What Does a Home Warranty Cover?

If you’re looking to buy a home here in Silicon Valley, you may be wondering whether you need a home warranty to protect it against potential problems. Today I’d like to answer some common questions about home warranties:

1. What is a home warranty? In essence, a home warranty is an insurance policy that protects your home from issues with things like the plumbing, electrical wiring, or appliances after you move in. Even if no problems were spotted during your initial inspection, complications can crop up unexpectedly.

2. How long do home warranties last? Home warranties will generally last one year.

3. How much do home warranties cost? Basic home warranties usually run between $400 and $500. This cost can vary depending on what you’d like to have covered.

4. Who pays for the home warranty? Typically, we can get the seller to pay for the cost of the home warranty as part of our offer; however, if you’re competing with multiple offers on a property, sometimes it’s best not to include it, as the seller is going to look at the total net proceeds of your offer and take that into consideration.

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Potential problems with your home can come up unexpectedly.

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It’s important to note that home warranties are not catch-all insurance policies that will completely cover everything. There will usually be a service fee attached to a claim, which can run anywhere from $60 to $90 per incident. The warranty company will send contractors out to fix any problems, but you will be charged for each incident reported. While a home warranty provides some nice peace of mind for new homeowners, they are not the perfect solution to every problem you may encounter.

I’ve learned this from my own personal experience. My water heater had gone out on my property, and though I was covered by a home warranty, codes had changed between then and the time the house was built. So while the installation and the new water heater were covered, the code upgrades were not. Though I ended up spending about $400 on that, I did end up saving nearly $1,000 on the water heater itself, thanks to the warranty.

If you have any specific questions about home warranties, companies that provide them, or different types of coverages, give me a call or send me an email. I’d be happy to talk you through it.

Real Estate Agents Can Help You With More Than Buying or Selling a Home

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When should you contact your real estate agent? The answer might seem obvious. Most people would say that you should contact your agent when you are thinking of buying or selling a home. However, there are plenty of other times when you should contact your real estate agent.

For instance, did you recently receive a letter from the county assessor saying that your property tax has been assessed? If you don’t agree with your tax assessment, you will need to appeal it. When you appeal, you need supporting evidence and comparable properties. Real estate agents can definitely help with that.

If you are thinking about refinancing, you should also get in touch with your agent. You may want to get rid of mortgage insurance, in which case you would need 20% equity. If you need to pull cash out, you need 25% to 30% equity. You want to make sure you have that equity before you spend $400 to $500 on an appraisal. We can help you with that, too. We can give you an idea of what the value is and how likely it is that the home will appraise.

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We put you in touch with great contractors if you are making home renovations.

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If you’re thinking about doing home improvements and want to know which will increase your resale value, check in with your real estate agent. Even if you already know which renovations you are going to do, we can put you in touch with contractors who will get the job done.

Finally, if you are thinking of moving out of state or picking up an investment property across the country, let us know. We have contacts with real estate agents all over the world, so we can certainly find someone who can help you.

If you have any questions, please give me a call or send me an email. I would be happy to help you!

How Much Money Is in Your HOA’s Reserve Fund?

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As we’ve discussed before, Homeowners Associations come with many pros and cons. Before you decide to purchase a property within an HOA, you need to review the financial documents during your contingency period.

You want to make sure you are moving into a community that is financially secure. Obviously, there’s an HOA fee due. Whether that fee is $50 or $350, you need to know what that money is going toward. What are you getting for that fee? The HOA fee covers amenities such as parks, pools, and landscaping, but a portion of that money goes to the reserve fund.

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Pay attention to the reserve fund.

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As time goes on, fences, roofs, and landscaping may need extra repairs. The reserve fund is there for any major repairs. Every year, the HOA conducts a reserve fund study. Look at those studies to see how the reserve fund is doing so you know what is going on in the community in the long run.

If your reserve fund is 50% funded, 100% funded, or 150% funded, you’re in pretty good shape. If the reserve fund is only at 35%, that is a red flag. The HOA may even need to order a special assessment and, depending on the number of homes in the community, that could run a few thousand dollars. They may even plan to raise the dues, so definitely pay attention to the reserve fund and special assessments.

If you have any questions, give us a call or send us an email. We would be happy to help you!

Is It Really the Best Time to Sell in Silicon Valley?

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We've seen a lot in the media about what a great time it is to sell - we even did a market update for you recently with the numbers. But how do you know it's really the best time to sell? Does that blanket sentence mean it's the best time to sell your Silicon Valley property?

