San Mateo CA Real Estate And Homes

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Settlement Contingency Protects You But Makes Your Purchase Offer More Acceptable

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Many homeowners are held back from purchasing a new home because they want or need to sell their current home. Many potential buyers have heard about home sale contingencies, but fewer have heard the phrase “Settlement Contingency”. By putting yourself in the shoes of a home seller, you know most sellers are less likely to accept your purchase offer if you have a contingency that lets you first try to sell your existing home. A settlement contingency can give you the time needed to close the sale of your current home but cause less concern to the seller of a home you wish to buy.

A settlement contingency can prevent you from feeling you are forced to accept the risks of a no contingency offer. This contingency is useful if you have already put your home up for sale, and both received and accepted a purchase offer. A settlement contingency allows you to have a valid purchase agreement for your new home up until the specified scheduled settlement date for your current home. If you can not close escrow by the specified date, your purchase agreement can be terminated and your earnest deposit returned to you. Again, putting yourself in the shoes of a seller, it is easy to imagine that knowing you already have an accepted sale for your home and a specified date for it to close escrow, the risk your purchase offer failing because of your own home sale, has much less uncertainty and risk. Furthermore, the seller has a pretty good estimate of when he will receive his money from the sale of his home. The seller may judge the risk to him of your settlement contingency to be quite acceptable.

House Price Up But Price Per Sq.Ft. Down

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The San Mateo City average house price rose in line with previous quarters, but the San Mateo City median house price spiked up. The details of San Mateo real estate show that in the third quarter, the average size of houses sold was up 10%.

Average size of San Mateo houses sold
Average and Median price of San Mateo houses sold

Examination of other San Mateo County cities revealed that eight other cities (Foster City, Los Altos Hills, Menlo Park, Millbrae, Pacifica, Portola Valley, San Carlos, & Woodside) also had a significant house size increase as of the Aug 18 close of escrow data. Examining more of Silicon Valley revealed that Palo Alto was the only city in Santa Clara County to have a similar increase in the size of houses sold. With no other significant changes seen in the trends of those cities, it is hard to assign a cause. Perhaps the continuing problems reported for the city of San Francisco have changed the long-term plans of the residents of nearby cities. People less motivated by jobs (near retirement) or children (off to college) to stay put might be deciding their long-term future is elsewhere.

Drought Tolerant Landscape

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The “Lawn Be Gone” rebate offers up to $4 per sq. ft. of lawn which is replaced by drought-tolerant plants from the BAWSCA Approved Plant List. The list includes more than 2500 plants

There are several related rebate programs for San Mateo County which might significantly reduce the cost of putting in a drought-tolerant landscape. See “Drought Tolerant Landscape – Water Conservation – Rebates“.

Zestimate – Zillow Lost $304,000,000

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In 2018 Zillow announced “Zillow Offers” which gave home sellers an opportunity to sell their home directly to Zillow without listing their home for sale on an MLS. With the Covid-19 pandemic leading to restrictions on holding open houses it would seem that 2021 would be a great opportunity for the program. Zillow would use its Zestimate to begin the offer price and use an in-person visit to adjust for the cost of needed repairs.

Zillow’s Nov 2, 2021 earnings report and discussions indicate 2021 was not a great opportunity. The company posted a $304 million inventory write down in its third quarter and said that the total write down would be more than $540 million. Zillow will shut down its Zillow Offers division, leading to a 25% reduction in employees.

One of the eye-opening statements made in the company’s shareholder letter written by CEO, Rich Barton, and chief financial officer, Allen Parker, was “Our aim was to become a market maker, not a market risk taker.” The Zestimate apparently did not give them adequate short term future prices.

Does “market maker” bring up comparisons to the Hunt brothers effort in 1979 to become a market maker for silver which drove up the price of silver from $6 per ounce in early 1979 to $50 per ounce in January 1980?

Read more at Zillow Zestimate.