Silicon Valley Real Estate & Miscellany

Disappearing Affordability in San Jose, CA.

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Thu, 13 Jun 2013 22:21:59 -0700

Disappearing Affordability in San Jose, CA.

What is the natural consequence of rising home prices? It's diminishing affordability, and that's what is currently happening in the Silicon Valley and San Jose, CA. And, it's happening quickly as the graph below shows. San Jose, CA is one of the most affordable cities in and around Silicon Valley

But the $400,000 Single Family Residence will soon be a memory. Furthermore, if mortgage interest rates increase--and most pundits believe they will as the Fed stops buying mortgage bonds and as the economy improves--the increase will raise loan payments and further reduce housing affordability. Hopefully, the increase in rates is gradual so the real estate market can adjust without a sudden shock.

That's where our market is headed. And that's a typical market for this area. Eventually only well-priced listings in good condition will sell, and buyers will have a good selection of homes from which to choose.

How soon will that happen? Beats me; I'm a Realtor not a forecaster. But I don't think it'll happen this year.

Never a dull moment.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

408-373-4411; e-mail

Listings and Sales of Small Apartment Buildings in Silicon Valley

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Thu, 06 Jun 2013 18:18:52 -0700

Listings and Sales of Small Apartment Buildings in Silicon Valley

A well-qualified, highly-motivated current and former client and I have been trying unsuccessfully to find a small apartment building. We'd like to find a 3-10 unit building with a least one 1 bedroom unit for her personal use while she's in town. She's PhD computer scientist working in robotics, but she spends much more than half of her time outside the U.S.

The graph shows why we're having difficulty finding a good property. It shows the number of New Listing and Closed Sales of small apartment buildings (3-10 units) in Silicon Valley from January through May each year from 2004 through 2013. "New" listings refers to 3-10 unit apartments listed on the Multiple Listing Service For Sale during the time period shown, not property that was already on the MLS from a preceding months. For this report "Silicon Valley" includes the following cities, all are within acceptable commuting distance to her Menlo Park office: Menlo Park, Palo Alto, Mountain View, Sunnyvale, Redwood City and Atherton.

In 2013, 35 small apartments have been listed on the MLS in these Silicon Valley cities. That's 60% fewer than the 10-year average of 88. Thirty-two have sold. A real estate market doesn't get much tighter than that.

What to do? We may need to contact owners directly, probably by mail. But the probabilty is low of finding an owner of a building that: (a) is thinking about selling it, (b) she likes, (c) responds to direct mail, and (d) agrees to a market value price. But direct mail may be better than passively waiting for listings to come onto the market.

I may even resort to Craigslist with an "Apartment Wanted" ad. It may be interpreted as a listing solicitation, but it isn't.

Any other ideas to find a small Silicon Valley apartment building to purchase are appreciated.

All data are from the local MLS; MLSListings, Inc.

Lloyd Binen

Broker/Realtor/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070-4046

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

Wordless Wednesday; Sometimes Things That Don't Smell Fishy, Are Fishy

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 01 May 2013 10:48:19 -0700

Wordless Wednesday; Sometimes Things That Don't Smell Fishy, Are Fishy

Lloyd Binen

Broker/Realtor/DRE 00572654

Certified Realty Services

19200 Shubert Drive

Saratoga CA 95070-4046

Certified Residential Specialist (CRS); Graduate Realtors Institute

408-373-4411; e-mail

Is the Federal Reserve Blowing a New Silicon Valley* Housing Bubble?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Thu, 25 Apr 2013 11:20:56 -0700

**Is the Federal Reserve Blowing a New Silicon Valley* Bubble?**

**That's almost the title of Edward Pinto's Op-Ed in the Wall Street Journal a few weeks ago. It caught my attention because I've been wondering the same thing about Silicon Valley. He was opining about the national** real estate market, not just Silicon Valley's. Edward Pinto was the chief credit officer at Fannie Mae from 1987 to 1989, and is now a resident fellow at the conservative American Enterprise Institute.

As the nearby graph shows the Median Sales Price of Silicon Valley homes has increased rapidly. Homes in subdivisions that I think of as, say, $900,000 are listed for $1,100,000, or more, and are selling immediately with multiple offers.

**I'm having a deja vu. The jump in prices and my feeling of bewilderment reminds me of the feeling I had during the 2002-2006 bubble.** Could this be another bubble?

Here's some of Edward Pinto's opinion about the national real estate market:

The Federal Reserve is keeping interest rates lower than they've been in 100 years. If mortgage rates increase to 6.0%, which is lower than the average rate from 2001-'09, affordability will become a major obstacle for home buyers. He calculates that incomes would need to increase a third, or home prices would need to decline a quarter to keep affordability at its current level. But incomes have been stagnant and employment growth has been anemic.

He thinks the increase in home prices is not due to improvements in the underlying economy. Rather, it's due to artificially low interest rates resulting from the Fed's quantitative easing; that is, their continued purchase of mortgage-backed and Treasury securities.

**I don't think that's true in Silicon Valley, yet. The underlying economy, income and employment growth have been so strong.** But, the Silicon Valley real estate market needs to cool down and rest to remain healthy over the long term. Especially because small increases in mortgage rates cause large hikes in mortgage payments because the loans needed to purchase our homes are large.

If home prices are increasing in your market, is it due to improvements in the underlying economy, or because of artificially low interest rates?

Lloyd Binen

Realtor/Broker/DRE 00572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070-4046

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-mail

Median Sale Price data are from the local Multiple Listing Service, MLSListings,Inc. The number of sales is shown in the parenthesis next to the date.