In reality, not necessarily. It is a seller's market and a great time in general to sell, but as we always talk about in real estate, it goes back to the 3 most important things about a property: location, location, location. This is because real estate is very localized. An area may have an average value of $400 per square foot, but that's because one neighborhood has a value of $350 per square foot and another neighborhood in the same area has a value of $450 per square foot. With real estate being so localized, it's hard to say a blanket statement like "now is the best time to sell."

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It goes back to the 3 most important things about a property: location, location, location.

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You really want to break it down by the local market in your local neighborhood and see if it's really the best time to sell. When doing that, you need to look at price and competition. For example, if there are 3 homes in your neighborhood that are the exact same model as yours, maybe now is not the best time to sell; wait a week or two and see what happens with those properties. Waiting until after they sell, or accept an offer, is a great time to list yours, because the house may have had lots of interest that can be funneled into your similar home.

The key to remember is to consider your neighborhood. It may not be the perfect time to sell right now, but it may be soon. We put a property on the market the week before Christmas. People were wondering why - but it was in a very desirable community with no other homes for sale, so no competition. It sold very quickly with multiple offers. In general, Christmas isn't the best time to sell a home, but it was the perfect time to sell that particular home.

If you're interested in selling your home and now is the best time, give us a call and we'd be happy to work with you. Likewise, if you have real estate topics that you'd like to see covered, let us know too.

What Happens When Your Offer Is Contingent?

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If you’re a homeowner buying a new home, your offer may be contingent upon the sale of your current home. Having a contingent offer decreases the likelihood of acceptance, especially when competing against others. For instance, if there’s an offer identical to yours that isn't contingent on a home sale, it’ll be more attractive. What if your offer is contingent on the sale of your property in the Silicon Valley?

On the flip side, most people do have a home to sell when purchasing a new one. How then do you win a bidding war with a property to sell? There are different stages of contingency. The further along you are, the better your offer looks.

For instance, you see your dream home listed on the MLS. You want to make an offer, but your home isn’t even listed. It’s not staged, and it might even need repairs. You’re not pre-approved and you haven’t pursued an inspection. Before jumping ahead, you need to do some work. Stage one involves the time it takes to prepare your home.

However, if you’re further along in the process, that strengthens your offer. If you’re considering buying a new property, I highly suggest starting the selling process as early as possible. 

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The further along you are in the selling process, the better your offer looks to the seller.

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If you've already prepared your home for sale, the next step might be to have professional photos taken and work on the marketing aspect. If you’ve handled all of this, your offer is even stronger. A step past that is already being listed on the market. An even further step would be already having a buyer, especially one that removed their contingencies! The further along, the better it looks for the seller.

If you’re thinking about buying or selling a home in the surrounding area, give me a call or send me an email. I’d be happy to answer your questions and serve your local real estate needs!

What Does the Silicon Valley Housing Market Look Like?

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How is the Silicon Valley real estate market doing? We’re at the end of the first quarter of 2016, so it’s time to look over some data and statistics.

Overall, compared to 2015’s first quarter, it’s looking good! We’ve experienced a slight increase for average sales price and slight decrease in days on the market. Although other numbers in the region have remained consistent, we know real estate is hyper-local. 
San Jose experienced an 8.7% sales price increase to $912,000. Morgan Hill experienced a 9.6% average sales price hike to $871,000. Additionally, in Morgan Hill, the average days on the market decreased to 33 days. We’re seeing some major improvements, but again, it needs to be broken down by specific neighborhoods.

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We anticipate a busy spring and summer season in Silicon Valley real estate.

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For the first three months of this year, we’ve had low inventory, but during each month, more homes have been listed. It’s catching up to buyer demand. More sales are happening from increased inventory and buyer foot traffic. We anticipate a busy spring and summer season. That makes it an opportune time for anyone thinking about listing.

If you’re thinking about buying or selling in the surrounding area, you can reach me by phone or email at your earliest convenience. I’d be happy to provide you localized information about your neighborhood, as well as your home’s market value.

The Key to Winning Bidding Wars in Silicon Valley

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The real estate market in Silicon Valley has gotten extremely competitive for home buyers. In order to craft a winning offer on your dream home, you need to keep in mind a few different things while writing your offer.

