Would I find a house in Santa Clara County with better neighborhood and school for about $325K with all cash? I can wait now till Winter.

Asked by Lakisha, San Jose, CA Thu Aug 23, 2012

Help the community by answering this question:

+ web reference
Web reference:


Sam Shueh’s answer
Sam Shueh, , San Jose, CA
Mon Sep 17, 2012
In the winter most unsold (uncommon) are OFF the market. The inventory for 2012-13 is predicted to be even less than before. The forecast for 2013 is homes will also have dbl digit appreciation.

FYI: The regular sales today are dominant 84%, followed by 14% short sales and 1.4% bank sales. Only 10% home owners are underwater. Most are not planning to sell. The underwater home owners in SJ will drop to ~5% next year.

Expect to pay the going price above asking price at above today's price.
You know the avg homes sold in San Jose, CA is $531,471 -Aug 2012
avg condo/town homes SOLD in SJ $389,174 -Aug 2012

Sam Shueh
Keller Williams Realty
1 vote
Eric Clayton, Agent, San Jose, CA
Mon May 6, 2013
Single family home may be tough unless you are willing to make repairs. If you are not opposed to condos, you should be able to find something nice that you like especially if you have all cash, but keep in mind that inventory is low right now. If you would like me to help you find something nice, email me at eclayton@Interorealestate.com

Thank you and happy house hunting! :)
0 votes
Shirley Cheng, Agent, San Jose, CA
Tue Sep 11, 2012
Hi Lakisha,

I've seen you post other questions before andI hope you are getting a better sense of what you are looking for. Yes you can find something decent for about $325k and yes all cash can make a difference if you are up against another buyer that has a loan. It just depends on what you are looking for. Finding a decent condo for that price would be the best option for you and most likely you will have to pay HOA fees at around $200-$400 per month.
0 votes
Michael Cheng, Agent, San Jose, CA
Sun Aug 26, 2012
I've very surprised by all the responses saying that cash doesn't get you a discount. I happen to work with lots of investors and when we deploy a cash offer correctly, we usually get a 5-10% discount against financed offers. Obviously, there's hardly any price advantage against other cash offers.

Of course, this is not a firm and set rule. It's just a limited sample of what I've seen with my clients. It's also likely that some agents are competing for owner-occupied homes (vs. investment properties). In those situations, cash doesn't always dominate, since owners have different preferences than investor sellers.

At the same, I've actually seen cash offers go above financed offers, even by as much as 10%, as the cash buyers bid far above the current appraised value.

For homes at your budget, you'll very likely see plenty of investors who would rather take that property and make it a rental. So, your cash advantage is effectively wiped out.
Web Reference:  http://www.archershomes.com
0 votes
charles butt…, Agent, san jose, CA
Thu Aug 23, 2012
Thank you for your question,Lakisha:

You have received some excellent answers from Carl Medford, Grace Morioka Ron Fehr and John Juarez.

The seller is looking for the most money from the sale of the house. The seller will not take a lower offer just because the offer is all cash.

Also, you will not be able to get anything that you like in a neighborhood that you like here in Santa clara County for only $325,000.

In our current market multiple offers with overbids above list price are the norm rather than the exception. It is not uncommon to be up against 10, 20, 30 offers or more. The seller has absolutely no problem selling the property. There is absolutely no reason for the seller to give up money for an all cash offer.

Where a large amount of cash can be helpful to you is even getting your offer accepted at all. Appraisals have not yet caught up with our market and often come in low. To even have any chance of getting your offer accepted you must be willing and able to make up the difference in cash between the appraisal and the sale price.

This winter, prices will not be any power than they are now. If demand drops, sellers either let their property sit on the market until they get an offer at least as high as the recent closed sales or they take thir property off the market.

In the media there are stories of a large amount of foreclosures that will come into the market. Most of those stories are poorly informed and misleading at best.

It appears that most of those remaining houses will be sold in bulk to Wall Street Hedge Funds and other very wealthy investors that have hundreds of millions of dollars to invest in Real Estate. Therefore, it is highly unlikely that we will even see those properties available for individual buyers.

Most of those properties will not be available for sale to individual buyers, they will only be available for sale to very wealthy investors or Wall Street Hedge funds with hundreds of millions of dollars to invest..

