I hope this helps,
(1) The list price offered on this house didn't strike me as too high for the neighborhood. In fact, it is on the low side, taking into account that some updating would be needed.
(2) The Alta Vista neighborhood is perenially popular. The reasons are many: it's scenic (at the base of Blossom Hill), it has two great schools very close by (no need to cross any major streets to get to them), it's a neighborhood where everyone keeps up their home and yard, and it's tree lined to boot (most streets).
One agent said that there are "no issues" in the area, which actually isn't true. (There are probably NO neighborhoods which can claim that.) A few of the issues are (see the reference URL below for a complete article on this specific neighborhood): high voltage power lines bisect the neighborhood, running between Coronet & Blossom Valley Dr, there are some (possibly many) homes with foundation issues due to poor management of water flow off of the hill and off of their roofs, there's a small earthquake fault that cuts through one corner of the area, and there are some road noise issues if your home is too close to any of the three roads nearby (esp Blossom Hill Road).
Don't be put off by the negatives - just realize that they are there, just like there are negatives in any neighborhood. You may or may not think that being adjacent to the power lines is a big deal, for instance. It will be for some. But others will say, "look, I have a more private backyard" and "I can use part of that easement for a garden - it's like having a 10,000 SF lot".
(3) What about a first time buyer: should you buy a property that needs work? Or should you only buy the fully remodeled or brand new home?
It depends on you, your financing, and your tolerance for construction projects and your tolerance for working in an older kitchen, among other things.
If your top priority is gaining equity, you'll buy an ugly house with "good bones" and improve it (either before you move in or over time). If you have to buy the fully remodeled, perfect home, there's a good chance (in many price ranges) that this will catapult you into a multiple offer situation in which you may have to bid the home up to get it away from everyone else. It is very difficult to both get the perfect home and to not risk overpaying in today's market in the lower price ranges.
There are loan programs out there which can enable you to borrow more than just the purchase price of the home if you are going to do improvements prior to moving in (such as replacing the furnace, water heater, kitchen appliances). As your lender about this.
Most homes are neither fully original nor fully remodeled. Most homes are "somewhat remodeled". To get them into shape to pass inspections (there's not really a pass/fail grade, it's more like items of concern), most homes will require some work. Sellers don't usually know that they have termites, for instance. Treating pests, correcting issues with electrical, roof, etc. can often run 1 - 3% of the purchase price. This is really in the range of normal.
Then the only question is this: who will pay that 1 - 3%? I will discuss this on my Live in Los Gatos blog today.
Luxor Real Estate Group
I would definitely take Bills advice and make sure you have a good buyers agent in something like this you need someone on your side that has experience in these transactions. This is problably one of the largest purchases you will make this life time, make sure you have a pro on your side.
If you are not using a Realtor then at least hire a licensed General Contractor to co-ordinate all aspects of the project.
I can give you the name of such a person if you wish.
Good Luck, Bill
I checked out the house. The following updates need to be done -
Section 1 - 5K
Roof - $15K
Kitchen - $15K - needs to be redone completely - so this might be in fact lot more
Flooring - $5k-10K
Plumbing - $5K
Some electrical work
Appliances - $5K
Plus the hassle of permits, working with contractors etc.
So I am estimating that this is a good value at 625K with spending additional $60K upto specs..
I am not sure at this point if I can handle such a major remodel - considering am a first time buyer...
Thoughts?? Am I completely out of my mind?
One concern I have from looking at your previous questions is that you seem to have been looking all over the map since the beginning of the year. I would strongly suggest that you quickly focus on what it is you really want, as the $8,000 1st Time Homebuyer Credit goes away at the end of November. Rather than rely on the occasional question on this forum, you would be much better served engaging the help of an agent that is capable of guiding you through the entire process in a professional and timely manner.
Get it at close to this price and you have a great purchase.