1. Before anything else, you will need to get a pre-approval for a mortgage loan. Most sellers won’t even look at your offer if you have not talked to a lender and gotten pre-approved. You need to prove that you can afford the home before you make an offer to the seller. You’ll also want to show proof of funds for the down payment.
2. Writing a personalized letter to the seller is always helpful. You can include a picture of yourself and your family, and this can help put a face to your name instead of just a number. This can help to tug on the heartstrings of the seller, and sometimes this is the extra boost you need to push your offer to the top. Within the letter, tell them what you love about the home and neighborhood – especially any remodeling or upgrades the seller has done. Focus on how happy it will make your family.
3. Make sure your actual offer is written properly. Consult with your Realtor in order to fashion an offer with a proper price and terms for the sale to occur. It’s important to have a professional that knows the local market to craft your offer and ensure you have a “complete package” before you submit it.

When all's said and done, you need to figure out what the seller wants. Have your Realtor consult with the listing agent so that you can tailor-tune your offer to match the exact needs of the seller. Some people want a high sale price, and others might just want a shorter closing period for the sake of convenience.

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Tailor-tune your offer to meet the needs of the seller.

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If you need help writing an offer or navigating a tough market in Silicon Valley, please don’t hesitate to reach out to us!

Superior Realty Partners' Second Annual Jasper Park Easter Egg Hunt & BBQ

We just finished up our second annual Jasper Park Easter Egg Hunt and BBQ! I’m so pleased and grateful for the way everything turned out. It was a great time for the surrounding community to get together and enjoy the beautiful weather.

Thank you to everyone that came out for this incredible event. I’d like to give special thanks to those that helped planning and running it as well. My realty firm, Superior Realty Partners, sponsored the event and we are thrilled with the outcome.

We’re looking forward to another incredible year in 2017. We’d love to gain your continued support next spring as well!

Are Zestimates Accurate in the Silicon Valley?

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Today, we discuss the question, “Can you trust Zillow for an accurate home evaluation?” Zillow has been making their computer-generated Zestimates ever since they started out. The website currently receives 140 million visitors a month. Many sellers are looking at Zestimates when pricing their home, and buyers look at Zestimates when planning their offers. 

However, Zestimates are within 10% of the sales price 68.8% of the time. That means this data is more than 10% off, 30% of the time. For instance, the average sales price in Santa Clara county was around $1,080,277 last year. If Zillow is off by more than 10% in 30% of their Zestimates, they’re off by $100,000 on average in Santa Clara county. That’s a huge difference in our area.

Ultimately, Zillow’s accuracy really depends on your neighborhood. Zestimates tend to be more accurate in larger neighborhoods of tract homes, since it has more data to pull from. Although I encourage real estate consumers to investigate Zestimates, you can’t rely on them for an accurate analysis. This data isn’t meant to be an appraisal. Only a professional in the industry, like myself, can provide that comprehensive information. Even Zillow stresses the importance that Zestimates are only the beginning to your home search and aren’t 100% accurate!

If you’re thinking about buying or selling a home in the Silicon Valley area, give me a call or send me an email. I’d be happy to provide an in-depth evaluation of your home. Additionally, if you’re interested in a particular topic to cover in a future video, please reach out with your suggestion!

What Are the Benefits of Homeowners Associations in Silicon Valley?

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Both first-time buyers and experienced buyers often ask, "why do so many communities have homeowners associations (HOAs), even communities of single-family homes that seem like they wouldn't need them?" There's a few reasons why homeowners associations are so popular.

For one, buyers want HOAs for the amenities that come with them. They also help with affordable housing on smaller lots that don't have room for pools, basketball courts, and so on. Since buyers still wanted these types of amenities, they were put into a common area that everyone in the HOA has access to and can enjoy. 

Since many cities require or encourage communities to have these common amenities, but they don't want to be responsible to maintain them, they require communities to form HOAs in order for the burden of collecting dues to be placed on members of the HOA.

Lastly, stormwater runoff basins are being required in order to prevent flooding and other damages. This is also considered a common amenity that needs to be paid for by all members of the community. 

There are many benefits associated with being part of a homeowners association. The most obvious benefit is the amenities themselves! Many of these communities have pools, spas, basketball courts, parks, play areas and workout areas, among other things. These are private amenities that are limited to people who pay into the HOA! 

If you're living in a condo or townhome community, HOA fees might be a bit higher, but they cover the exterior of the building, the roofs, and the many other things that make these properties look nice. Beware that HOAs have restrictions and rules, which are liked and disliked depending on who you're asking. The rules are often in place to ensure home values in the area are maintained. In order to do this, there might be rules that stipulate that lots and homes are maintained. Whether or not HOA rules are desirable for you depend on your goals and on the particular rules of a given area, so it's definitely something to look into before making a purchase.

If you have any questions about HOAs, or if you would like our assistance buying or selling a home in Silicon Valley, please don't hesitate to reach out to us. We would love to chat!