All-Cash Buyers and Multiple Offers: Changing the Face of San Carlos Real Estate

They’re Out There…

Since the outset of this recession, we’ve been inundated with negative news about stagnant economic growth, high unemployment rate, foreclosures, etc…   After listening to this drab news for so long,  you start to question why anyone would ever consider buying a home in this climate — or more important, how they could afford to do so.   It’s interesting talking with people lately — it seems like many have the impression that everyone around us is living on Top Ramen like starving college students.  That’s the power of negative news.

For those home buyers who are confident enough in their own financial situation to forge ahead in this market, it’s easy to get lulled into a false sense of complacency that the poor economy has weeded out much of their competition.    After all, just listen to all of that dire news!   But anyone shopping lately in San Carlos has quickly realized that a) they’re not alone, and b) there are some well-heeled buyers competing with them for the same homes.    One thing is for certain — the recession has done little to quell the occurrence of multiple offers… and yes, all-cash buyers in San Carlos.

Cash is King.

Since the beginning of this year, there have probably been a dozen or more homes sold in San Carlos where the buyer paid for the purchase in cash – no bank loan whatsoever.  And these are not just starter homes — the prices for these purchases ranges from the $700,000 to well over $1M.   That’s alot of cash!  This phenomenon is not unique to San Carlos, either; if you follow other hot markets like Palo Alto, Menlo Park, and Los Altos, it’s happening there as well — only with even more staggering amounts of cash.   It’s pretty mind-blowing.

Unless you’re putting down a substantial amount of cash yourself, it’s pretty much “game-over” if you’re competing against an all-cash offer, regardless of what price you’re offering for the home.   Why?

Contingencies?  Nah…

The biggest reason that cash is king in these situations is that it removes the financial contingency entirely from the purchase contract.  There’s no need for the seller to worry about whether the buyer can qualify for the loan, or if the home is going to appraise at the sales price, which significantly lowers the risk of the offer.   And some sellers are more than happy to pay a price for this lower risk — if you’ve been in this situation, you’ve found that the all-cash offer is not necessarily the highest offer, and yet they win virtually every time.

Another interesting phenomenon is that some all-cash buyers aren’t even requiring a property condition contingency either.  So if you’re a first-time buyer who has scraped together your 20% down payment and you’re up against one of these completely non-contingent (or “naked”) offers, unfortunately it’s lights-out. It’s that simple.

The Proper Perspective

It shouldn’t really be a surprise that this is happening.   After all, even if unemployment is running at 12%, that means that 88% of the population is still gainfully employed.  And let’s not discount the vast amount of personal wealth that was pocketed before the bubble burst a few years back.   There’s still alot of money out there.   That’s a fact.

But rather than marvel at where everyone is coming up with these mini-fortunes, it’s simply important to accept the fact that all-cash buyers are active in the market today.  And if anything, the recession has narrowed their focus toward communities that are better suited to withstand a recession — communities whose school district hasn’t been decimated by budget cuts, or whose downtown area is still thriving despite all of the bad economic news.

Places just like San Carlos…

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Where to Find Permit Information on San Carlos Homes.

Need Permit History?

If you’re buying a home in San Carlos, it’s sage advice to spend a little time researching the permit history on the place before you get too far down the road with your purchase.  Why?  Since much of San Carlos was developed in the 1940′s through the 1960′s, there’s a very good chance that some level of work has been done on the home — anything from simply replacing the roof, to remodeling a kitchen, and all the way to adding significant square footage.  It’s good to know whether this work was done with the blessing of the City Building Department, or whether it was done without their consent or knowledge.

A big reason why the City requires permits for home projects is that they want to ensure that the work is being done correctly.   If you look at a typical permit card, you’ll see that there are various sign-off points by the City’s building inspector that shows they have been monitoring the project from the beginning.  So a fully-permitted project will likely adhere to the building code that was in place when the job was completed, and minimizes short-cuts that the contractor might have been tempted to take.
… Click Here to Continue Reading

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A Great Opportunity in San Carlos: 1412 Howard Avenue

Great House, Outstanding Value

If you’ve been keeping track of homes that are selling lately in White Oaks and Howard Park, the 3BR/2BA configuration has been the “bread-and-butter” of the sales activity for the past 6 months.  This is partly due to the fact that there are so many 3/2′s in the area, but also because of the widespread “cross-over” popularity of this size home.  On one hand, it’s very desirable for first-time buyers (especially those with school-age children).   But it’s also a great stepping-down point for those who are looking to downsize but still remain in San Carlos.  I’ll be posting some prices in the coming weeks that will demonstrate how this surge in demand for 3BR/2BA homes in the flats has pushed pricing up to nearly $1M (and in some cases above) for this hot commodity.