FDIC is Filing Claims Against Real Estate Agents and Appraisers

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Mon, 22 Apr 2013 10:22:23 -0700

FDIC is Filing Claims Against Real Estate Agents and Appraisers

That's the attention-grabbing subject of an e-mail I received last week from the California Real Estate Legal Alliance. They're the attorneys affiliated with my E. & O. Insurance Company; it's the E. & O. company endorsed by the California Association of Realtors. The e-mail says:

"Federal Deposit Insurance Corporation is filing lawsuits against agents and appraisers arising out of allegedly fraudulent transactions. The FDIC is reviewing transactions after foreclosures including HUD-I's. The FDIC has been filing lawsuits against agents and appraisers when the FDIC believes that there is a fraudulent transaction, including inappropriate commissions, payments on costs on the HUD-1. Claims against appraisers are for inflated values."

Reading between the e-mail's lines, it sounds like the FDIC is looking for a fraud scheme that may have occurred, but very infrequently in Silicon Valley during the real estate bubble. By including appraisers, HUD-I and payments of costs it sounds like FDIC is looking for a lender fraud scheme that was popular in the late 1970s, not 2002-2006, at least in Santa Clara County. The scheme they're looking for was first proposed to me by a fourplex investor in 1978, but I declined to participate.

Here's the fraud I think FDIC has in mind. The buyer and seller agree to one purchase price, but that price is lower than an inflated contract purchase price. If the property appraises for the inflated price, the buyer gets a loan based on the inflated appraised value and receives cash back from the seller at, or immediately after, closing. If the cash back comes through the escrow it's funneled through payment or payments to some phony third-party such as a contractor, or maybe an inflated commission. The seller agrees to this fraudulent scheme because the secret price is market value, or slightly hgher. And they don't realize they'll pay capital gains taxes on the inflated price which is used on HUD-I. And they have a listing agent who doesn't value his/her license.

In Santa Clara County most buyers were satisfied with zero down payments and non-recurring closing costs (NRCC) paid by the seller. They usually didn't ask for cash back. No down with NRCC paid by seller was available legitimately, without defrauding the lender.

There was plenty of lender fraud during the formation of the housing bubble, but most of it wasn't this inflated purchase price and appraisal variety. Most of it occured in the lower-half of the market in parts of San Jose. Borrowers lied about their income to qualify for loans while everyone else looked the other way. Why stop the party when everyone was making money? Everyone except the poor taxpayer who ended up on the post-party clean-up committee paying $140 Billion bill to bail out Fannie and Freddie, plus the bailout out of Wall Street Investment Banks.

Even though FDIC seems to be searching for the wrong kind of fraud, I hope they're well-staffed. Even a blind squirrel eventually finds the acorn. From my perspective it's long overdue. If escrow files had been audited promptly and fraudsters discovered and given jail time, the boom and subsequent bust would not have been as severe as they were.

The temptation to make easy money fraudulently may have been resisted if potential fraudsters thought they may be caught and jailed.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

When a Rent-Back Agreement is Needed, Incorporate it into the Purchase

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Sat, 20 Apr 2013 08:28:15 -0700

When a Rent-Back Agreement is Needed, Incorporate it into the Purchase Contract.

It's not unusual for an owner to need to remain in their home for awhile after closing the sale of their personal residence. Most State Associations of Realtors provide a standard, fill-in-the-blank, "Seller in Possession" or "Rent-Back" form to formalize that agreement.

But, in the old days--before "Rent Back" forms--the listing agent would simply squeeze the following sentence into the space above the seller's acceptance signature as a counter offer: **"Seller reserves the right to rent-back for up to 30 days at buyer's new PITI."** Listing Agents just squeezed whatever they wanted into wherever it fit. Counter offer forms didn't come along until 1981 in CA. Hand-drawn arrows to scribblings in the margins, with initials and dates, was accepted practice and worked fine.

At least until closing when questions about the Rent-Back details arose.

What happens if the seller doesn't move out on time?
What happens if there is damage to the house after closing caused by the seller or seller's movers?
Is there a security deposit, how much, and who holds and controls its disbursement? (Some escrow companies in Santa Clara County stopped handling security deposits because disbursement disputes were so common.)
What happens to the rent if the seller needs fewer days than the Rent-Back agreement grants?
What happens to the duration of the tenancy if an abolute rental termination date is specified, but escrow closing is delayed?
And, of course, can the buyer store some stuff in the garage while the seller is renting back?

Fortunately these and other questions are answered in a completed standard Rent-Back Agreements. The forms force the terms of the Rent-Back to be discussed and to be mutally agreed upon. That avoids messy disagreements at closing.

So I was surprised when I got a multiple counter offer yesterday which, among other terms, stated: "Seller reserves the right to Rent-Back for up to 45 days after close of escrow." That counter offer prompted this post.

Why risk a possible dispute at closing? Doesn't it makes more sense to incorporate the terms of the Rent-Back agreement into the purchase contract? That's when everyone is motivated to solve problems in a mutually acceptable manner.

Agents can help avoid disagreements at closing by incorporating the terms of the Rent-Back agreement into the offer.

As an Aside: In a sign of the times in Silicon Valley, my buyer rolled over and accepted the counter offer contingent on ratification of a Rent-Back agreement attached to and incorporated into his counter to the counter. It gave the seller FREE rent for 45 days after closing with NO security deposit. (Tough negotiator, huh?) That's not uncommon in the current market. Perhaps that was the listing agent's strategy.

___________________________________________________________________________________________________

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtor's Institute (GRI)

408-373-4411; e-mail

How Would You Respond to This E-Mail?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Fri, 19 Apr 2013 08:12:56 -0700

How Would You Respond to This E-Mail?

