I am very pleased to announce my newest listing at 2079 Eucalyptus Avenue in San Carlos.  This five bedroom, four bath home was tastefully remodeled in 2001 and is located on San Carlos’ most famous street.

This home is available for private viewings prior to Sunday’s open house.

This property is offered at $1,475,000.

For all photos and virtual tours, please click here.

Just put a sign in the ground

I have many friends who think they are quite the comedians.  “Selling a home in San Carlos?  Bob, just stick a sign in the ground.” If only it were that easy.  Trust me, it’s tougher than it looks.  Even considering the intense buyer demand in San Carlos right now, the truth is that each house is different and requires its own unique strategy when coming on the market. Not every house is set up for multiple offers.  For example, your standard 3/2 at 1,500 square feet in White Oaks….price it for multiple offers.  A 3,300 square foot home in the hills with some updating and layout issues, you better build in some negotiating room….no matter how hot the market may be.

Assess the demand for your house

Step one is being realistic with the demand for your price range and location.  Understand that while demand is extremely high for San Carlos right now, the vast majority of high demand is in concentrated price ranges.  $800,000-$1,000,000 & $1,400,000-$1,600,000 are the hottest price ranges. Where is your home in San Carlos?  Howard Park, Oak Park and White Oaks are red hot right now.  While other areas are moving very well, they are not quite at the level of the flats of San Carlos.  Many sellers also have a tough time distinguishing between what they believe to be the ideal location, and what the vast majority of the potential buyers believe to be the ideal location. If your agent really knows San Carlos and is telling you that your particular property and location may not quite be as attractive as you may believe, listen to your agent.   For example, I have a few clients who believe that their views from on top of Crestview make their homes incredibly unique and can’t understand why anyone would prefer the flats over a home with their views.  In this case, two things can be equally true:  (1) these homes have tremendous views; and (2) the majority of potential buyers still prefer the flats.  Remember, not every buyer will put an emphasis on the things that you really like about your home.  The true question centers on isolating the percentage of buyers who will envy the strong characteristics and location of your home when assessing demand.

Is your home San Carlosed?

Once you have realistically determined the demand for your home you can look to a second level of scrutiny that I like to call “San Carlosed”.  You have a San Carlosed home if there are additions and modifications that don’t quite flow with the rest of the house.  You could also have unpermitted bedrooms, roof lines that go from a gable roof to a flat roof or a father-in-law who believes he is a contractor and doesn’t see the need to pull permits when tackling projects at your home.  If any of these are ringing a bell, it’s time to start deciding just how much to knock off your list price. The more San Carlosed your home is, the more of a shift you will need to make in the price.  San Carlos buyers are smart, they will pick up on these items almost immediately.

Strategy

It is wise to remember that even in a market that is moving as well as San Carlos is right now, not every property should have a strategy of gaining multiple offers.  In order to gain multiple offers you need to be in a location and price range of very high demand.  If you have a house outside of these parameters, you will need to examine the possibility that you may need to negotiate on the house.  This is usually a better strategy than pricing the house much lower than where you intend to end up solely to gain multiple offers because these homes never draw the massive overbidding and attention that the others do. In most of these cases, you will usually end up in a better position if you have patience and can build in some negotiating room.

Fed Up

If you had asked me a year ago where most San Carlos buyers were coming from, I would have told you that San Francisco was the clear front-runner. That is no longer the case.  As hot as our market has been over the first few months of 2012, Palo Alto’s market has been even hotter.  The amount of money being poured into Palo Alto real estate right now is unreal.  It is very close to rivaling the craziness of 2005.

Here’s the difference between the San Carlos market and the Palo Alto market:

In San Carlos, a 3/2 at 2,000 square feet comes on at $1,100,000, gets six offers and sells at $1,175,000.

In Palo Alto, a 3/2 at 2,000 square feet comes on at $1,300,000, gets twelve offers and sells at $1,600,000, all cash.

While this news is great for sellers, some Palo Alto buyers have had enough. The dream that was once Palo Alto for many, will remain just that. I have spoken to more than a handful of buyers at open houses recently who told me that they just finally had it with Palo Alto.  As one buyer told me, “You can only lose so many times in a multiple offer situation before you start to feel that you have an abusive relationship with the housing market down there”.  This frustrated buyer is not alone. About 50% of my current buyers looking in San Carlos originally started their search in the Palo Alto/Menlo Park area. Other San Carlos realtors have expressed similar sentiments over the last few months.

Why San Carlos?

That is really the key question. The answer is most likely a combination of (1) process of elimination; and (2) common ground between the two cities.

