and have the home show-ready for photo day! If the home is not vacant or staged, clean, declutter counters and floors, and close the toilet lid. And hire an agent willing to pay for professional quality images to present the home in the best possible light. This is no place to cut corners!
Written descriptions on the MLS are limited to 1000 characters so need to be persuasive and concise. For instance, having a “wonderful kitchen” doesn’t tell buyers what they want to know. Instead, name the elements that make it wonderful and be specific. Is there an island, or a skylight? How about a 6 burner gas range from a recognizable brand? Was it remodeled recently? Is it open to the family room? The description is far more gripping when it’s specific and highlights features buyers may find desirable.
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 the marketing material and MLS listing description before they goes live, if possible. And check it out once published to make sure it’s both good and accurate.
Where you price your home is also a major marketing element. Price it too high, and your appropriate buyer will never see it. Price it too low and you create a price mirage which could either cause a bidding war or a lot of disappointment with lower than wished for offers. So what’s the best pricing strategy? That may depend on your micro-market, but it’s often a good idea to price it on the lower end within or slightly below a range determined by a professional accurately gaguing the home’s probable market value.
If you want to sell for top dollar, and not just sell, good marketing is critical to your success.
Myth # 4: Every listing sells with multiple offers
The homes which sell with multiple offers usually do so within 7 to 14 days of going on the market. After 21 days, the odds of getting more than one offer at a time fall through the floor dramatically. Unfortunately this isn’t a statistic that’s easily tracked as it’s not regularly recorded on our MLS. From our experience and what we hear from our colleagues, while the exact timing may fluctuate slightly this has been true for years.
Right now in Santa Clara County, there are 437 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 437 under contract homes, 169 (39%) had days on market longer then 21, so unlikely to have sold with multiples. Alternatively, 215 houses (49%) sold in 14 days or less, so most of those probably did get more than one offer.
Depending on the area, price point, school district, and condition 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 with a significant portion of the listed properties.
Myth # 5: All listing agents do the same thing, just hire the cheapest one (and offer low to no buyer agent commission, too)
This may be the most crucial element of all – who you hire!
It’s easy to find real estate professionals who will promise to sell your home for a low cost (meaning low commission fee). Before doing that, consider this: your home is likely your biggest financial investments – is hiring the cheapest the best way to get the most out of your investment?
All agents are not created equally! If you work with someone who is not knowledgeable, not experienced, not good at marketing, and not good at negotiating, the home may not be positioned or marketed in a way to sell fast and for top dollar. If you believe these things don’t matter it will really cost you in the long run!
Some things to consider before hiring an agent:
- How knowledgeable is the sales person about your area? Do they have experience with your neighborhood and know what makes it special, or does he or she list anything in the 9 county Bay Area and beyond? An unfamiliar agent may not know to market a home for it’s sought after school district or neighborhood amenities.
- How experienced is the agent in your property’s price point? If it’s a luxury home, has the agent ever sold one before? Or if it’s a condo, have they sold those before?
- How long has he or she been licensed? And are they working in real estate full time, or is this a side-job?
- How many sales has the realty professional had career wide? How about in the last year or two?
- How does their marketing material look, such as fliers, mls description, and 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 or reviews? What comes up 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 education, additional professional designations, and stay current on the latest changes? Real estate is an ever changing field with ups and downs in the market, rollouts of new and updated contracts and paperwork, and changes through law and litigation.
In truth, all Realtors or real estate sales people are not the same, either in style or in substance.
Some have loads of experience and can deliver a high quality experience to both you and to the public you are marketing to. Others don’t know what they are doing.
When hiring an agent, don’t look for the order-taker who does whatever you tell him or her to do. If you are working with an agent that cannot negotiate with you to get the price right or to offer a decent commission to the cooperating buyer’s agent, then why would you expect them to be able to negotiate with the public to get your home sold for the best price? If you can run over your listing agent, so can buyers and other agents.
Your chosen agent will be your advocate, so choose wisely.
He or she needs to be able to tell you the honest truth about your home’s likelihood of selling at any given price or condition. Your Realtor should be able to motivate you to do the things you won’t want to do, like declutter, paint, carpet, and pay for presale inspections, and to be a resource to help you on the way. If you don’t hire a professional who can give you excellent guidance (specifically, guidance that you will heed), how do you expect to succeed?
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’ll still need to put in some effort. Be proactive and involved every step of the way. Hiring well and quality marketing are sure ways of tipping the scale in your favor when it comes to the sale of your property. And most of all, don’t be a sucker for any of these common myths – they can really cost you!
Want to learn more? Check out these other articles on our blogs.
- How to Make People Line Up and Beg to Buy Your Irresistable Home
- Traditional Marketing, Too
- Benefits of Realistic Pricing
- Five Things NOT To Do When Pricing Your Silicon Valley Home to Sell