I received the following e-mail message from a person I don't know. It's probably a shotgun broadcast to every agent in this area, although I'm not positive. How would you respond?

"Dear Lloyd,

REVestors LLC continues to work with agents who want to partner with us to buy more houses. Ugly houses, fixers, REOs, regular sales, short sales, pocket listings are all ok. We like you to represent us make double commissions. We like to pay you commission to bring us deals. Single family houses, townhouses, condos, multi family houses.

If there is a chance we can make a fair margin, we are interested to hear from you. When we buy houses, we make quick decision, buy AS-IS, pay cash, close in a few days.

For more information on how to represent us to buy more houses, please visit our website at: www.RevestorsLLC.com

Look forward to hearing from you and taking a look at any deals you have."

Regards,

Jake Zhang – Acquisitions

www.REVestorsLLC.com

408-230-6566

info@REVestorsLLC.com

I did respond telling the sender that I was not interested and asking for his permission to re-print the e-mail in this blog post, which he granted.

How would you respond to this e-mail if you received it?

____________________________________________________________________________________________________

Lloyd Binen

Broker/Realtor/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070-4046

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

Cash Purchases of Santa Clara CA Homes Reach One-Quarter of all Sales

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Thu, 18 Apr 2013 12:50:23 -0700

Cash Purchases of Santa Clara CA Homes Reach One-Quarter of all Sales.

Twenty-five percent of all Single Family Residence, Condo and Townhouse purchases in Santa Clara County, CA were cash transactions in March 2013, according to the local Multiple Listing Service, MLSlistings, Inc. Surpisingly, many home buyers were not attracted to historically low 30-year fixed rate mortgages under 3.75%.

The Graph shows the increasing percentage of Single Family Residence, Condo and Townhouse purchases that were cash transaction in Santa Clara County. The percentages in February and March '13 were 24.1% and 24.4%, respectively. The total number of sales is shown in the parenthesis next to the date.

There is no way of knowing how many of these transactions used cash that was acquired from home equity lines of credit or "cash-out" refinances secured by different property. That financing method is used by investors in order to make their offer attractive to the seller. An "as is" cash purchase with a quick closing allows the investor to negotiate the lowest possible purchase price.

Santa Clara County, located in South San Francisco Bay region, includes roughly 75% of Silicon Valley. Stock options are used by high technology companies to attract and compensate their talented workforce. No doubt, some portion of the purchases used cash from the sale of stock. I have clients who have purchased homes for cash from the sale of their stock.

This area is also attractive to rich foreign investors, especially from China, who make cash purchases.

Finally, there is a lot a wealth in Silicon Valley. With Bank savings rates below 1% savers look for alternative investments. Stock market gyrations scare some investors who prefer tangible assets, especially real estate. After all, real estate values have historically appreciated greatly in Silicon Valley, except between 2006 - 2011. It was these cash investors who quickly put a floor under the low-end of the Santa Clara County real estate market, especially in parts of San Jose. In 2008 and '09 lenders had to reduce REO prices 50-60% off the last purchase price to sell them once loosey-goosey credit standards for mortgage loans disappeared. Cash investors purchased the homes as long-term investments, not "flips", and that stopped the price decline.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070-4046

Certified Residential Specialist (CRS); Graduate, Realtors Institute (GRI)

408-373-4411; e-mail

Wordless Wednesday; Ceramic & Paper Mache Artist on Venice Beach, CA

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 03 Apr 2013 10:40:48 -0700

Almost Wordless Wednesday; Ceramic & Paper Mache Artist on Venice Beach, CA

I've been in Venice Beach, CA since Saturday visiting my son and supporting some of the local beach vendors. The business card for www.loscalavera.com says: " Watch out for Fake Imitations; Say No To Piracy". I did watch out for "Fake Imitations" and bought two authentic Calavera skulls.

Gardening in Silicon Valley; Mountain View, CA Plant Exchange 3/30/13

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 27 Mar 2013 17:42:31 -0700

Gardening in Silicon Valley; Mountain View, CA Plant Exchange 3/30/13

You don't need to have a green thumb to look like a Master Gardener in Silicon Valley. Mother Nature has done most of the hard work by bestowing what's needed: fertile valley soil, temperate climate and lots of sunshine. That's why we were dubbed "Orchard Valley" and "The Valley of the Heart's Delight" before we were called "Silicon Valley".

Silicon Valley plants grow so easily and quickly that gardeners, like me, always have clippings and cuttings we've removed from plants to prune and groom them. Many gardeners hate to throw them into the garden waste. Even though they will be recycled into compost, the clipping can be planted and grown into beautiful plants. Especially the easy-to-grow-cuttings from succulents that fill my yards.

Some brilliant gardener (in the East Bay, I think) came up with the terrific, much-needed, idea for a Free Plant Exchange. That's right...FREE. Well...technically it's a trade. Donate your excess clippings and cuttings (which you'd put into your garden waste anyway) and receive someone's else donated clippings and cuttings to plant and grow in your garden.

How perfect is that? A reciprocal relationship exchanging garden waste for new life and beauty. The salesman in me needs to elaborate all the benefits:

You're giving new life to clippings and garden waste that would otherwise be disposed of;
You're helping make someone else's garden beautiful;
You're making some other gardener and their garden-loving guests happy and appreciative of nature's beauty;
You're saving someone else's garden waste and growing it into a new, beautiful plant that diversifies your garden;
You and your garden-loving guests receive the joy from the beauty of the new plant.
You're growing plants with nectar for bees and butterflies, seeds for birds, and converting carbon dioxide to oxygen; and
IT'S ALL FREE.

Seems like it ought to qualify for the MacArthur Genius Award.

