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Samia Cullen's Blog

Bay Area Silicon Valley - Mid Penninsula Market Activity and Trends

By Samia Cullen | Agent in Palo Alto, CA
  • The Danger Of Overpricing Your Home

    Posted Under: General Area in Palo Alto, Market Conditions in Palo Alto, Home Selling in Palo Alto  |  March 20, 2013 6:26 AM  |  196 views  |  No comments

    I received a call from a buyer telling me that he read in a local online paper that a house on a desirable street in Palo Alto dropped in price. He was wondering if this I true in this market. Well the answer is yes a house in Palo Alto on a desirable street had a price reduction. The fact and the matter is that even in Palo Alto and in our competitive market, an overpriced home will not sell unless the list price is in line of the fair market value.

    While some sellers are tempted to list their property at a high price and test the market or negotiate down the price, this strategy often has the opposite result. As the house stay longer on the market the house develop a stigma that there is maybe something wrong with the house and thus is not selling. The seller will start get lowball offers and end-up eventually selling at a lower price than the fair market value.

    Seller be cautious, ask your agent to prepare a market analysis and price your home in line with the mid-range of the comparable, in this market it is safer to underprice than overprice your home. Visit open houses, this exercise is the most vivid way to get a reality check about what you’re up against and what your home’s strengths and weaknesses are compared with the other homes buyers will see. If your home is underpriced you most likely end-up receiving multiple offers and the house will end –up selling at its fair market value.
    This strategy never fails when the market is hot and is far better than overpricing your home and having it sit on the market for longer time. The consequences of that are usually drastic. Seller will have to show the house for longer period of time, reduce eventually the list price later and selling the house at a less than market value.

  • Real Estate Trends - What to Expect In 2013

    Posted Under: General Area in Palo Alto, Home Buying in Palo Alto, Home Selling in Palo Alto  |  February 6, 2013 9:27 AM  |  337 views  |  No comments

    Local home prices rebounded last year and are expected to continue the upward trajectory in 2013. Our local market saw median home prices increasing to above the record prices of the 2007 recession, shattering expert predictions at that time that the real estate market would never look the same.

    Home sellers again will be in the driver’s seat with bidding wars a common occurrence due to pent-up demand and low inventory. While homes will sell more this year, they still have to be priced right.

    Here's a rundown of what to expect from the market:

    1- Increasing home prices will bring reluctant homeowners off the sidelines.

    2- Expect home prices to jump at least 6% this year.

    3- The Federal Reserve has held interest rates steady at near-record lows over the last several years in an effort to entice buyers into the market, and experts are not expecting significant jumps in rates this year. Rates could move modestly higher this year to around 4% but still be among the lowest in a generation.

    4-The Consumer Financial Protection Bureau issued new qualified mortgage standards last January that detail criteria lenders must use to determine if a borrower qualifies for a loan. Experts expect more mortgage rules to be handed down this year to help prevent reckless lending that led to the meltdown.

    5- Buyers should start the mortgage lending process at least one month before they plan to start seriously looking because experts expect the process to take longer under the  new lending standards.-

     6-House hunters should be ready to move quickly if they find the right house as inventory is expected to remain at low levels throughout the year.

  • Happy New Year!

    Posted Under: General Area, Celebrity Homes  |  January 1, 2013 7:56 AM  |  439 views  |  No comments

    For the French speakers:

    L'embarquement pour le vol 2013 est annoncé !

    N'emportez dans vos bagages que les meilleurs    souvenirs de 2012...

    - laissez les mauvais moments aux objets perdus.

    La durée de votre voyage sera d’exactement 12 mois.

     

    Vos prochaines escales sont : Santé, Amour, Joie, Harmonie, Prospérité et Paix.

    Le Commandant de bord vous propose le menu suivant, servi durant le vol:

    Cocktail de l'amitié
    Suprême de bonne santé
    Gratinée de prospérité
    Plateau d'excellentes nouvelles
    Salade de réussite
    Bûche du bonheur
    Le tout accompagné de bulles d'éclats de rires.

    Bon et agréable voyage à bord du vol 2013!

     

    Tous mes voeux sincères

  • Cost Versus Value for Your Home Remodeling Projects

    Posted Under: General Area, Home Selling, Remodel & Renovate  |  December 4, 2012 7:55 AM  |  325 views  |  No comments

     

    If you are a homeowner who is thinking about selling your home within the next year, you are probably wondering whether there are any remodeling projects that will provide a good return on your investment.

    Optimizing the use of space in a home will not only attract more buyers but also give sellers a good return on their investment.

    You must first decide on the size of the project you are willing to tackle. Creating a memorable first impression often can be accomplished through small-scale projects. For example, a nice entry door replacement or a garage door replacement will bring a good return on your investment.

    Adding a master suite or a room in the attic is a more extensive project that also offers a good return. Be sure to hire a good architect to help you come up with a functional floor plan.

    Having a family room that opens to a kitchen is highly favored by most buyers. A remodel that opens the kitchen to the family room or even to the formal existing living room is another project with a good return on investment. Formal living rooms, as well as formal offices with wood cabinets, are not in high demand in today’s market.