First, let’s look at other competing mid-peninsula towns.  Menlo Park is the first obvious choice because it shares a border with Palo Alto.  However, if you look closely at real estate in Menlo Park, the price difference between Palo Alto and Menlo Park isn’t as large as some may believe. The Menlo Park market is almost just as competitive as what is going on in Palo Alto.  Some people like to compare Menlo Park and San Carlos, but really there is no comparison as far as real estate goes.  Menlo Park homes sell at prices that are about 20% more than San Carlos.  In the end, many of the frustrated buyers eliminate Menlo Park almost immediately because they feel that if they are going to give up on Palo Alto altogether, they want a clear difference in what they are getting for their money and the competition they will face.  Menlo Park does not offer this type of break.

Moving up the peninsula, Atherton is the next town, which is obviously eliminated right away.  Redwood City will probably get some attention, but it most likely does not have enough in common with the buyers who originally targeted Palo Alto.  That leaves San Carlos and Mountain View. Both are on the receiving end of the overflow buyers from Palo Alto.  San Carlos certainly does not have the downtown of Palo Alto, but it does have a legitimate downtown.  It has excellent schools, a great community and has built an ever-increasing solid reputation.  In other words, there is enough there to pique the interest of the frustrated Palo Alto buyer. It is a learning process for these frustrated buyers.  They immediately pick up on two things:  (1) their money goes a lot further; and (2) it is more competitive than they thought, but they can handle it when compared against their experience in Palo Alto.

A Stunning Custom Home, Offered at $1,895,000

I am pleased to announce my newest listing at 111 Beverly Drive in San Carlos.  This absolutely stunning home is located in the heart of Devonshire Canyon.  Unparalleled attention to detail, high-end designer touches throughout, and a backyard that rivals an entertainer’s paradise is all yours in this truly special offering.

Here are just a few of the many wonderful features of this home:

*  Four bedrooms, plus a large office

*  Four full bathrooms

*  A luxurious master suite with vaulted ceilings, large walk-in closet and spacious master bath

*  A grand formal entry with towering ceilings

*  A large, park-like backyard, with patios, a bocce ball court and mature oak trees

* A fabulous great-room with the ultimate chef’s kitchen

Please click here to view all photos.

This home will be new on the market on Monday morning.  Please contact me directly with any questions on this fantastic property.

140 Pearl Avenue, San Carlos

140 Pearl Avenue, Offered at $869,000

This wonderful White Oaks starter home has been tastefully remodeled throughout.  This three bedroom, one and a half bath home has hardwood floors, a new kitchen and bathroom, designer touches throughout and professionally landscaped yards.

First Open House is this Sunday, April 29th, 1:00-4:00

* For more photos and a virtual tour for 140 Pearl Avenue, please click here.

2437 Hastings Drive, Belmont

2437 Hastings Drive, Offered at $995,000

This three bedroom, two and a half bath home features absolutely stunning views of the Bay, Mount Diablo, San Francisco and the Peninsula.  Other highlights include: gleaming hardwood floors, separate family, living and dining rooms, towering ceilings, and an expansive back patio.  The first open house will be this Sunday, April 29th, 1:30-4:30.

*  For more photos and a virtual tour, please click here.

249 West Poplar, San Mateo

249 W. Poplar Avenue, San Mateo Park, Offered at $2,249,000

One of the very best lots in all of San Mateo Park.  This 106 year old home sits on a massive, 24,000 square foot lot in the heart of San Mateo Park. A long driveway takes visitors past towering palm and redwood trees. This very unique estate has not been on the market for over 50 years. A truly fantastic offering.

Checking Boxes

The San Carlos market is moving full steam ahead.  Not only are multiple offers a frequent occurrence, but the amount of offers being put forth in some of these situations is nothing short of amazing. 27 offers, 14 offers, 12 offers, 9 offers….the list goes on. It can be a bit intimidating for many buyers.  However, I am here to tell you that your odds are better than you may think.  Remember, a multiple offer situation involves a lot of moving parts. The more parts you have under control, the better your odds.  If you can check “yes” to the list of points below, you’ll always have a good shot in any multiple offer situation. Below is a bit of lighthearted look at ten points to keep in mind when entering the multiple offer process:

The Top Ten

1.  You understand that Zillow is a terribly inaccurate predictor of home values in San Carlos.  Basing your offer on what Zillow has to say about the value is a surefire way to lose in the multiple offer process.

2.  You understand that submitting your pre-approval letter from internet sources such as Lending Tree and E-loan is not exactly going to get the job done.

3.  You understand that insulting or talking negatively about the house during the open house or in the presence of the owners during a visit is not exactly going to endear you to them during the process. You think this one would be obvious….but trust me, I wouldn’t have it on here if I did not see it happen many times.

4.  You understand the importance of signing the disclosures ahead of presenting the offer and how it relates to an as-is sale.

5.  You understand that if you do not have 100% confidence in your agent, neither will the sellers during his or her offer presentation.

6.  You understand data points and realistic comparable sales.

7.  You understand that “time” is your biggest advantage in preparing for a multiple offer situation. See new houses at the earliest opportunity.

8.  You understand that the highest offer doesn’t necessarily get the property.  Listen and understand the situation of the seller. Terms go a long way.