Anyway...the plant exchange is this Saturday March 30, 2013 in the Community Room at the Moutain View Public Library from 12:00 PM until 4:00 PM. If you donate your clippings or cuttings, you may take home someones else's clippings and cuttings. If you can label your donations with the plants' names, it's appreciated. Information about Plant Exchanges in general can be found here.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga CA 95070

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

The Median Sales Price of Silicon Valley Home Reach Pre-Bust Levels

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Tue, 26 Mar 2013 09:07:13 -0700

The Median Sales Price of Silicon Valley Home Reach Pre-Bust Levels.

The graph shows the Median Sales Price and the rolling six-month average for Single Family Residences sold in Silicon Valley from January 2004 through February 2013, according to the local Multiple Listing Service, MLSListing, Inc.

Home sales in the following cities are included in "Silicon Valley": Palo Alto, home to Stanford University and the birthplace of Silicon Valley; Los Altos; Mountain View; Menlo Park; Sunnyvale; Santa Clara; Cupertino and Saratoga. I haven't included San Jose, the nation's 10th largest city even though it has dubbed itself "Capital of Silicon Valley". Most locals don't consider it in Silicon Valley, but it's arguable.

Several factors have contributed to the increasing home prices in Silicon Valley:

The declining inventory of homes For Sale which began in 2010--a year before it was prevalent nationally-- and has continued unabated since then. That has limited the "supply" of homes For Sale.
Buildable land is scare. Silicon Valley is squeezed between the San Francisco Bay on the East and Coastal Mountain range on the West. New home construction is often confined to small parcels of land where existing structures are razed, then re-developed often as townhouses.
Employment in the technology sector has been robust with companies like Apple, Google, Facebook and scores of others hiring and growing. To attract the most talented employees technology companies pay high salaries. Those high incomes allow home buyers to qualify for large loans.
New technology employees are typically young; they're in their prime "household formation" years. At this time most would rather purchase a home than rent one. A few years ago most preferred to rent.
Historically low interest rates have reduced the cost of home ownership;
Residential rents are expensive and they continue to rise;
Many home buyers have lots of cash for large down payments.
Finally and very significantly, there has been a massive shift in confidence in the real estate market, and that seems to feed on itself exponentially. Most people think the real estate market and home prices already hit bottom, and that waiting to purchase a home will result in paying higher prices.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

What Does a Duty of "Honest and Fair Dealing and Good Faith" Mean?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Mon, 25 Mar 2013 09:05:25 -0700

What Does a Duty of "Honest and Fair Dealing and Good Faith" Mean?

Those words should ring a bell for CA real estate licensees. They’re copied verbatim from the Disclosure Regarding Real Estate Agency Relationships that buyers, sellers and agents must sign prior to entering into a listing or purchase contract.

"Honest, Fair Dealing and Good Faith" are some of the legally required responsibilities a CA agent has to the principal they're NOT representing. Those duties are a lower standard of care than the “fiduciary” duties we have to our clients. The buyer's agent is responsible to the seller for being Honest, Dealing Fairly and acting in Good Faith”; and the listing agent has those responsibilities, and others, to the buyers. At least in CA.

Isn't writing and presenting multiple offers for a buyer who intends to purchase only one property without disclosing the buyer's intentions to the seller, bad faith and dishonest? To me it is. And it therefore violates CA Agency Law. Perhaps other states define agents' duties differently.

I'll go one step farther. The abbreviated definition of "fraud" (from TheFreeDictionary) is:

"A false representation of a matter of fact...even by concealment of what should have been disclosed...and is intended to deceive another so that the individual will act upon it to her or his legal injury."

I'm not an attorney, but I understand English and that definition encompasses the practice I'm writing about--writing and presenting multiple offers for a buyer who intends to purchase only one without disclosing that fact to the seller. The "legal injury" is the damage to the seller who cannot accept any other offers, even more favorable offers, while the purchase contract that the buyer intends to cancel is still in effect.

Finally, there’s the issue of teaching buyers it’s okay for real estate agents to conceal the truth to get their offer accepted. The end justifies the means if the buyer gets the benefit of getting the deal they want. And we wonder why our industry has a sleazy reputation.

A statement written into the purchase contract, something like the following, solves the problem: "The buyer is making multiple offers but intends to purchase only one property." That's honest and fair dealing as required by CA Agency Law.

No seller will accept that? Maybe; but that's why its omission constitutes a violation of CA Agency Law and is probably a fraud.

Lloyd Binen

Broker/Realtor/DRE 00572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

Silicon Valley's (Dangerous?) Real Estate Market Trend

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 20 Mar 2013 14:55:51 -0700

Silicon Valley's (Dangerous?) Real Estate Market Trend

Fact #1

A listing I had in Old Mountain View CA closed escrow last Thursday. We got eight offers, all of them over list price. That's not unusual in Mountain View or in many other cities in Silicon Valley or throughout the country. What was unusual was none of the eight offers contained a single contingency. There were no inspection contingencies, no financing contingencies and no appraisal contingencies in any of the offers. I've never seen or heard of that since 1976 when I began selling real estate.

I should mention that pre-listing inspections (termite, general property and sometimes roof) are the norm in Silicon Valley. And buyers have at least 20% cash down payments and often much more. The offer we accepted on my Old Mountain View listing was 70% cash down payment.

Fact #2

A near-800-FICO score, cash-rich young buyer I'm representing hasn't been able to get his offer accepted in the neighboring and more affordable Silicon Valley cities of Sunnyvale and Santa Clara. We've made 8-9 offers (I hate to count) that would be considered excellent offers under normal market conditions. His offers have been well above asking price and contingent only on obtaining financing in 7 days. But one of the competing offers has been accepted. Recently there have been no fewer than 15 competing offers on each house we've placed offers on. While many listings agents don't disclose the price or terms of the accepted offer, several told me that the accepted offer had no contingencies.

