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Pricing Your Silicon Valley Home Competitively

Pricing your Silicon Valley home competitively - house and wordsAs a Silicon Valley home seller, what do you need to know about pricing your property ? At any point in time, there are several other homes for sale competing with yours. The first thing to work toward understand is the market conditions for your home.

Pricing and market conditions

Market knowledge requires digging deeper than the county or city level, and often means more than just the zip code, too. For example, in the Town of Los Gatos, there are two zip codes, 95030 (closest to downtown) and 95032 (more outlying, west and east from downtown). Additionally, there are segments within those zip codes, such as the different school districts. Pricing your Silicon Valley home competitively means drilling the data down to your home’s market. A Los Gatos home seller might look at what’s happening throughout the town, in her zip code, and perhaps in her subdivision when getting a sense of the current market conditions.

Where to get the market data? 

There are a number of important data points to learn, including current inventory, the speed of sales, the sale price to list price ratio, the absorption rate (months, weeks, or days of inventory), and more.  Those of who who are dues paying members of the MLS can also pull data specific to your house. For instance, I once had a listing in a high end area in which there was an acre of land but no pool. With that much land, and at a luxury price point, most buyers actually do expect a pool. I was able to pull the months of inventory for properties similar to my listing with and without pools – and the results were crystal clear.
I have market reports available via my monthly newsletter (some data hand crunched by me from MLS Listings), Altos Reserach (weekly reports by city or zip code using list prices), and the Silicon Valley RE Report with monthly data for Santa Clara County, San Mateo County, and Santa Cruz County – none of these require signing up, but if you do sign up, you’ll get the data emailed to you automatically. Additionally, I write blog posts with market specific info on my various blogs, including the Valley of Heart’s Delight blog.
At this writing, late July 2020, there are many multiple offers among turnkey, well priced houses.  This is not as much the case among townhomes and condos, especially small units with no outside space. Home buyers want more space, and some outside space, if they must be sheltering in place.

Basic pricing factors

Factors that help us determine the probable buyer’s value of your home include these:

  1. Location (includes school district, proximity to things good or bad, parks, high voltage lines, views)
  2. Size of your home and lot (non-permitted, non-finalled additions may add value but not as much as either original construction or permitted/finalled additions)
  3. Condition of your property (we can often boost your sales price by working on this)
  4. Buyer demand level for homes in your area
  5. Availability of financing (can change)
  6. Interest rates (which are super low today)

Your motivation for selling does not directly impact the value of your home, but it may change your timing somewhat and it may change your ability to get the home into turnkey condition. So it’s important for your listing agent to understand why you want to sell, too, so that he or she can help you make the most of the situation. 

Often, the pricing or market value of your property will be impacted by things completely out of your control or anyone else’s control. Things like the available inventory (a shortage of homes for sale will drive prices up, a glut of homes on the market will depress sales prices), the local economy (high or low unemployment), the prices of rental homes (when it’s cheap to rent and expensive to own, it CAN make it harder to sell if prices are stagnant or going down), appreciation rates, and disasters (natural, like the Loma Prieta Earthquake or the current pandemic, or unnatural, like the events of 9-11).

When I work with sellers, we determine the best pricing strategy based on recent and current market activity and the factors under the owner’s control:

  1. Property condition (remodeling vs needed repairs)
  2. Staging / presentation of the home
  3. Access to the home (if it’s harder to see, it’s harder to sell)
  4. Thoroughness  and quality of pre-sale inspections
  5. Thoroughness of disclosures

When buyers have more knowledge on what they are buying, they are less fearful and write stronger offers. Does your home need a new roof? Don’t leave the price to the buyer’s imagination! Instead, get a bid for a roof replacement. (I once had a listing in exactly that situation and asked a client “what do you think a new roof on this house might cost?” and he guessed $100,000. The fact was that a new roof could be put on for about $15,000.) Providing the inspections, bids, receipts for work done, and very thorough disclosures makes buyers feel like they know what they are buying, they don’t get cold feet as much, and they are more comfortable writing strong offers without property condition contingencies (this is true as of this writing).

Marketing plan

A good home with poor photos, an incorrect price, difficult access, or bad odors may not sell for top dollar. A well thought out marketing plan from a real estate professional  can help to lead the well qualified buyers to your home. With the coronavirus in full swing here in 2020, a marketing plan that provides excellent exposure without unnecessarily risking the sellers is more important than other. There are many excellent tools available. One that I recently began using because of the pandemic is the iGuide tour, which provides a floor plan and views of the home from multiple angles so that home buyers can really get a sense of the home.  You can see an example of it in my currently pending sale’s virtual tour: 526 Fierro Loop, Campbell

The combination of an accurate Competitive Market Analysis, a precise property evaluation, and a well-executed marketing plan will help you price your home strategically in order to attract the full-price or more buyer.

Beyond that, I suggest to my seller clients that if we can change a few things inexpensively to boost your bottom line, let’s do it! I have studied staging and even feng shui and can help you to make the right improvements, without overspending, to get a good return on your investment and get the pricing just right. (Some of my clients start talking with me a year or more in advance of when they will actually sell to get my advice on the right improvements to make.)

Interested in a no obligation consultation on selling your home? Please reach out to me by email mary@popehandy.com and we can set up a time to talk (or contact me by phone, 408-204-7673).