Why Such a Low Price for a Lovely San Jose Home?

Why Such a Low Price for a Lovely San Jose Home?

By Michelle Carr-Crowe, Silicon Valley real estate agent selling homes in San Jose

Have you ever seen a home for sale, such as the West San Jose Lynbrook High Home at 6312 Bollinger, San Jose, and wondered “Why Such a Low Price for a Lovely San Jose Home?”

Trulia reader Marcela asked this question, “Why Such a Low Price for a Beautiful San Jose Alum Rock Home?”

A buyer real estate agent like me needs all of the data, such as the address, home and lot size, to accurately answer the question.

However, many buyers of homes in San Jose, Calif. and surrounding cities in Silicon Valley, such as Saratoga, Cupertino and Palo Alto often have the same question: Why is a particular Santa Clara County home asking such a low price?

Sometimes a San Jose home is priced low as a strategy designed to ensure multiple offers and a bidding war.

Other times Silicon Valley homes are priced low to compensate for other off-putting factors buyers may hesitate to get involved with, such as the lengthy, seemingly-arbitrary short sale, probate or bank-owned process. In those situations, lenders and other institutions, such as the courts, make the rules and buyers must accept the terms or walk away.

Still other times, a San Jose home is listed at a low price to compensate buyers for issues such as a busy street, a mixed-use area (retail, apartments, some SFH), poor condition, or a stigma, such as an act of violence or death on the property.

In Marcel’s example of the Alum Rock home for sale in San Jose, Calif., zip code 95127, that area saw some of the deepest drops in value with the initial market shift. Over the past few years, it’s seen higher rates of foreclosures, short sales, and distressed properties, leading to a pattern of decreasing values, which has since stabilized.

However, many families love living in the San Jose Alum Rock area. Family members often want to live and work and stay close to each other. So when a couple gets married, they often buy nearby one of the parents’ homes. Or when it’s time to buy an investment rental, the buyer chooses a home in the neighborhood she already knows and feels comfortable in. Should it be time to downsize, an elderly client chooses to buy nearby family to facilitate continued visits and support.

I recently sold a short sale home in San Jose’s Alum Rock area. We priced it low (to ensure multiple offers, which we received) and the majority of buyers had family living nearby. Out of 9 offers, 5 parties lived within 2-3 blocks of that exact home. They made above-price offers even though it had four negatives: it was a short sale with deferred maintenance—and the home was located on a busy street (White Road), right across the street from James Lick High School.

In the case of 6312 Bollinger, San Jose, a Lynbrook High Home asking only $799,800 in an area where the average sale price is ~$950,000, the answer is busy street. However, that's a $150,000 discount - nearly 20 percent off the average West San Jose Lynbrook homes sold.

When you’re curious about why a Silicon Valley home is asking what seems to be a low price in San Jose, Cupertino, Saratoga or other Santa Clara County cities, Just Call 408-252-8900. I'm happy to research a particular home's situation for you so you can choose the right home for your family to buy.