9.  You understand that in this environment, the listing agent will call and speak to your mortgage broker.  They should be able to leave no doubt that you will close the transaction without issue.

10. Finally, don’t be afraid to be aggressive if it is the house of your dreams, but understand there will always be another home to come along.

Offered at $1,195,000

I am proud to announce my new listing at 316 Chesham Avenue, in San Carlos.  This wonderful home is tucked away in Devonshire Canyon on a mostly level lot.  The home has been substantially remodeled with designer touches throughout.  This home must been seen in person in order to truly appreciate the serenity of the setting.  Some of the highlights to this home:

* Resort-style living

* 9,000 square foot lot/2,100 square feet of living space

* 3 spacious bedrooms/2.5 baths

* Master suite has his and hers walk-in closets

* Two car garage

* Smartly designed chef’s kitchen

* San Carlos schools and Carlmont High School

First Open House is this Sunday, 1:00-4:00

* For more photos, please click here.

Too many buyers, not enough sellers. Sound all too familiar? The reality is that our spring inventory is never going to arrive.  Click below for this week’s podcast.

Being Cautious With Multiple Offers

The San Carlos real estate market is red hot.  Multiple offers are common in San Carlos when the market heats up. However, sellers would be wise to be on the lookout for some increasingly used shenanigans in the multiple offer process.  Many buyers in San Carlos are floating from house to house after being on the losing end of previous multiple offer situations.  Some buyers grow irritated after losing a few multiple offer situations in a row and can use more aggressive tactics.  Agents sometimes feed off of the angst of their clients and will also employ more aggressive maneuvers with subsequent properties.

The Latest Tactic

The latest tactic seems to have migrated to San Carlos from nearby towns where the wealth is more substantial and the market is even hotter.  Because the wealth involved in transactions in those two towns is considerably more than San Carlos, many of their multiple offer situations center around having “all cash” offers.  Traditionally, all cash offers are considered the trump card in multiple offer situations.  They represent a much lower form of risk to the seller.  Not having a bank involved increases the odds, substantially, for a successful close of escrow.

Here’s what has been happening:  an offer is presented to the seller stating that the buyer will pay cash for the property.  When measured against other offers, the fact that the one offer is all cash is usually enough to sway the seller in favor of the all cash offer (all other terms being somewhat similar). Most agents in San Carlos will know enough to ask the buyer’s agent for a proof of funds statement.  The fact that a buyer’s agent would think that any listing agent would take an all cash offer without a proof of funds, is utterly ridiculous….but it is happening more and more.  In both of the recent instances I am thinking of, the listing agents asked for a proof of funds and in both cases the buyers were outraged and withdrew from the contract.  The buyers did not withdraw because they were outraged, they withdrew because they did not really have all cash.  Nonetheless, some are still accepting all cash offers with either not enough proof or from buyers who have no intent of actually using all cash to purchase the property.

If They Didn’t Have All Cash, How Would They Expect To Close It?

Good question.  Here’s how they are doing it:

One week after the contract has been ratified

Buyer’s Agent to Listing Agent:  “My buyers have decided that it would make more sense for them to get a small mortgage.  Their financial advisor told them they should keep a small mortgage for tax purposes.”

Listing Agent:  “Well I can understand that, but we accepted your offer on the condition that it was to be all cash.  My clients found less risk with your offer when compared against the others and it was the primary reason you got the deal.”

Buyer’s Agent:  “We are not going to close the deal without the financing.  So you can risk going back on the market, after losing all of your momentum and try and recapture something close to what we have agreed to pay, or you can allow us to put an appraiser in your client’s house and close this deal right on time.”

…and at that point, the Buyer’s agent has them.  Putting the property back on at that time could result in a much lower purchase price.  The sellers may be entitled to keep the buyer’s deposit (depending on the other terms of the deal), but overall it represents a tremendous risk for the seller.  The buyer’s agent knows that the seller will acquiesce to the buyer’s demand because it will still be the option with the least amount of risk.

Dirty Pool

In the end, it’s not the buyer or seller who get the short end of the stick, although the seller may feel like he or she was taken for a ride.  Those who truly lose out are the other bidders who submitted their offers in good faith. It’s dirty pool in the world of multiple offers. In the legal world, it’s called fraud.  Unfortunately, there is really no way to prove intent.

It Will Get Worse

With the market tightening around inventory levels at historic lows, the pressure in multiple offers will increase as well.  The tactic discussed in this post is just one of many aggressive tactics that are being used. Be absolutely certain that you and your agent have discussed all possibilities surrounding a multiple offer situation, both on the buy and sell side.

I generally do not enjoy writing posts that reflect negatively on the happenings in our market, but in order for this to be a continued, balanced assessment of the San Carlos real estate market, I feel compelled to write about both the good…and the not so good. More to come on multiple offer situations in the weeks ahead.

Click here to download a copy of the 2012 San Carlos Real Estate Market Trend Report.  This customized report has all of the latest information on the San Carlos real estate market.