Happy first time home buyers in the Santa Cruz Mountains

It all began when I answered an incoming call, even though I didn’t recognize the phone number.     A genteel and intelligent young man began asking me some great questions about purchasing a home in the Santa Cruz mountains.    We agreed to meet soon after…

I was competing with the number one real estate team for these first time buyers’ business.    After many more thoughtful questions and answers, they chose to work with me.     These first time buyers had my complete attention: their trust, happiness, referrals, and eventually their repeat business means everything to me.     The way I look at it, my clients are number one, not me!

And so, the search was on for their perfect home.     Armed with their wants and needs, I set out to tour possible properties.  We toured the leading possibilities together and I refined my understanding of their ideals.

On brokers’ tour one week, I came across two great candidates.   I video taped a candid walk-through.    I went to this extra effort because they are very busy people who are relocating from another area. These videos helped to convey the property setting, which was the main objective: they wanted a property that felt like a retreat from their hectic  work and lifestyle.

The next phase was the offering process.    This was more challenging, because there were about half a dozen offers.     We talked about other properties, their strategy, and the fit of the property for them.    They made informed decisions and won the bidding!

I’ll zoom past the many, many details of the escrow, which was only three weeks long: the sellers’ choice.    Closing day was yesterday, and I’m delighted to say – they’re happy campers.


Top Ten Home Buyer Tips

Top 10 Buyer Tips

Did you know that, nationwide, about 1/3 of home purchasers are first time home buyers?         Since even experienced buyers sometimes make costly mistakes, I thought a top 10 list would be valuable for you.   Some tips may seem obvious, yet, each of these lessons are from the school of hard knocks.


  1. Myth: you need 20% for a down payment

🏡 With mortgage interest rates still near historical lows, waiting to save a 20% down payment might not make good financial sense.   Rents in some areas are so high, it may cost more to rent than to own.  Rent payments vanish, leaving you nothing to show but cancelled checks, while a mortgage payment may help you build equity for your future.

🏡 There are several zero to low down payment loans (just 3-3.5% down).

🏡 Find out from a lender if a Home Ready, USDA, FHA or VA loan might work for you.

🏡 First time home buyers may use gift money from family, apply for grants, borrow from certain retirement accounts, or benefit from employer assistance programs.


  1. Invest your time in getting pre-approved   Give your lender all of the documentation to get pre-approved before you start shopping for a home.

🏡 Save time: a pre-qualification letter may not be taken seriously by sellers.   Sellers prefer to work with a buyer who has put in the effort to get pre-approved.

🏡 Save heart ache: falling in love with a home it turns out you really can’t afford.

🏡 Save stress: you’ll be prepared to focus on the property itself when making an offer, not scrambling to submit loan paperwork too.

🏡 Save money: you may qualify for a lower interest rate after cleaning up credit issues you may not even know about.


  1. Location Although features of a home can be changed or repaired, location is set in stone.   Yes, neighborhoods may gentrify over time (mine sure has!),   school districts can improve, etc., but in general these are factors outside of your control.

🏡 Consider buying a cosmetically challenged house in the best neighborhood you can afford.

Welcome Bear🏡 Cast a wider net: you may find a new community where you can buy more home for your money.   That’s how I ended up living in Boulder Creek in the idyllic San Lorenzo Valley!    More and more companies allow telecommuting, now that we have  video conferencing and better on-line work collaboration tools.

🏡 Visit your potential new neighborhood at different times and on different days.   Talk to the neighbors, visit the stores and places you’re likely to go.   Chat people up!   Ask about the weather, schools, services.   Ask people why they like living there.   Listen to your intuition.


  1. Myth: buyers get a better deal by working with the listing (sellers’) agent   Reality: the sales commission  was already negotiated between the sellers and their agent before the buyer came into the picture.   While “dual agency” -representing both sides-is legal in California, I feel any merits are debatable.   This is a sensitive topic for some agents, since a “dual agent” makes more money.  It can get challenging for an agent to stay completely neutral to both parties so negotiations remain “arms’ length.”

🏡 There’s no extra fee to hire a dedicated buyers’ agent 98% of the time.

🏡 A dedicated buyers’ agent will let you know about all properties that may work for you, not just try to sell their own listings.