As the others said, I recommend that you select a REALTOR to represent you on the purchase of your home, and as a source accurate, fact based advice, not on the ill informed guesses of poorly informed reporters in the mass media.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Call Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
0 votes
Horse Trader, slow down. You have open your mouth so wide that instead of money, some horse ..... may drop in it.
Flag Fri Aug 31, 2012
Andrea Wince…, Agent, Milpitas, CA
Thu Aug 23, 2012
Hello Lakisha, it is possible if you are interested in a townhome which is a good starter home. There are many with 2-3 bedrooms and often have garages and a small private yard space. Please contact me through my Trulia profile if you would like me to email you some listings. Kind regards.
0 votes
The Medford…, Agent, Fremont, CA
Thu Aug 23, 2012
If by "house" you mean a single family detached residence with 3-bedrooms, then the answer is most likely “NO.” Even with cash, there are no listings like that in better areas with good schools. There is a rule in every corner of the Bay Area – the higher the local school scores, the higher the price per sq/ft for qualifying homes.

I disagree with the statement below that cash will get you a 5% better home with cash. As suggested by others, cash may win you a deal if you are going up against financed offers, but it won’t really get you a lower price or better in this current market. There are multiple offers on everything right now and, with approximately 31% of all sales in CA this past year being cash, you have a very good chance of getting into a bidding war with at least one other cash offer. At that point, all bets are off.

Find yourself a good buyer’s agent and have them start looking for properties that will fit your criteria. And be prepared to wait - as Grace suggested, this is not a race, it's a marathon.
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Thu Aug 23, 2012
Hello Lakisha and thanks for your post.

My pal, John Juarez, said it best in stating that whether it's cash or a mortgage, the seller doesn't really care because he is paid the money with a loan or a cash offer. The only time the "cash" issue becomes very important is when two buyers are both bidding about the same price and one is cash--in that case, the cash buyer wins because he/she can usually close more quickly AND there is no need for a loan. And, yes, Tina is right that a seller may--again, when faced with two offers on a home--accept a small discount in the price if the offer is all cash, but I think 5 percent is a bit much in this market.

Cash buyers are also desired when a home is in very poor condition because there are always worries that the home might not be able to be financed if in very poor or "tear down" condition.

If you're looking to live in the more popular or more desired sections of Santa Clara or in a single family detached home, a price of $325,000 is unlikely to be able to afford this type of housing. However, townhomes or, more likely, condominiums could be possible in a bit--especially if our market continues to abate.

So, first rule of business, hire a great agent to assist you, and then keep looking. A home purchase is not so much a "race" as it is a "marathon" and the ones that keep looking and keep going week after week are the ones that also get the homes. Good luck!!

Grace Morioka
Area Pro Realty-People's Choice
Rebates to Buyers, Low Cost Listings for Sellers
0 votes
Ron Fehr, Agent, Campbell, CA
Thu Aug 23, 2012
There is a saying, "Cash is King", but that really is a misnomer. All things being equal, meaning all terms of multiple offers being the same, then cash carries more weight. But as was said in a previous comment, outside of the seller carrying the loan, the seller is going to receive cash one way or another.

What is often more important then cash are the terms of the sale. Will you be able to close quickly? Are you willing to do a rent back to the seller if needed? Are you buying the property "as is" or are you going to expect everything to be perfect before the close of escrow?

You see, the terms can be more important than cash. Cash is great, but it's not the only consideration and is often not the most important issue to a seller.

Waiting until winter to get a better deal??? Again it all depends on the motivation of the seller. Generally there are fewer homes on the market during the winter (although I would say the school year) since most families don't want to be uprooted while children are in school. Since there are fewer homes to choose from, and at this time more buyers then sellers, I see no advantage to you waiting. Prices in Santa Clara County have generally been moving upwards, so you should buy when you find the right home. The cost of waiting will probably be more then any potential savings you may have envisioned. And that's not even counting the tax savings and appreciation you'll enjoy by owning sooner then later.

Bottom line; buy as soon as you can!
0 votes
John Juarez, Agent, Fremont, CA
Thu Aug 23, 2012
A cash is often more attractive than an offer that requires financing it the amounts are the same or very close. If the cash buyer expects a discount because of the cash, the cash buyer will probably be disappointed. In the end, the seller gets cash whether the buyer pays cash or the cash comes from a lender.
0 votes
Tina Lam, Agent, San Jose, CA
Thu Aug 23, 2012
Sure, you'll get about a 5% better home with all cash. At that price point, you'll be competing aggressively with all cash investors like several of my clients. Most likely, you'll be able to afford an older single family or a 2 bedroom condo.

You'll likely see prices go down during the winter, but you won't be getting a better house with the slim pickings.
Web Reference:  http://www.archershomes.com
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more