Fact #3

So I did some MLS research. It turns out that 18 of the 23 homes sold in Mountain View, CA in Feb. 2103 had NO contingencies in the accepted offer. The MLS status changed from "Active" directly to "Pending, No Show" which indicates there were no contingencies. The usual progression from "Active" to "Pending, Show" was skipped; it was leapfrogged. "Pending, Show" is the normal MLS status while the buyer's loan and due diligence contingencies are in effect. In other words, there were no contingencies in 78% of accepted offers.

Additional MLS research showed that for homes listed in the top three quartiles in neighboring Silicon Valley cities of Sunnyvale and Santa Clara, CA about half of the homes sold in February 2013 contained no contingencies. Yikes.

Conclusion

I don't know the conclusion. I'm interested in comments. Thus far I haven't heard about deposit disputes or other problems from non-contingent transactions not closing. I think we're going to see more totally non-contingent offers because there are no signs the market is cooling. In fact, it has been steadily intensifying for more than a year. March through May is traditionally the peak of Silicon Valley listing season, but thus far supply is not coming close to meeting demand.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Certified Residential Specialist (CRS); Graduate, Realtors Institute (GRI)

408-373-4411; e-mail

How's the Silicon Valley Real Estate Market?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 06 Mar 2013 22:09:48 -0800

How's the Silicon Valley Real Estate Market?

Statistics and graphs don't quite capture the essence of today's Silicon Valley real estate market.

Here's the e-mail message I received from the Listing Agent this evening in response to my offer.

"Hi Lloyd, Thank you for your offer on 448 Judy Ave. We received a total of 20 offers and have decided to do a multiple counter. Unfortunately, your offer did not fall into the group that we countered. I wish you all the best in finding a home for your clients. Many thanks for all your efforts."

My client's offer was $20,000 over list price, "As Is" (drywood termites included at no extra cost), 31% cash down payment, pre-approved buyer with no inspection contingency, no appraisal contingency and a 7-day loan contingency. Proof of funds included with the offer showing more than $370,000 cash.

The property is a single family residence in Sunnyvale,CA, not even the hottest area in Silicon Valley. It was offer #7 for my client, a young Google computer scientist, PhD from University of CA trying to purchase his first home.

Listing Agents, including me when I'm the Listing Agent, ask for and receive all inspections, reports, disclosures and advisories signed by the buyer with the offer. That was 178 pages (I just totaled the four pdf packets of inspections, disclosures etc.), excluding the purchase contract. I joked with the buyer a few offers ago that he'd get "mouse finger" like "tennis elbow" from all the clicking for his digital signatures on the documents requested with the offer. That joke is getting old.

That's how the Silicon Valley real estate market is.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtors Institute (GRI)

408-373-4411; e-mail

Who's on First? Misunderstandings are Easy to Have.

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Fri, 01 Mar 2013 16:50:55 -0800

Who's on First? Misunderstandings are Easy to Have.

When a simple request can have two opposite meanings, it's easy to understand how confusion abounds.

A few days prior to a recent closing the Selling Agent told me: "You can keep the extra ceramic tile in the garage." She even followed-up the phone call with that e-mail message so I wouldn't forget. Very thorough.

I relayed the message to the seller--the buyer wants you to keep the extra ceramic tile in the garage. Although we had not explicitly discussed the tile, I think that was the seller's intention anyway. It made sense; the extra ceramic tiles could be used as spares in case any tile on the master bathroom floor cracked. It's impossible to find perfectly matching ceramic tile.

Yesterday, a few days after closing, I got another call from the buyer's agent. She repeated her request: "Lloyd, I told you to 'keep the remaining tiles in the garage'."

I told her the seller did keep the tiles in the garage, just as she had requested. I told her I saw them in the garage when I picked up my lockbox the day we recorded.

A little annoyed with me, she repeated "well I told you to keep the remaining tiles".

"OOOOh, I see. You want the seller to keep them in his possession? To take them out of the garage".

To which the agent said: "That's right. That's what I said, isn't it? The buyer doesn't want them. The seller can keep them. The buyer is going to remodel the master bathroom. Please tell the seller he can keep the tile in the garage".

"Now I get it. I'll pick them up and deliver them to the seller's house. But wait, I no longer have a key for access."

Misunderstandings are easy.

Lloyd Binen

Broker/Realtor/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-mail

Wordless Wednesday; Pot-Loving Saratoga, CA Realtor Scores Big

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 27 Feb 2013 10:50:32 -0800

Wordless Wednesday; Pot-Loving Saratoga, CA Realtor Scores Big.

And you can too. RL Liquidators in Santa Clara has many more of the large-sized ceramic pots previously used at Westfield Mall (Valley Fair). As Is and Where Is. RL Liquidators is at 1075 Martin Ave. Santa Clara, CA 95050; 408-641-8248. Bring strong back, appliance dolly & truck.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Dr.

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institutie (GRI)

408-373-4411

When Will More Silicon Valley & Santa Clara County Homes be For Sale?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Fri, 15 Feb 2013 12:05:46 -0800

When Will More Silicon Valley & Santa Clara County Homes be Listed For Sale?

The shortage of Silicon Valley listings has caused many prospective home buyers to ask this question. Their efforts to purchase a home have been thwarted by low inventory and competing home buyers. It's not unusual for prospective buyers to have made over-list-price offers on several homes, and still get beat by the competition. In January 2013, 64% of Single Family Residences in Santa Clara County sold for full Asking Price, or more. The average Sale Price was 2.2% above the average List Price; and one-half the homes sold in 12 days, or less. Lots of well-qualified prospective buyers are hoping more Silicon Valley and Santa Clara County homes get listed For Sale.