🏡 Buyers’ agents owe you their loyalty, and, during difficult negotiations, they will advocate on your behalf.


  1. Hidden Gems “Something must be wrong with that home. It’s been on the market for months!”   Stale listings, tenant occupied, and ugly ducklings may offer hidden potential.   Don’t be afraid to consider old listings!   You just might find your hidden gem.

🏡 Sometimes, the seller just missed the right price in the beginning.

West Park exterior.JPG🏡 Tenant occupied homes can be tough to show, and may be messy or dirty.    If that’s all that’s wrong, you may have uncovered a diamond in the rough that’s easy to polish!

🏡 When photos are dark or unappealing, fewer agents and buyers visit the property.   But, it might be a winner.  These often turn out to be some of my favorite hidden treasures.

🏡 Being clever or handy, having vision, or being able to afford some repairs down the road may allow you to open more doors than a buyer who’s only chasing pretty new move-in-ready home listings.


  1. Know the market Understand the nuances of the different neighborhoods, and recent price trends, particularly differences between asking versus selling prices.

🏡 There was a time when a seller would be lucky to get even one offer (2009, 2010).   Fast forward to 2018, now it’s the opposite – a buyer would be lucky to be the only offer.   Right now, buyers won’t get anywhere by low-balling a property when it first comes on the market.

In a hot market, like many parts of the San Francisco and Monterey Bay Areas right now, consider shopping for homes that are listed at prices 10-15% less than what you can afford, so you have negotiating room if necessary.


  1. Write a Winning Offer   In many parts of the country, there are more buyers than sellers.    Yet, even in these competitive markets, there are still ways to write an offer that will stand out for the sellers.

🏡  Do not rely on real estate website values!    Computer algorithms calculate property values based on unrefined mega data – no one at that website has been inside the house nor seen any of the homes around it.     An experienced local agent can guide you about an offering price that considers this refined market intelligence, as well as the current direction offers are moving in your market.

🏡 Consider letting the sellers know why you want heart stone path.jpgto buy their property.    In a crowded field of anonymous-feeling offers, a personal touch like a letter may help.


🏡 What is the likely psychology of competing buyers?     Understanding strategies likely being used by other buyers may give you an edge.

🏡 Figure out what you have to offer the seller that may be unique.   What is important to this particular seller?   What might make your offer rise to the top of the stack?   Usually it’s price, but, not always…there are many terms to consider when crafting a great offer.


  1. Contingencies Contingencies are protections that are built into the purchase agreement, giving buyers time to investigate and get their loan.   Recently around the Silicon Valley, we’ve seen buyers waiving their contingencies – their protections – just to win the bidding when there are multiple offers.   It’s understandable to be frustrated after losing a few houses, but is it wise to waive your protections?

🏡 Be sure you really understand the pros and cons before you sign an offer waiving contingencies.


  1. Inspections The seller may provide existing inspections; that’s good information.   septic lid under stairsStill, consider getting your own, and plan to be there to talk with the inspector.       This is your big chance to learn about your property’s condition before you buy it.   People who go on vacation or stay at work during their inspections are less likely to truly understand the property’s condition.

🏡 A buyer (not mine!) relied on the sellers’ report; the inspector said he couldn’t see behind all the occupants’ belongings.   Even though the buyer was susceptible to molds, for whatever reason she didn’t get a mold inspection.   Turned out there was mold on the walls behind the furnishings in multiple rooms.   Cost to repair was in the tens of thousands of dollars.

🏡 Invest the time and effort to get contractor bids for repairs suggested in the inspections, so you have a grasp on the likely costs.

🏡 A buyer (mine) didn’t think any inspections were needed because the home was newly built.   I encouraged investing the time and money, since many contractors use sub-contractors who may have missed completions or may have even done things incorrectly.   The inspectors found quite a bit wrong – in fact the summary of problems was several pages, dozens of items.     The buyer was able to require the seller/contractor to fix all the issues before closing escrow and moving in.


  1. Don’t make big changes! Don’t change jobs, quit your job, invest in a new business, open a new credit account, or make any large purchases!

🏡 If you plan ahead, a lender can often assist you through the process of getting a home loan, even when you are relocating for a new job.

