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.

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!

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!

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!