The best prediction about when more homes may be listed For Sale can be gleaned by analyzing past trends.

The Bar Graph shows the 2004-2012 Average Number of Homes listed For Sale in each month in Santa Clara County.

The Line Graph shows the Percentage of Change in the Number of New Listings compared to the preceding month.

If the trend in 2013 is "typical", buyers can expect a 26% increase in the number of New Listings in March compared to February. However, after March there will be no significant increase in New Listings. Furthermore, after May, the number of New Listings declines steadily until the following January.

This is probably not what prospective Silicon Valley home buyers were hoping. And maybe 2013 will not follow the typical pattern. But the information above shows the past pattern when homes are listed For Sale in Santa Clara County and Silicon Valley. All data are from the MLSListings, Inc., the local Multiple Listing Service.

Lloyd Binen

Broker/Realtor/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-maill

Should I Make an Offer with No Contingencies?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Thu, 14 Feb 2013 12:38:56 -0800

Should I Make an Offer with No Contingencies?

Multiple offers are the norm in Silicon Valley's listing-deprived real estate market. Ten to twelve offers are about average for listings priced right according to last year's comparable sales.

To get an offer accepted in this competitive environment we're seeing offers with no contingencies. That's right...no financing contingency, no appraisal contingency and no inspection contingency. Nada, nada, nada.

A prospective buyer needs to fully understand the risks associated with a non-contingent offer. Most real estate attorneys advise against non-contingent offers due to these risks. Nonetheless, they're common in today's Silicon Valley real estate market as competing buyers try to make their offer the most acceptable one to the seller.

There are at least three risks:

Forfeiture of the buyer's Earnest Money Deposit, customarily 3% of the offered price, if the transaction doesn't close. For example, if the buyer can't get their financing for any reason, they'll probably lose their deposit;
Buying a home with a significant but undiscovered defect that otherwise would have been found by professional inspections during a buyer's "due diligence" period; and
Having a costly and messy legal entanglement due to disagreements about either #1 or #2.

A Silicon Valley real estate buyer can minimize these risks. The buyer should get an iron-clad loan approval from a reputable lender's underwriter.

The buyer must have a large enough down payment, or access to more cash, so an appraised value that's less than the purchase price doesn't result in a loan amount that's too small to complete the purchase. Remember, the lender bases their loan amount on the appraised value, or the purchase price, whichever is less. Non-contingent buyers in Silicon Valley often have at least a 35% cash down payment, or extra liquid assets, or an equity line of credit secured by a different property.

The buyer needs to remember that, while rare, there is property that's un-financeable irrespective of the buyer's credit worthiness. Usually because of severe structural defects, such as no foundation or "tear down" condition. This risk can be mitigated if the buyer has access to hard money loans and 50% cash down payment.

Most Silicon Valley listings have pre-listing inspections completed. The buyers and their agent should read and understand the findings. They should estimate the costs to remedy problems, if any, and to factor those additional costs into their offered price. If the seller has not obtained pre-listing inspections, then the "average", unsophisticated buyer should pay for a thorough inspection prior to tendering their offer. Yes, it's money lost if their offer isn't accepted. But it's insurance against a possibly larger lose from buying a property with a severe defect that would have been discovered with a thorough professional inspection.

Should you make an offer to purchase a home in Silicon Valley with no Contingencies? A non-contingent offer has risks. A buyer needs the advice of an experienced Realtor to minimize those risks. How experienced? My opinion: before a buyer puts their 3% Earnest Money Deposit at risk making a non-contingent offer, their agent should be able to show the buyer proof from the MLS that they've closed at least 100 local transactions. Each closed transaction has taught the agent at least one lesson that benefits the clients and reduces their risk.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtors Institute (GRI)

408-373-4411; e-mail

Wordless Wednesday; Cactus Garden Staging w/ Grown Children's Old Toys

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 13 Feb 2013 12:24:08 -0800

Wordless Wednesday; Cactus Garden Staging w/ Grown Children's Old Toys.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-mail

WW High Density Housing for the Birds at Villa Montalvo, Saratoga CA

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 06 Feb 2013 09:46:45 -0800

Wordless Wednesday; High Density Housing so for the Birds at Villa Montalvo, Saratoga CA

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; or e-mail

Maverick's Invitational Surf Competition is Happening Sunday 1/20/13

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Sat, 19 Jan 2013 11:55:25 -0800

Maverick's Invitational Surf Competition is Happening Sunday 1/20/13

Twenty-four of the world's best big wave surfers will compete at the sometimes annual Maverick's Invitational Surfing competition. "Sometimes" because the competition depends on whether or not contest organizers forecast huge waves.

Storms originating around the Aleutian Islands off the coast of Alaska coupled with the unusual contours on the ocean floor produce gigantic waves at Maverick's Beach near Pillar Point in Half Moon Bay; 25 miles South the San Francisco and 37 miles Northwest of Saratoga, CA.

This year, Mavericks Invitational Contest Director Jeff Clark said “The waves are going to be insane, the weather is going to be beautiful, and the level of surfing will break new ground.” Contest organizers expect 25'-40' swells based on meteorologic satellite data, plus motion and depth readings from Pacific buoys.

That's why the event is an "invitational". Only expert big wave surfers are invited. Tragically, expert surfers have been killed surfing at Mavericks.

The Invitational is scheduled to take place anytime between November and March. That's when Pacific storms are most likely to generate huge CA coastal waves. Organizers announce the specific date for the Invitational competition when they forecast huge waves. Contestant surfers from around the world must show up within 48-hours of the "Surf's Up" announcement to participate.

