Any idea about the 880k starting price at 37 degree north and agent rebate?

Asked by goldtime1997, Sunnyvale, CA Mon Oct 14, 2013

I would like to hear some thoughts about the 880k starting price at 37 degree north. I knew it was 690k last summer and 790 last winter. Is 880k too much overpriced? And what is the credit for 37 degree north if I go there w/o an agent?
Also, what's the predicted housing price trend for Q4 2013 and 2014?
I will greatly appreciate every single advice, thanks!

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The Medford…, Agent, Fremont, CA
Mon Oct 14, 2013
You have questions:

Q: I would like to hear some thoughts about the 880k starting price at 37 degree north. I knew it was 690k last summer and 790 last winter. Is 880k too much overpriced?
A: They will NOT negotiate price, so if you want one, you need to pay the going rate. It doesn't matter if it seems to be a fair price or not - and current prices have NOTHING to do with past prices. Those prices are gone - probably forever. Some new developments around the bay have decreased slightly, but I don't see that happening in Sunnyvale.

Q: And what is the credit for 37 degree north if I go there w/o an agent?
A: None. Since there is no discount, you really should go with a realtor to make sure you are protected.

Q: Also, what's the predicted housing price trend for Q4 2013 and 2014?
Average prices last year for 94085 Sunnyvale zip code :

2012 - Q3 - $519.90
2012 - Q4 - $583.30 - up 12.3% (from previous quarter)
2013 - Q1 - $614.30 - up 5.3%
2013 - Q2 - $650.30 - up 5.8%
2013 - Q3 - $683.00 - up 5.0 %

Q3 2013 vs Q3 2013 - up 31.5%

The market is slowing slightly - I'd expect 3-4% for Q4 2013, and then overall slowing to 5-7% for all of 2014. As you know, no one has the ability to effectively predict the future. There are far too many variables.

Terri is correct - builders tend to pass on normal seller closing costs to the buyer.
1 vote
Terri Vellios, Agent, Campbell, CA
Mon Oct 14, 2013
My understanding from working with builders in the past is the credit to agents, commissions, etc. are automatically built into their marketing budget. So the builder isn't going to credit you "commission or agent bonus". With that said, they have different sales incentives offered throughout their selling cycle and it all depends on the supply and demand, plus if they are trying to draw from their construction loan in order to release a new phase.

Some of the incentives Builders will offer is interest rate buy down, upgrade credits, and credit towards closing cost. My experience lately is that the only incentives builders are offer (because of the high demand) is credit towards closing cost and interest rate buy down. When they have a less than desirable lot they will make special pricing on that location which often times has some awesome upgrades.

When purchasing new construction beware that the builders pass on to the buyer most of the closing cost which usually are paid by the seller. Also, they have their own contract which has language a buyer needs to understand how that can affect their earnest money and closing.

As for future, Q4 has leveled just a bit, but I haven't seen prices drop for new construction. Predictions are 3% or more increase next year and possible interest rate increase. What the Fed. to see how this plays out.
1 vote
Robert Lei, Agent, Cupertino, CA
Fri Nov 22, 2013
Hi GoldTime1997,
If people are willing to pay $880k, then it is not overpriced. The fact that the price has run up that much is an indication of the desirability of the complex and this region in general. Sunnyvale is the center of Silicon Valley. From there you have a convenient commute almost no matter which South Bay company you work for now or in the future.

As others have mentioned, you don't gain anything by losing your right to have an agent on your side. There's no reason for you to try to skip out on having your own agent. The new home builder won't give you any extra reward for going about it alone.

As far as predictions, nobody knows for sure in the short term. However, what is very certain is that in the long run the housing prices and rental prices go up.
0 votes
Steven Ornel…, Agent, Fremont, CA
Wed Oct 16, 2013
Hi Goldtime1997,

You have great answers to your primary questions; however, you might find this useful as well:

"Why You Do Need a Realtor® When Buying From a Builder"
http://docs.Steven-Anthony.com/BuilderRealtorAgent.pdf

-Steve
0 votes
Juliana Lee, Agent, Palo Alto, CA
Tue Oct 15, 2013
I've never heard of a builder giving a buyer a rebate for going there without a real estate agent. I have negotiated with builders and had offers accepted with better terms than the builder openly offers. Buying a home from a builder may seem like going to a grocery store and buying something off the shelf, but buying a home always involves people and agreements between people.

A real estate agent can bring follow on business from both her other clients and from co-workers. An individual buyer is much more limited. An experienced real estate agent is bringing a serious and informed buyer. Not everyone walking in the front door is informed nor serious.

For some people the $880k, price may be too high, for others it may be a bargain. There is more to buying a home than looking at what you think the home will sell for in the future.

Sunnyvale home values vs. time http://julianalee.com/sunnyvale/sunnyvale-statistics.htm (both quarterly and monthly)

Sunnyvale zip 94085 home values vs. time http://julianalee.com/zip-code/94085-statistics.htm

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Cell 650.857.1000

Over 20 years experience
Over 1,000 homes sold in Santa Clara County and San Mateo County
.
Web Reference:  http://julianalee.com
0 votes
Galia Taneva, Agent, Sunnyvale, CA
Mon Oct 14, 2013
There is a huge demand for these townhomes that is why the builder keeps increasing the price. Not sure about right now but there was a lottery last time when I was helping someone buy there.
The builder will not negotiate the price so if you would like to buy one of these townhomes you will need to pay the going price which will not change based on the fact that you do or you don't have an agent.
If you use Taylor Morrison's financing they will give you credit towards closing cost, but as my colleagues already mentioned you will pay most of the closing costs that on a re-sale property will be paid by the seller. There are re-sale townhomes in Sunnyvale right now that you can buy for less and have most of the closing cost paid by the seller (as it is customary in Santa Clara County).
Web Reference:  http://www.galiataneva.com
0 votes
Aparna Sayana, Agent, San Jose, CA
Mon Oct 14, 2013
Hi Gold,


In addition to all the good advises below, if you decide to go with an agent, the agent needs to accompany you in the first trip to the sales office to receive a commission and in turn give you a credit from their commission.

Feel free to call may anytime at 408-691-7717 to discuss further.

Best Wishes,
Aparna
http://www.realtoraparna.com
408-691-7717
realtoraparna@gmail.com
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Mon Oct 14, 2013
Hi Gold:

Thanks for your post. As my colleagues have already pointed out, the housing market is so strong that there is little, if any, incentive for a builder to provide any credit to a buyer at all. Given that the developer controls the sale in a new home's complex, going there with or without an agent is not going to change the structure of your sale. If you do have an agent, however, you are much more likely to have an advocate in your corner when it comes time to do the two most critical actions in your purchase:

1. Inspection of your home prior to close of escrow
2. Review or documents and be present at closing

I just helped a buyer purchase a home in a new home development. The developer was offering--through the mortgage company (Wells Fargo)--a credit of $2000 toward closing costs if the buyer chose to use Wells Fargo as the mortgage company.

On the other hand, I gave the buyer 1/2 of the commission offered to me as the buyer's agent--about $7500. Even a few years ago, buyers were not getting this type of credit from developers.

So, you see, in a new homes project, it makes sense to use a rebate agent to assist you. We can do the one thing that both the developer and the mortgage company cannot--we can rebate a sizeable portion of money back to you in your transaction.

If you'd like to learn more, give me a call.

Grace Morioka
Allison James Estates & Homes
Tel (408) 426-1616
Full Service at Discount Agent Pricing
0 votes
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