San Carlos Real Estate Agent, San Carlos Realtor The Stakes are High for San Carlos Home Buyers. | The White Oaks Blog
San Carlos Real Estate March 29, 2012

The Stakes are High for San Carlos Home Buyers.

by Chuck Gillooley

19…

That’s the total number of single family homes for sale in the entire city of San Carlos at the time of this post.  That’s the lowest number of listings that I can recall seeing since…. well, ever.  That number may increase by a handful as the weekend approaches, but even then it serves to underscore the rising stakes that the ever-growing number of  home buyers in San Carlos are facing right now when they step to the plate and write an offer on a home.   Here’s why…

The other night I participated in the feeding frenzy offer presentation on a single family residence in San Carlos.   There was no doubt in my mind that this home would fetch multiple offers in this market.    Based on the satisfactory location and condition of this home, combined with the sheer lack of competition, I figured we’d be one of 5 or 6 offers on this place.    I was dead wrong.

By the time the deadline drew to a close, there were 11.  Ouch…

Give it Away.

Aside from a blowout offer price, there was one characteristic that the handful of offers that made the final cut shared:  Terms.  Or I should say, lack thereof.    Not only were these offers way over the list price, but they had given away either their right to either a property condition contingency or their finance contingency to make their offer even more attractive.   I would also imagine the close of escrow was as aggressive as they could cajole their lender into committing to.

Terms and contingencies are the teeter-totter of risk in a real estate transaction.   The more contingencies that are loaded into the offer, the lower the risk is for the buyer — but the risk then becomes inversely higher for the seller.    Why?  Because the more contingencies that there are in a contract, the property remains in a limbo state in the sale longer, and the more avenues the buyer has to back out.

Conversely, an offer with fewer contingencies puts the risk squarely on the shoulders of the  buyer while coincidentally making the offer more attractive to the seller.  It’s this latter scenario that makes most home buyers queasy.

Not For the Faint of Heart.

In this market today, there are a LOT of buyers who have San Carlos at the top of their list, which is part of the reason why the inventory is so unbelievably low right now.  But a significant portion of that group  are first-time buyers, and this is not a friendly market for them right now.     The prospect of making the largest financial decision of their lives is nerve wracking enough — now imagine having to take that first tight-rope walk without the safety net (contingencies) that they expected to have, and you can see how intimidating the stakes have become.

Am I recommending that you throw all caution to the wind and start writing non-contingent offers?  No, of course not.  The ultimate irony here is that when you’re in the process of writing up your offer, you’ll be asked to sign an advisory that basically states that you may be entering a market with multiple offers, and that if you choose to dive in without your contingencies you are doing so against the advice of your broker.     And I’ll stand squarely behind those lines.

But you know how what’s in between those lines.
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Comments 8
  • Wow, reading your blog makes me very very happy that we bought our house back in 2009. We lucked out with a great house and count our lucky stars every day that we live in San Carlos, we love this town! 🙂

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    • Your sentiment is shared by many in San Carlos. That’s a big part of the reason why so few homes are for sale right now. Nobody wants to leave!

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  • I too am glad that I bought in San Carlos, albeit in 2011. I heard that 919 Woodland had 28 competing offers. I’m sure the 2 other currently available places in the San Carlos flats (1009 Walnut and 1532 Greenwood) will go with multiple offers too.

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    • Correct on all counts. 919 Woodland did get 28 offers, and I fully expect that both homes on Greenwood and especially Walnut will garner quite a few offers. It’s a great time to be a seller!

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      • Looks like 1532 Greenwood just went on sale. Wonder why 1009 Walnut is still available? Anyone in the know who can share without violating confidentiality agreements? Could it be that a bank sale takes just that much longer?

        On a related note – I heard that 1357 Woodland had 6 competing offers – can anyone confirm this?

        Note – I am not an agent, just a curious cat in the San Carlos market.

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        • Marky,

          Sounds like you are pretty well plugged in to this market! I can’t confirm the number of offers for Woodland, but I heard the same figure that you did. And you’re probably correct about 1009 Walnut. The listing agent told me that the bank would likely counter every offer that was received with a “best and final” request, and then pick the winner from that. So I would imagine it’s somewhere in that process. I can’t believe it’s still active due to lack of interest. The place was packed both times that I went through it.

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  • Chuck, you’d never know conditions such as we are “enjoying” in San Carlos (multiple offers, homes selling off market, etc) are happening according to national news reports. It is sad that they seem to be focused on the gloom and doom of the troubled national real estate market and should perhaps WANT to report on some positive news that is actually bucking the trend.

    We are so happy we didn’t get the homes we lost out on in competition in San Mateo. Those homes, though appreciating, haven’t done nearly as well as the wonderful San Carlos home we landed in May 2003, competing against only 1 other couple. Even according to Zillow, but also based on homes that have recently sold on and around our street, we have realized on paper a 60% increase in value.

    But those who are smart and willing to compromise a little on some aspects are still going to do well even buying now in San Carlos.

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    • That’s true, and a big part of the reason is that this strong market is really only being enjoyed by the immediate Bay Area right now. My parents live in Auburn, and there are many homes that are still sitting after 2 years on the market and countless price reductions.

      One of my clients who is planning to move back to the Bay Area from LA can’t do so until he sells his home down there — and it’s almost as bad.

      The news tends to use the national average on key parameters to make their judgement on the health of the housing market. And unfortunately, most of the country sans New York and the Bay Area, are not feeling the impact of the rebound yet.

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