The event may be watched lived here Sunday 7:30 AM Pacific Standard Time. Surf competition begins at 8:00 AM PST.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-mail

Wordless Wednesday; Kaleido Lamps in Downtown Campbell, CA 95008

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 09 Jan 2013 15:10:50 -0800

Wordless Wednesday; Kaleido Lamps in Downtown Campbell, CA 95008

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

408-373-4411

"SURPRISE! I'm From the CA Department of Real Estate for a BOS Visit"

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Wed, 02 Jan 2013 14:03:56 -0800

"SURPRISE! I'm From the CA Department of Real Estate for a BOS Visit"

California Brokers' anxiety was just cranked up a notch. The State Regulatory Agency, the Department of Real Estate (DRE), has announced the start of a new program. Beginning in 2013 the CA DRE will conduct unscheduled and unannounced Broker Office Surveys (BOS). That's right...unscheduled and unannounced.

According to the attorney for my Errors and Omission insurance company the DRE may audit records from different transactions or ask to see random transaction files as part of the BOS.

The CA DRE has always conducted random audits, but they were scheduled in advance so the broker had a few days lead time to get files and records organized. But, not any more.

My feelings? It's probably long overdue. Since DRE is tasked with regulating the industry and protecting the public, I think a BOS makes sense. I have been subjected to a random DRE audit in the past, and it went fine. But audits tend to increase a broker's vigilance about legal and regulatory compliance and that probably benefits the consumers of our services.

In my market, buyer-real estate broker-mortgage broker complicity in lender fraud was rampant during the subprime lending days. Unannounced office visits to examine files may have uncovered the lender fraud and reduced its impact on the market.

Lloyd Binen

Broker/Realtor/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtors Institute (GRI)

408-373-4411; e-mail

Limiting Mortgage Interest Deductions is Better Than the Alternative

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Fri, 14 Dec 2012 14:04:47 -0800

Limiting Mortgage Interest Deductions is Better Than the Alternative.

I think all Realtors receive nearly daily "Call To Action" e-mails from either the National Association of Realtors (NAR), their State or Local Associations of Realtors. I do.

By simply clicking a link in the e-mail we can send a letter or an e-mail to our elected representatives in D.C. expressing our opposition to limiting or eliminating the Mortgage Interest Deduction (MID). The e-mail to our representatives explains that limiting the MID will hurt the housing market by reducing home values, impeding the nascent housing recovery and making home ownership less affordable. Maybe that's true, but I'm not on board NAR's, CAR's or my local Board's lobbying campaign.

Why? Because I think the alternative is worse. A tsunami of debt is heading our way that can destroy not only the real estate market, but also the entire economy. Am I a dooms dayer? Consider a few these facts:

Raising taxes on the so-called "rich" raises enough annual revenue to pay for 9-days of spending;
Our national debt, over $16 Trillion (more than $130,000 per household), is financed by historically low, short-term interest rates. When those rates increase our debt service will explode;
The known $16 Trillion debt is swamped by off balance sheet $86 Trillion in actual federal government unfunded liabilities including Social Security, Medicare and future federal employees' retirement benefits. This according to Christopher Cox (former SEC Commissioner) and Bill Archer (former chairman of the House Ways and Means Committee.)

NAR and every other interest group have valid reasons for opposing limits on the benefits it receives from the current system. But when every group opposes changing the benefits it derives, nothing changes. Status Quo. That will spell disaster.

It's not enough for NAR to oppose limits on the MID. Opposition it is too easy. The magnitude of the problem compels any responsible group to do more than object. NAR needs to suggest solutions to the debt and deficit malignancy, and not simply oppose proposals.

Until that happens, I won't be on board the daily "Call to Action" e-mails I receive.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Service

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtors Institute (GRI)

408-373-4411; e-mail

A 1031 Tax-Deferred Exchange For Silicon Valley Investors?

Lloyd Binen Silicon Valley R since 1976;408-565-8177 (Certified Realty Services) — Mon, 10 Dec 2012 12:46:04 -0800

A 1031 Tax-Deferred Exchange For Silicon Valley Investors?

Tax-Deferred Exchanges have been popular in Silicon Valley since the late 1970s. Although they fell from favor during the housing bust from 2007 to 2011, the revival of the local real estate market has brought exchanges back to life.

Internal Revenue Code section 1031 allows owners of real estate investments to defer the tax on their capital gain by rolling their proceeds into a "like kind" of property. To defer all taxes on capital gains the investor must: (1) not take control of the sale proceeds; (2) acquire larger debt; and (3) acquire a property or properties of greater value than the property that's relinquished. Other conditions apply.

Investors who have owned Silicon Valley rental properties for a dozen years, or more, have highly appreciated properties even accounting for the housing bust of 2007-2011.

Force of habit has some of them thinking a 1031 Tax-Deferred exchange is still smart. Think again.

Capital Gains rates will most likely increase from their current 15% rate. Why defer the taxes when the rate is 15%, only to be taxed in the future at a higher rate? It might be wiser to bite the tax bullet now by closing the sale this year, and then re-investing the after-tax sale proceeds. Yes it hurts, but it'll probably hurt more with higher rates in the future.

To my thinking it doesn't makes sense to roll gains over into another investment property only to eventually pay a higher rate when that property is eventually sold.

But as a Realtor, and not a tax expert, I'm not qualified to advise. My advice: consult with a tax expert before you close the sale.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-mail

Silicon Valley Real Estate & Miscellany

Disappearing Affordability in San Jose, CA.

Disappearing Affordability in San Jose, CA.