🏡 Even if you are expecting a nice big down payment for your home purchase from selling a property, your lender needs to see a stable income source to qualify for a loan, so don’t quit your job just because you’re moving anyway.

🏡New credit cards or last minute financial changes can delay your property purchase, cost you extra fees, and add unnecessary stress to your move.

Did you find these tips helpful, but have more questions?   Just text or call MC at

(831) 419-9759, or,Minolta DSC mcdwyer@century21.com

I’d love to help you buy your home – because

Your home is your castle; I’ll treat you like royalty!

Click here to look at homes for sale or sign up for your own custom home alert.


San Lorenzo Valley Real Estate Prices – 2012 in review

San Lorenzo Valley Home Prices and Sales – 2012

The real estate market in the San Lorenzo Valley turned in a solid performance for 2012, with an average home sales price of $338,238, up 5% on average for the year.

SLV Home Prices

The key factor affecting home sales right now is a lack of inventory – the number of homes for sale is at an eight year low!    Yet, there are many buyers, including cash investors and first time buyers who want to lock in great interest rates.     The imbalance of supply and demand leads to competition, and that supports increasing prices.

A new home listing, priced properly and marketed well by your agent, is likely to get multiple offers, even over asking price.    There just aren’t enough homes on the market to match buyer demand.  Another measure of demand: Days on the market (before the house goes into escrow) is about 2-3 months, putting us solidly within what’s known as a sellers’ market.

SLV housing inventory 2012 by month

If you are contemplating putting your house on the market, there’s pent up demand right now!    Look at the typical upward swing in inventory during the summer months in the chart– is there really a reason to wait to list your property?    To find out what your San Lorenzo Valley home is worth now, click here

The Santa Cruz Mountains and San Lorenzo Valley are influenced by the hectic Silicon Valley and greater Bay Area markets which experienced rapid appreciation in the range of 20% during 2012.

Felton fields and clouds, photographed by John Urwin
Felton fields and clouds, photographed by John Urwin

With gas prices a bit lower lately, more working people are willing to make the 30-45 minute commute from the San Lorenzo Valley.   They feel it’s a great trade-off because they can come home to more affordable homes and a more relaxed lifestyle, with less crowding and more open spaces.  For the average price of $340k, buyers got a 3 bedroom, 1200 square foot home on lots averaging 1/4 acre or more!

Santa Cruz Mountains: Location, Location, Location!

Earlier this week I took the day off to enjoy a walk along Pleasure Point, dropping

Pleasure Point Egret
Pleasure Point Egret

occasionally down to the beach to look at the tide pools, then back up to street level where people were skateboarding and walking their dogs, enjoying the sunshine.   During dinner on the wharf in Santa Cruz, we watched the pelicans diving for fish, against the amazing backdrop of sunset and ocean.   Returning back home to the San Lorenzo Valley in the evening took less than half an hour, and I again felt so blessed to be living in such a diverse and gorgeous place.

Mortgage rates for a 30 year fixed loan continue to average well below 4%, allowing people to secure their future housing costs.   First time buyers are a big portion of the market, because renting costs just about the same as owning.   Investor buyers are a big factor as well, often defeating first time buyers in competition, because they are putting down a lot of cash – often buying homes with no loan at all.   Understanding the challenges involved in getting a loan, many sellers will choose a cash buyer if they have the option.   Buyers making a down payment of 3.5% or less may find themselves loosing in competition to buyers with a larger down payment, if the seller can choose amongst multiple offers.

2012 –year in review

299 homes sold in the San Lorenzo Valley – from Boulder Creek to the town of Felton (according to the Multiple Listing Service, areas 34-37).    The volume of sales is up about 16% this year compared to last, and the average sales price is up about 5% to $338,238.     (vs. $321,555 average price on 256 sales in 2011.)

In 2012, 46 homes sold for over $500,000, almost double the number in 2011, when just 26 homes had sold for over $500,000.

At the high end of the spectrum, two homes this year sold for $875,000 – one in a good Boulder Creek neighborhood and one in Felton – both were on acreage.

At the bottom end of the spectrum, 8 homes sold this year for less than $100,000 – all had serious deficiencies and would not qualify for a loan.

