Home Buying in Los Gatos>Question Details

Doug P., Home Buyer in Los Gatos, CA

Questions about Los Gatos markets for first time buyer

Asked by Doug P., Los Gatos, CA Fri Aug 17, 2012

Hi All, I have been visiting a few open houses and scoping out the LG market and especially interested in properties w/LG schools. A few questions that hit me during these open houses. I want to make sure I am entering the right area before choosing an agent.

1) Real estate agents at open houses are saying that some of the best properties don't even hit MLS as they are pre negotiated among real estate agents. Is this true?
2) If that is the case do these agents from one company discuss these pre-mls sales with agents from other companies? For example do people from Sereno Group talk to Alain Pinel?
3) I keep hearing about all cash offers and people paying over asking price for LG school homes. Do I really have to be an all cash buyer to be able to compete? Sounds pretty crazy.

Thank you for your time.

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Answers

11
Stu Carson’s answer
Doug,

Great questions. You're about to find out why my Blog is http://www.GetRealRealtor.com

I call it like I see it and frankly the Real Estate industry has some of the lowest standards of any industry. Why? It's too easy to get licensed... so everyone and their brother is a "Realtor". If you were looking for a heart surgeon, would you consider one that only does 1 to 3 heart surgeries a year??? Seriously! Why not?

Fact, 8 out of 10 Realtors in Santa Clara County buy or sell less than 1 home a year!! That's approximately 5000 of the 6500 Realtors in Santa Clara County. But don't take my word for it check the facts out and read this article http://www.stucarson.com/RealtorFacts

So beware Realtor competency!

Next, beware Realtor ethics! Another fun article at my Blog http://getrealrealtor.com/265609 "A Litmus Test for how Smart & Ethical Your Realtor is".

99% of the time anyone that sells a home before it comes to market is a crook. The only exception would be that small % of Sellers that don't want to get top $ for their home. No the vast majority of the time, the party that wins with a pre-market sale is the Realtor and ohhhh how clever, their brokerage!!! The line goes like this, "our brokerage is sooo large, we are going to do a tour for only our agents first...". It's called double ending, dual agency, sub-optimizing market exposure and therefore demand and therefore market value.... The bigger firms can be the worst about this, with their justification to the Seller as to again why less market exposure is better than more. Soooo beware, do you as a Buyer want some one or some firm with those ethics representing your best interests?

Get your discounts!!! Get your lower fees!!! Hotdogs! Peanuts!! Get your rebate here... that's right, we'll cut 25% or 50% off our fees!!! HUrray! Hurray! step right up, be our next lucky customer! Again see towards the end of this article regarding why hiring someone that gives away their money, might not be the best person to hire to represent & negotiate on your behalf for price, terms and conditions on one of the largest purchases in most people's lives! ttp://www.stucarson.com/RealtorFacts

So what's going on with the Los Gatos market? Do you have to be a cash buyer? Check out the stats, the facts... actually Los Gatos is one of the "calmer" markets, with power better balanced between Buyer and Seller. See these charts on each market and month by month what % of asking price Sellers are getting http://www.stucarson.com/TrendsCharts

So, how to hire an agent to help you get the home you want... in the least amount of time... or at the right time... at the best possible price, with the best possible terms and conditions??? Hire a pro. 7 out of 8 Realtors ARE NOT Pro's... though they may look the part, drive the car, have the business card, work for that big company, etc.... Check testimonials. Check resume. Check continuing education. Interview a few and pick one that you will be loyal to, if your hiring process was decent, they will return your loyalty by not only going the extra mile for you, but making that effort from a position of wisdom, experience and respect in the market place.

http://stucarson.com/testimonials
http://stucarson.com/AboutTheTeam

As I say on the front page of our website as part of the explanation for why we call ourselves the "Kaizen Group of Keller Williams"

"...You understand the power of technology, you know that no industry stands still, status quo is tantamount to death. You very likely know that because you compete in the world market place for a Silicon Valley based enterprise. Excellence & innovation is a way of life for you... why not expect it from your Realtor?..."

Ready to go to work for YOU! Call or email me to take the next step.

Stu

P.S. BEWARE school district boundary issues in Los Gatos.... many neighborhoods in Los Gatos zip codes are not in the Elementary, Middle School or High School attendance boundaries. I have invested in mapping technology that allows us to show you properties for sale in specific school boundaries. I'm not aware of any other Realtor's that have taken the steps we have to provide that information automatically to our Buyers. Ask me more about this.... check it out at http://www.JustSchoolInfo.com

http://www.JustMyProperties.com
http://www.JustLosGatos.com
http://www.GetRealRealtor.com

408-209-0849
1 vote Thank Flag Link Sat Aug 18, 2012
BEST ANSWER
Hi Doug,

Happy to hear you're interested in Los Gatos, and LG schools. We also came to Los Gatos 9 years ago for the schools and wonderful community atmosphere that is uniquely Los Gatos. Our kids have thrived here!

On to your questions..