What is the natural consequence of rising home prices? It's diminishing affordability, and that's what is currently happening in the Silicon Valley and San Jose, CA. And, it's happening quickly as the graph below shows. San Jose, CA is one of the most affordable cities in and around Silicon Valley

That's where our market is headed. And that's a typical market for this area. Eventually only well-priced listings in good condition will sell, and buyers will have a good selection of homes from which to choose.

How soon will that happen? Beats me; I'm a Realtor not a forecaster. But I don't think it'll happen this year.

Never a dull moment.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

408-373-4411; e-mail

Listings and Sales of Small Apartment Buildings in Silicon Valley

Listings and Sales of Small Apartment Buildings in Silicon Valley

In 2013, 35 small apartments have been listed on the MLS in these Silicon Valley cities. That's 60% fewer than the 10-year average of 88. Thirty-two have sold. A real estate market doesn't get much tighter than that.

I may even resort to Craigslist with an "Apartment Wanted" ad. It may be interpreted as a listing solicitation, but it isn't.

Any other ideas to find a small Silicon Valley apartment building to purchase are appreciated.

Wordless Wednesday; Sometimes Things That Don't Smell Fishy, Are Fishy

Is the Federal Reserve Blowing a New Silicon Valley* Housing Bubble?

Is the Federal Reserve Blowing a New Silicon Valley* Bubble?

As the nearby graph shows the Median Sales Price of Silicon Valley homes has increased rapidly. Homes in subdivisions that I think of as, say, $900,000 are listed for $1,100,000, or more, and are selling immediately with multiple offers.

I'm having a deja vu. The jump in prices and my feeling of bewilderment reminds me of the feeling I had during the 2002-2006 bubble. Could this be another bubble?

Here's some of Edward Pinto's opinion about the national real estate market:

He thinks the increase in home prices is not due to improvements in the underlying economy. Rather, it's due to artificially low interest rates resulting from the Fed's quantitative easing; that is, their continued purchase of mortgage-backed and Treasury securities.

If home prices are increasing in your market, is it due to improvements in the underlying economy, or because of artificially low interest rates?

Lloyd Binen

Realtor/Broker/DRE 00572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070-4046

Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)

408-373-4411; e-mail

FDIC is Filing Claims Against Real Estate Agents and Appraisers

FDIC is Filing Claims Against Real Estate Agents and Appraisers

That's the attention-grabbing subject of an e-mail I received last week from the California Real Estate Legal Alliance. They're the attorneys affiliated with my E. & O. Insurance Company; it's the E. & O. company endorsed by the California Association of Realtors. The e-mail says:

In Santa Clara County most buyers were satisfied with zero down payments and non-recurring closing costs (NRCC) paid by the seller. They usually didn't ask for cash back. No down with NRCC paid by seller was available legitimately, without defrauding the lender.

The temptation to make easy money fraudulently may have been resisted if potential fraudsters thought they may be caught and jailed.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate, Realtor's Institute (GRI)

408-373-4411; e-mail

When a Rent-Back Agreement is Needed, Incorporate it into the Purchase

When a Rent-Back Agreement is Needed, Incorporate it into the Purchase Contract.

It's not unusual for an owner to need to remain in their home for awhile after closing the sale of their personal residence. Most State Associations of Realtors provide a standard, fill-in-the-blank, "Seller in Possession" or "Rent-Back" form to formalize that agreement.

At least until closing when questions about the Rent-Back details arose.

What happens if the seller doesn't move out on time?

What happens if there is damage to the house after closing caused by the seller or seller's movers?

Is there a security deposit, how much, and who holds and controls its disbursement? (Some escrow companies in Santa Clara County stopped handling security deposits because disbursement disputes were so common.)

What happens to the rent if the seller needs fewer days than the Rent-Back agreement grants?

What happens to the duration of the tenancy if an abolute rental termination date is specified, but escrow closing is delayed?

And, of course, can the buyer store some stuff in the garage while the seller is renting back?

Fortunately these and other questions are answered in a completed standard Rent-Back Agreements. The forms force the terms of the Rent-Back to be discussed and to be mutally agreed upon. That avoids messy disagreements at closing.

So I was surprised when I got a multiple counter offer yesterday which, among other terms, stated: "Seller reserves the right to Rent-Back for up to 45 days after close of escrow." That counter offer prompted this post.

Why risk a possible dispute at closing? Doesn't it makes more sense to incorporate the terms of the Rent-Back agreement into the purchase contract? That's when everyone is motivated to solve problems in a mutually acceptable manner.

Lloyd Binen

Realtor/Broker/DRE 572654

Certified Realty Services

19200 Shubert Drive

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtor's Institute (GRI)

408-373-4411; e-mail

How Would You Respond to This E-Mail?

How Would You Respond to This E-Mail?

I received the following e-mail message from a person I don't know. It's probably a shotgun broadcast to every agent in this area, although I'm not positive. How would you respond?

"Dear Lloyd,

If there is a chance we can make a fair margin, we are interested to hear from you. When we buy houses, we make quick decision, buy AS-IS, pay cash, close in a few days.

For more information on how to represent us to buy more houses, please visit our website at: www.RevestorsLLC.com

Look forward to hearing from you and taking a look at any deals you have."

Regards,

Jake Zhang – Acquisitions

www.REVestorsLLC.com

408-230-6566

info@REVestorsLLC.com

I did respond telling the sender that I was not interested and asking for his permission to re-print the e-mail in this blog post, which he granted.

How would you respond to this e-mail if you received it?

____________________________________________________________________________________________________

**Is the Federal Reserve Blowing a New Silicon Valley* Bubble?**

**I'm having a deja vu. The jump in prices and my feeling of bewilderment reminds me of the feeling I had during the 2002-2006 bubble.** Could this be another bubble?