    Upgrading kitchens and baths is still a smart bet. However, home owners usually will benefit more by foregoing super deluxe projects in favor of mid-range kitchen and bath remodels.

    Judicious home remodeling is still worth the investment. Discuss your future remodeling plan with your agent before you start the remodeling project. Your agent can help you plan a remodel that will bring buyers to your home and increase the return on your investment.

  • Liquidated Damages and Deposit Forfeitures

    Posted Under: General Area, Home Buying, Home Selling  |  November 8, 2012 5:49 AM  |  265 views  |  No comments

    By Samia Cullen

    Real estate transactions sometimes fail - it’s a fact of life. When they do, the parties face the potentially daunting task of figuring out who might be at fault and whether either has recourse against the other. The resolution of contract disputes can be quite complex.

    The PRDS Real Estate Purchase Contract form that is most often used by our local agents has a liquidated damage clause that, if initialed by both buyer and seller, enables both parties to agree up front on the amount of monetary damages a party will be entitled to receive in the event the other party fails to perform. It states in part:

    In the event of failure to complete this purchase due to buyer’s breach of the contract and not for reason of default by the seller, a) seller is released from the obligation to sell to buyer, b) seller shall retain buyer’s deposit paid as seller’s only recourse, and c) if the property contains one to four units, one which buyer intends to occupy, then any deposit retained by the seller shall not exceed 3% of the purchase price, with any excess promptly returned to buyer.

    The liquidated damages clause does not automatically entitle the seller to the buyer's deposit if a transaction does not close - it does only determines the amount of money the seller can recover if the buyer in fact breached the contract. If the buyer and seller disagree as to whether the buyer breached the contract, the seller generally must prove in court or in arbitration that the buyer's failure to close the transaction was wrongful.

    The PRDS Real Estate Purchase Contract instructs the escrow holder to not release any deposited funds unless agreed to in writing by both buyer and seller or pursuant to court or arbitration order.

    In our area most buyers and sellers include the liquidated damages clause in their purchase contracts.

    The information contained in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.

  • The Importance of Complete Seller Disclosures

    Posted Under: General Area in Palo Alto, Home Selling in Palo Alto, Moving in Palo Alto  |  October 20, 2012 6:01 AM  |  360 views  |  No comments

    By Samia Cullen

    In our fast moving market, many houses are selling within a week, and prices are rising rapidly.  As a result, some buyers are rushing to buy without taking the needed time to investigate thoroughly the houses they are buying.

    Sellers should be keenly aware of the importance of the different reports and documents that they are filling out and signing in the course of selling a home. Full and complete disclosures protect the seller in the event of a subsequent lawsuit by the buyer; conversely, incomplete disclosures can come back and haunt them in court. Unfortunately, in the course of my business I often see disclosure forms that are not filled out properly, including questions that are not even answered at all. 

    Most lawsuits against sellers relate to these disclosures.  California law requires sellers disclose all material facts of which they are aware, or of which they reasonably should be aware, bearing on the value or desirability of the property, including negative conditions that arose during or prior to ownership. Therefore if the seller is in doubt as to whether a condition constitutes a defect, it is always prudent to disclose rather than to remain silent.

    Some sellers react negatively to filling out these disclosures at a time where they are busy preparing their home for sale. Many also feel that if they disclose all the problems, their house may not sell. Obviously, this could happen if there is a major issue, but typical disclosures normally do not discourage serious buyers. As you prepare your home for sale, spend a few minutes in every room of the home and note the defects and issues that you know of or have encountered in that room.

    Full disclosures of all material facts reduce the risk of subsequent disputes and lawsuits regarding the property. 

  • LISTING LOW TO GENERATE MULTIPLE OFFERS

    Posted Under: General Area, Home Selling, In My Neighborhood  |  September 20, 2012 7:09 AM  |  204 views  |  No comments

     

    In today’s active real estate market, a common strategy adopted by sellers is to list at a relatively low price, hoping to create interest in the property, generate a multiple offer situation and push up the sales price. But what are the inherent risks of that strategy?

    One obvious risk is that the strategy may fail to generate multiple offers.  If the seller receives only one offer at or below the asking price, the seller is not obligated to sell the home at that price. However, under the terms of some listing agreements, the seller may be obligated to pay a commission to the listing agent if the seller receives a full price offer without contingencies. Consequently, a seller adopting this strategy should be aware of and comfortable with the terms of the listing agreement.

    Sometimes when a seller does not receive any offers after listing the home at what they thought was a low price, they are tempted to abandon the strategy and increase the list price. This approach is likely to create a stigma on the property and back fire, with the property ultimately selling below fair market value.

    Listing low is a strategy that has been proven to be successful in generating the best selling price for properties in today’s local market. However, this strategy may not be the best in a soft market, and even in a strong market some sellers may not be comfortable with the approach.

    My advice to sellers is to not list their home at a price that they are not willing to accept. Use a market analysis prepared by a knowledgeable local agent, discuss your goals and look hard at the different pricing strategies suggested by your agent,  then choose the strategy that best matches your goals and personality.

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