1. It does happen from time to time that a seller will want an off-market (not on multiple listing service and not on the internet) sale. And it is also true that homes sold in this manner ARE typically sold in-house, via agents networking within the same company. However, these sales represent a small fraction compared to the homes available on the MLS and internet. In fact, with this limited method of exposure, the pool of available buyers for the home is severely restricted, and therefore, not recommended if a seller is seeking a top-dollar sale.

2. Within the confines of this restricted method of selling a home, an agent typically will network first through his or her own office and agency first. If this doesn't generate sufficient, interested leads, the agent will extend the reach to include agents known to the listing agent in other companies. And finally, if there are still no nibbles, the agent may try a mass-email to brokerages in the area.

3. No, your offer need not be all-cash to be competitive in LG. In fact, in a multiple offer environment, it is not always even the highest bidder that gets the deal! On Monday we're closing a sale on a Blossom Manor area home (zip code 95032), that received 4 offers, none of which were all-cash. The ultimate success of your offer depends first and foremost on your financial qualification to purchase, and second on your personal motivation to purchase. The seller must feel confident in your wherewithal to close the sale financially, AND your personal desire to live in THEIR home!

How do you show compelling qualification and motivation to close the sale? Through the content and delivery of your offer package. In any competitive home sale environment, preparation and delivery of your offer package is critical. Your offer package needs to answer some key questions: What is the seller looking for besides price? What are the advantages of taking your deal? What is the best way to connect with this seller and get them to want to work with you? Effective delivery of a compelling offer package is how you get a seller to WANT to sell to you. And therein lies the value of having an effective buyer agent.

Doing your homework is always a good idea. When you are ready to pursue buying a home in Los Gatos, I recommend interviewing several agents before selecting one to represent you as a buyer. And yes, Lana and I would be delighted to be on your list!

Best wishes Doug!

Jeff Strickland
408.393.7770
InteroJeff@gmail.com
1 vote Thank Flag Link Fri Aug 17, 2012
Hi Doug,
good answers below...yes a seller sometimes prefers his property to be marketed quietly and asks the Broker to do this, but no it is not necessarily the best property...all cash gets your offer noticed but it does not necessarily mean it will be the successful offer

good luck!
BUYER CASH REBATE 50%-60% / SELLER DISCOUNT 50%

Quality Full Service! Work directly with the Broker/Owner.
Flavio Tejada, MBA-Finance, Realtor, Broker/Owner
(415) 305-2958
1 vote Thank Flag Link Sat Aug 18, 2012
Hi Doug,

In my mind the questions you are asking can be applied to any of the cities in the bay area so I don't know if the answers will help you in making the decision about whether Los Gatos is right for you or not but perhaps they will help you decide whether committing to an agent is the right move (which I honestly believe IS the right move).

1&2) Yes, it's true to an extent but more commonly in higher price points (multi-million) than $2million and below and it's certainly not a majority of homes. Without a doubt a seller is going to get the best chance of maximizing their proceeds by marketing to the fullest and making sure everyone knows about it so an off market sale is typically not going to be their best option. That said, there are always situations where the house never goes on the open market and a well connected agent is going to be your best chance at getting exposure to those opportunities. In my experience agents in Los Gatos talk with other agents they know, whether or not they're in the same brokerage. Obviously their colleagues in the same brokerage will get to hear about it first but a smart agent will make sure the biggest players get to hear about it too regardless of the logo on their business card.

3) No you don't have to be all cash to compete, but it definitely helps ;) My answer is....it depends! It depends on your price point, it depends on the knowledge of the agent that's representing the seller and it depends on the experience (and reputation) of the agent that's representing you. I'm not going to lie to you, if you're looking at homes under $1million you are likely going to be up against cash buyers. Even at $2 and $3 million you might be competing with cash buyers but it's less likely unlike March/April which was a cash buyer frenzy (oh my what a ride that was!) Thankfully Los Gatos is not as crazy as elsewhere and it has definitely cooled off somewhat and become almost sane again. Your best bet is to work with an agent who understands the Los Gatos market, is well connected with other Los Gatos agents and can educate the seller's agent about the strength of your offer over other offers.

Going back to your original question about whether Los Gatos is the right market for you, I truly believe that's a lifestyle decision. My husband and I laughingly call ourselves lifestyle designers. We see the home purchase as a by-product of a buyer process that's designed to figure out what is really important to you. I'd love to tell you more about what we do and how we do. So, like Jeff & Lana, I'd love to be on your list of realtors to interview.

Good luck with your decision.

Gail Thomson | DRE 01444563 | gail@finehomemoves.com
Cell: (408) 205 3758 | Office: (408) 357 5710
Blog: http://www.finehomemoves.com
Facebook: http://www.facebook.com/FineHomeMoves
Intero Real Estate Services
518 N Santa Cruz Ave, Los Gatos, CA 95030
1 vote Thank Flag Link Fri Aug 17, 2012
Los Gatos is a very tough market and yes there are pocket transactions since there are a lot of cash buyers interested in the market. But that's the norm in any pocket of Silicon Valley where the school districts are highly rated.