Which brings me to my new listing at 1412 Howard Avenue.    It has many of the key features that today’s home-buyers are looking for:

• 3 bedrooms. Including a master bedroom suite.
• Extra permitted room. Ideal for a 4th bedroom or home office.
• Updated kitchen.   New countertops, cabinets, and appliances.
• Beautifully landscaped yard.  Newly stained deck, and the property borders the creek in the back!
• Extra storage.  Both front and back
• Outstanding location.   Just 2 blocks from Laurel.  An easy jaunt to Skinny Sippin’, Flight Lounge, or Refuge.
• San Carlos Schools.   Of course!

It’s a great opportunity for those families looking to land in San Carlos before the new school year kicks off.  And attractively priced at $850,000, it should fit nicely into the budgets of either first-time buyers, or the down-sizers.

Check it Out

Click here to see more pictures of this great home:   1412 Howard Avenue Virtual Tour.   The house will be open both Saturday and Sunday this weekend from 1-4 PM.  Hope to see you there!

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“Off-Market” Home Sales: Trade-Offs for Sellers, Benefits for Buyers.

On the Rise

When a home is sold from one party to another without listing that home on the Multiple Listing Service (MLS), it’s what we refer to as an “off-market” sale (it doesn’t matter whether a Realtor is involved in the transaction or not).  And while off-market sales still represent a small fraction of the total sales in San Carlos, they happen more often than you might think.   Probably the most common example of an off-market sale is when a person sells their home to another family member.   For obvious reasons, there’s no reason to list that home on the MLS.

But what about more “traditional” home sales that are conducted off-market?  For example, a seller enlists the help of a real estate agent to sell their home (to anyone) – but chooses to keep the listing off the MLS.  These types of sales have been on the rise recently, and it may seem perplexing at first blush as to why.   After all, why not take advantage of the red-hot market in San Carlos right now by getting as many buyers as possible competing for your home? Multiple offers are back, and some homes are fetching prices 5-10% above list when they go to multiple offers.

The Reasons.

There are many reasons why sellers choose to sell their home off-market, and they’re all very valid reasons.  Generally, they fall under three categories: … Click Here to Continue Reading

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Double-Dip Recession? It’s Why Some Buyers Are Still on the Sidelines…

Waiting out the Market.

Bottom of the market? Economic recovery? That’s not how a growing number of potential home buyers are assessing the current real estate market right now. Despite many indicators that have pointed toward a gradual recovery in 2010, there’s a contrary view that’s starting to gain some footing, and it’s making these buyers and real estate investors nervous: Double-Dip Recession.

What is a Double-Dip Recession?

Investopedia defines a double-dip recession as follows:

“When gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession.”

While nobody is standing up and saying that we’re heading back into a recession, the news this past week certainly raised questions about the validity of our current “recovery”, as this article from CNBC discusses: Double-Dip Recession Fears Creep Back into the Market. For some home buyers, this specter is enough to keep them on the sidelines, even despite record-low interest rates. Here’s why… … Click Here to Continue Reading

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Psst!!.. do you like what you’re reading? Click here to subscribe to the site for free, and you’ll get updates sent automatically to you. And for more information about San Carlos, be sure to follow the White Oaks Blog on Facebook and on Twitter.
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Looking for Open Houses in San Carlos? Just Remember “OH”…

Trouble Finding Open Houses in San Carlos?

For some strange reason, it has always been difficult to find a single website that lists all of the open houses in a particular community for the upcoming weekend.  Think of how useful that would be to get an up-to-the-minute list of what homes and condos are open this weekend in San Carlos!  Well, now you have it..  Introducing the Open House Link from the White Oaks Blog!  or, better known as the “White Oaks Blog OH.”

Just Remember the Letters “OH”…

I’ve always had the “Open House” icon on the right sidebar of the blog, which lists all of the open houses and condos in San Carlos.  But what if you’re not on the blog when you need that information?  What if you’re already in your car driving around looking for open houses?   Well, I have created a VERY easy to remember link that you can punch into any computer or smart phone:

http://WhiteOaksBlog.com/OH

This url is very cool because it’s a “live link“, meaning it’s updated continuously.    So as soon as an agent updates their listing on the MLS with new open house hours, they’re automatically captured here — without doing a thing.   This is especially useful because some agents forget to post the open house hours on the MLS until the last minute (I have been guilty of that boo-boo myself.)

Once you’re on the page, not only do you see what days and hours the home is scheduled to be open, but you also get all of the listing information on the home, just like you would if you were on the MLS — including pictures!

So check it out — all you have to remember is “WhiteOaksBlog.com” (which you already know because you’re here), and “OH” (for Open House), and you’ve got it!  Better yet, just bookmark it on your phone or computer now.  You’ll never have to hunt down a list of open houses in San Carlos again.

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Psst!!.. do you like what you’re reading? Click here to subscribe to the site for free, and you’ll get updates sent automatically to you. And for more information about San Carlos, be sure to follow the White Oaks Blog on Facebook and on Twitter.
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