|Fall Real Estate 2005
Publication Date: Wednesday, October 12, 2005
Lessons from recent homebuyers
by Carol Blitzer
Buying a house can feel like a full-time endeavor. Many spend every weekend traipsing through open houses, making quick decisions to bid or not. But, even in a rapidly changing market, hundreds got lucky -- and actually purchased a house recently in this competitive area.
To find out what brought success, we asked a few what they learned in the homebuying process. What did they wish they'd known before they started? Here's what they said:
** Look for a house that's over-priced.
Paul Martecchini scored with a good-sized Eichler with an atrium in Mountain View. A self-described "veteran of real estate," he had owned three previous houses, the last a Victorian in San Francisco.
"We went in with very low expectations," he said, and looked for about six months, with his partner, Michael Wlodkowski. "You have to get a sense for what's a good or bad value. There's no substitute for going to lots of open houses," he added.
What they ultimately found was a house they felt was over-priced, and therefore drew no buyers. "That gave us leverage. If you buy a house that's over-priced, it could be a winner," he said.
As someone who's fixed up houses before, he wasn't daunted by the work required, "as long as the house has good bones. ...It's already worth more than we paid for it," he said.
** Do your homework, even if you live far away. Contact everyone you can think of to help you identify a town, a school district, a neighborhood -- even a block.
Tonya and John Cummings did most of their homework from afar. Although John has worked for the same company, the family moved four times in five years. Each time they bought a house.
"We put off California as long as we could. We got a nice package from the company that helped," Tonya said.
In addition to her husband researching the area while he was commuting from Washington, she spent time with their real estate agent and on the Internet. With three children under the age of 5, she was most interested in the local Moms' club, as well as the recreation department. Her Web surfing helped her narrow down the search.
"You can get information on neighborhoods and schools, things that make you happy in your daily living," she said. "We're right on the line of Los Altos and Mountain View. We have all the benefits of Los Altos but the house cost a lot less. We have good schools, we're close to everything. There's no commute," she added.
** Realize that if your agent isn't working well for you, you can switch.
The question of whether or not to use a Realtor is a tough one. Sook Choi started looking for houses with a friend who had a small real-estate company that wasn't very well known in Palo Alto.
After about a year of losing homes -- even when she bid 20 percent over the asking price -- Choi hooked up with a Realtor from a large, local firm. Eventually she purchased her Palo Alto home, with eight people competing for a house that "almost looked like a ghost house," she said.
Although she bid over the asking price, she said "I'm very happy with it now."
** You don't have to use a Realtor.
Tirzah Lassahn and her husband count themselves "really lucky" that a friend of a friend was selling a house in Menlo Park without a Realtor. "There were no commissions, no people traipsing through. He came up with a number, and we said, 'Sold. We'll do it,'" she said.
"It was really easy, seamless. ...Everyone was so envious of us."
Lassahn is still carefully watching the market, because they're thinking of selling their house in San Bruno. "As a seller, I'm eager to get the best price," she added.
** Work with a real estate agent, but don't sign a multi-month contract.
Often an earlier experience with a real-estate agent can color one's decision about working with an agent now. Rosie Concepcion said she learned a lot when selling her home in Southern California.
"I learned a lot about real estate law. I had a very aggressive real estate agent who wanted to sell my home at any cost. I needed to make a good return on my investment, that was reasonable.
"Because my home wasn't a median price range, I had to strategize differently. As a home seller I did make an error: I will never sign a multi-month contract with an agent again," she said.
Despite her negative thoughts about selling in Southern California, she had nothing but praise for her agent, who helped her buy her Menlo Park home.
** Don't trust home inspections.
Concepcion's one caveat for home buyers: Don't trust the home inspections. "You may pay $800 for a report. That doesn't mean 100 percent of the items will be tested or investigated," she said, noting that they only did a representative sampling to see if all the windows and doors were operable -- and that was on a two-year-old house. The report did not include appliances or the roof, she added.
** Find the right agent who can help you locate your dream house -- even if it means avoiding houses that need a lot of work.
Stephen Lacy credits his agent with helping him find just the house he and his wife were looking for. They knew what they wanted: three bedrooms, two baths, walking distance to downtown Mountain View, all at a reasonable price.
There's no way they'd find it, at a reasonable price, the agent informed them. But, because he was selling a home, the agent encouraged the couple to look in a higher price range. "The agent knew the house I owned would fetch more," Lacy said.
The couple stopped going to open houses every weekend and instead, the agent showed them one house every two to three weeks. After a couple of months, the couple saw a house that met all of their criteria. "We said, if we don't make an offer on this, we should stop looking," he said.
But they knew a second open house was planned for the following weekend. They mulled it over, then went for another walk-through.
"We fell in love with it again," he said, adding that the extra week had given them a chance to evaluate just how much they wanted it.
"We had looked at so many houses where you looked on Sunday, and had to write a check on Tuesday. I found that situation really difficult, especially where there were compromises. You had one day to figure it out," he said.
The agent helped them clarify their position, when he asked "are you willing to lose this house over $10,000?"
Lacy and his wife made a "sharp offer," where they offered x dollars over the highest offer received, up to a certain limit. The sellers counter-offered, based on a hypothetical higher bid. After declining to show proof of this offer, they agreed to lower their counter.
All of this negotiating was done behind the scenes, by the real-estate agents. Lacy seemed almost in awe of his agent, noting "that guy loves negotiating."
Unlike Paul Martecchini, Lacy was put off by the thought of a fixer-upper, or certainly by a teardown. "I saw a teardown for $700,000 that would take $800,000 to build a three bedroom, two-bath house. You can't sell a house in Mountain View for $1.5 million," he said.
"We looked at a lot of houses that needed repairs. It was very discouraging. Repairs are so expensive in the Bay Area," he said.
In the end, though, Lacy has only one regret about buying a house. "I'm glad I got in (in 1999). I wish I had gone in earlier."
Assistant editor Carol Blitzer can be reached at email@example.com