We just wrote some post about helping non-cash buyers to have a chance to complete with Cash buyers that might help. You can read the top 5 recommendations on how to compete with cash buyers.

http://davidmortaz.com/2013/05/31/top-5-ways-to-complete-wit…

Compounding the problem is the very tight inventory that has continued thanks to the banks who are still holding the Real Estate market hostage.
0 votes Thank Flag Link Sat Jun 1, 2013
Hi Doug,

Just wondering how much square footage you were interested in. I'm a loan agent that may be interested in doing a direct sale of my property. It's a cozy hilltop cottage/ranch located in the Los Gatos/Monte Sereno 95030 zipcode off Highway 9. There's a choice of Los Gatos or Saratoga schools. Good luck in your search.

-Joe
0 votes Thank Flag Link Wed Dec 19, 2012
Doug,

I've sold 5 homes in Los Gatos off market in 2012, only one of which was a Sereno Group listing. The best buyer's agent will work to find you a great home, at your price, on or off market.

You can sign up to get access to my pre-market listings at http://www.rieserealestate.com/exclusives/

Michael Riese, RIESE Real Estate
Broker Associate, Sereno Group
(408) 781-7684
DRE: 01366625

What my clients are saying:
http://www.yelp.com/biz/michael-riese-sereno-group-los-gatos
0 votes Thank Flag Link Wed Aug 22, 2012
Hi Doug,
Yup it is hard being a buyer right now. Who do you believe, everyone has an opinion, how do you find out the truth?
Well here are some thoughts that may help you that are logic based
- yes you should select an agent to help you find your next house
- the best basis is how do they communicate with you
- do you feel comfortable with them
- in your discussions do you feel they have YOUR best interest at heart

Once you decide on a good agent they really can help you maneuver thru today's Los Gatos market.
In the meantime here are my two cents on your questions

1.) Yes sometimes homes are sold before they hit the open market, No they are not always the best properties, they just happen to met the needs of another agents clients, yes usually in the same office, very rarely outside of that office

3.) No have not seen alot of all cash offers here in Los Gatos, good size down payments (over 30%) yes more of those than in the past

Good Luck Doug

I Would enjoy the opportunity to talk to you about being your realtor

Mike Moresco
Alain Pinel Realtors

408.316.0611 Cell
408.357.8727 Direct
Web Reference: http://www.mikemoresco.com
0 votes Thank Flag Link Fri Aug 17, 2012
Doug,

To answer question number I have two comments. It is true that somethimes things are sold off market within a company, not so much between agencies. I think what you are hearing at open houses is an agent trying to say "I have inside information, work with me." I don't blame them for that.

Because the inventory is so incredibly low, most agents are putting them out on the MLS to get the best possible offer for their sellers.

As far as all cash buyers we are not seeing very much of that in Los Gatos. I see it more in Cupertino and Sunnyvale.

We just sold three in Los Gatos and they all had buyers with loans. It's all cash in the end to the seller so the only reason for all cash is a fear it won't appraise.

Hope this helps!
Shawn
0 votes Thank Flag Link Fri Aug 17, 2012
It is true that some listings are sold off market as agents exchange buyers/sellers wants and needs at office meetings or over their office intranet. In order to maximize any sellers profits I always suggest they list on the mls whether or not I know of another agent that may have a client for my listing. If their buyer is the best qualified then certainly they will be able to compete with any other buyers who submit an offer. If listings are sold off the mls then most of the time they will be between agents within the same brokerage unless they have a relationship with agents in another local brokerage. The market has definitely picked up because inventory has been low. This does not mean you have to be all cash. You just need to make sure you present a clean offer that fits the sellers needs. Sometimes this means offering a free rent back for a certain period or no physical contingency if all disclosures and inspections are available prior to writing an offer. It really depends on the property, the seller and how much you want the home. A good agent can help you investigate the best plan of action in order to ensure you get your offer accepted. Hope this helps!
0 votes Thank Flag Link Fri Aug 17, 2012
Doug P:

In order answers are:

1) very rarely, as in extremely rarely, as in rarely enough to not worry about, this happens.
2) Yes, after discussing it in house.
3) No you don't have to be an all cash buyer to compete. You have to have your finances ready for the purchase and be able to prove you can complete the deal you offer. Not all of Los Gatos is on fire price wise. Prices are still substantially less then before the bubble burst. Los Gatos will always be a high priced area in the 95030 and 95033 areas. These are the real Los Gatos Schools zip codes.

As far as 1 and 2 are concerned, this is an old tried and true sales pitch for trying to catch the unsuspecting buyer into being represented in his search for homes by the agent in the open house. The fact of the matter is that sellers want their home on the open market before making a decision to accept an offer because that is the only real way they can gauge whether they are getting a fair price for their home.

Stay tuned. I am meeting with a seller in Los Gatos 95033 zip code on Sunday. If I obtain the listing, would you like me to tell you about it before I put it on the MLS?

Mitchell Pearce
408-639-0211
mitchell@handsonrealtor.com
0 votes Thank Flag Link Fri Aug 17, 2012
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