Distressed sales were still a big factor in the 2012 housing market in the Santa Cruz Mountains, particularly dominating the lower price range.  75 short sales and 76 foreclosures (REOs) caused about  50% of sales to be distressed properties.   It’s possible that there will be more short sales and fewer foreclosure sales in 2013.   This is in part because lenders have learned that unoccupied homes fall apart – loosing value quickly-  so they are seeing short sales as more advantageous.   For buyers, short sales are taking less time to get approved, so the risk is less than before.


Oh, Rats!

Oh, Rats!

This is not a blog for the squeamish!

We REALTOR®s are specialists in solving problems to ensure a smooth transaction and a happy ending for our buyers and sellers.     We have to think on our feet, and go the extra mile, at a moment’s notice.

Case in point:   Last Friday was close of escrow for one of my buyers.   Well, really, the loan was supposed to fund on Wednesday, but naturally there were issues holding it up.   Investigation revealed the seller’s proxy at FNMA hadn’t yet signed off on their title and there was a last minute bit about the HUD1.   But then everything got back on track.     The furniture was scheduled to arrive, the pressure was on.

This being a foreclosure, the previous seller had made off with various things like the woodstove, the toilet seat and most of the light fixtures.    We did the final walk through amidst all of this, after work as the sun was disappearing beyond the hills.   The buyers’ son found trouble with his flashlight and squealed in horror.    His parents were also, reasonably, upset.

Apparently, during the home or pest inspection, the trap door to the underneath of the house had been left open.   Two fairly decent sized rats had made the unfortunate discovery that water in a toilet bowl is not a safe place to drink.

I didn’t think much of it at the time.

But it didn’t sit well with the buyers, and within a day there was a pretty upset e-mail addressed to everyone about how horrible this situation was for them and wanting to know exactly how this problem was going to be fixed.

The listing agents are from over the hill as we like to say – city agents an hour away – a good team with a lot of foreclosed listings but not a lot of time.    Naturally, title, escrow, and lenders don’t handle this kind of problem.      So, it fell on me to make my clients happy.    First thing Friday morning, I was there armed with the equipment to remove the poor creatures, leave a strong yet green cleanser in the bowl, turn on the fans and open the windows, 3 hours prior to the buyers’ arrival with the moving truck.

Click here if you’d like an agent to do whatever it takes to negotiate your dream home near Santa Cruz


CNN Money reports – Buying a Home may Never get any Cheaper

Buying a home won’t get much cheaper

By Les Christie @CNNMoney May 3, 2012: 11:48 AM EST

Several housing experts are predicting that this year will be the last chance for homebuyers to cash in on the weak housing market.

NEW YORK (CNNMoney) — Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services (PNC,Fortune 500), said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012. Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013.

Foreclosures start to fade. One major factor that will drive the trend is the cooling of the foreclosure crisis. Stan Humphries, chief economist for Zillow, said that the percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.”

That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processing of hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement.

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties, according to Alex Villacorte, the director of analytics for Clear Capital, which specializes in housing market valuations.

“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said.

In some markets hit hard by foreclosures, the turnaround in prices is already underway. Phoenix recorded an 8.4% jump in home prices during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

“It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”

Miami saw a 4.6% increase quarter-over-quarter through April, andTampa, Fla., was up 4.4%, according to Clear Capital.

Goodbye 3.8% mortgage. In addition to home prices, mortgages could also move higher.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low.

But rates aren’t expected to remain at these record-low levels much longer. As the economy continues to recover, rates will move higher, said Doug Lebda, CEO of LendingTree, the online lending site. Although, he said, they will “stay very reasonable.”

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

Greater demand for loans will help fuel the increase, according to Lebda.

Even though mortgage rates have been cheap, borrowing for home purchases has been sluggish. The Mortgage Bankers Association estimates that homebuyers will take out mortgage loans totaling about $415 billion this year, an increase of less than 3% compared with 2011. Next year, however, it forecasts that amount will almost double to $706 billion.

As housing markets stabilize and prices stop falling, homebuyers will be even more confident about buying, said Humphries.

“People can now see the light at the end of the tunnel,” he said. “And that can be enough to get them off the fence.” To top of page