When the price is right ...

Well-valued properties are selling quickly along the Midpeninsula

If you price it right, they will come.

At least that's what Realtors are saying -- especially this year.

"We are working with one of the more efficient marketplaces in the country again," said Steve Bellumori, a Coldwell Banker agent in Menlo Park. "Buyers are readily there to purchase if the pricing is correct. If not, they tend to sit back and wait for the price adjustments to take place."

Bellumori's remarks are reflected in both the volume and pricing in recent home sales, especially in the Midpeninsula: The sheer number of home sales for the first half of the year was up 150 percent in Palo Alto, 138 percent in Mountain View, and 124 percent in Menlo Park, compared to two years ago.

In the first six months of 2011, median prices (where half the homes sold for more and half sold for less) in Menlo Park rose to $1.2 million (up 4 percent), in Palo Alto to $1.55 million (up 7 percent), and in Mountain View to $982,500 (up 8 percent).

Bellumori recently sold, along with listing agent Kate Engelbrecht of the Saratoga office, a home at 2121 Valparaiso Ave. in Menlo Park for $1.275 million. He was reticent at first to market the house before Labor Day, noting that it's historically a slow time for real estate sales. But earlier school start dates encouraged them to list it sooner.

The owners, Bob Prendergast and his wife, Linda, initially thought they should ask more than $1.3 million, given that nearby homes had gone for higher prices. "But that was maybe three years ago," he said.

As a contractor, he had worked with Engelbrecht for years. And, he said, the house was in like-new condition on the inside. They "priced it by today's market and today's trends rather than what my wife and I thought it was three to five years ago. They've got their fingers on the pulse," he said.

Once listed, phones rang off the hook with people asking about the home, which is located within the boundaries of the Las Lomitas School District -- ranked the highest performing K-8 district in the state last year, Bellumori pointed out.

After a week or so, they got a lot of interest, but only one firm offer -- at the asking price. They took it.

Typically, Realtors look at comparable sales before determining how to list a house for sale. But what sold down the block isn't the only factor to consider: Other points range from low inventory (not much choice out there) to property idiosyncrasies.

A home at 1835 Bay Laurel Drive in Menlo Park was more of a challenge because the house is sited on land leased from Stanford University.

"It was pretty difficult because it was difficult to get financing," Eda Diridon, an agent with RE/MAX Star Properties in Belmont, said, adding that many lenders will not make a loan for a property on leased land, especially when the lease is less than 40 years.

It eventually sold for $1.3 million in July.

"If not on leased land, it would probably have sold closer to $1.7 million," she added, even though it needed a new roof, plus updated wiring and plumbing.

Another issue can be condition of the house.

Before 1030 Deanna Drive in Sharon Heights went on the market, the family conferred with John S. Reese, a Realtor with Intero Real Estate Services in San Carlos, about how to best prepare the house. They'd lived there since 1975.

"They knew the paint, carpeting were dated," Reese said, so they updated the colors. The biggest change they made was calling in their son, Bob Blasing, who owns a local landscaping company, to put in a new backyard. The kitchen they left untouched.

"A young couple with two small children bought it. They were thrilled that they could go in and update (the house on) Deanna," Reese said, noting that they're putting in new windows and doors as well as remodeling the kitchen.

As for pricing, Reese noted that another house on Deanna, which had new granite in the kitchen and new bathrooms but was a little smaller, went for $1.7 million in nine days. He figured that sold for $721/square foot. Given that the 1030 Deanna owners didn't want to spend the cash -- or "go through the trauma" -- to tackle the kitchen and bathrooms, they listed the house at $1.395 million, or about $550/square foot.

After 21 days on the market, they received three offers. They got $1.37 million -- cash.

"They didn't take the highest offer," Reese said, but liked the comfort level of the cash offer.

Ellen Hecht grew up on David Avenue in the Palo Verde neighborhood of Palo Alto, in a home her parents purchased brand new in 1957. A few years later they bought the house next door as an investment and rented it out.

After her mother died in the late 1980s, her father, Martin Dreyfuss, remarried and moved to the East Bay, where Ellen and her brother live today. He continued to rent out the pair of David Avenue Mackay houses until his death this spring.

When it came to pricing the homes, Hecht relied on her Palo Alto Realtor, Paul Engel of Coldwell Banker, Palo Alto, to advise her on what to expect.

"We went back and forth if we should paint inside, outside, getting reports, cutting down overgrowth," Hecht said, adding that ultimately they decided to underprice to create an auction.

"We looked at the most likely buying segment. It looked like the segment would shrink (if priced over $1 million)," Engel said, pointing to the homes' conditions.

"One house was pretty rugged. There was mold on ceiling beams; the floors had been cut into. Once we took up the ugly old shag carpets we saw pock marks on the floors," he said, adding that in one house there wasn't even hardwood under the rugs as expected but plywood. Engel noted that Mackay houses were "pretty minimally built." When the original dishwasher broke, the owners had not replaced it.

Engel was pretty certain the house would be purchased by a builder with the intention to tear it down and start all over -- and that's exactly what happened.

Each house, 3103 and 3105 David Ave., was priced at $995,000. Both sit in a flood zone and are at the end of a cul-de-sac.

Open houses were held for two weekends. "It was mobbed," Engel said, noting that even with a second agent stationed in the second house, they couldn't even jot down everyone's names.

Each house drew more than 10 offers, with those at or below asking price quickly eliminated, Engel said. Many of the offers were all cash, or with 40 to 50 percent down. "It was not an anomaly that people had that much money to put down," he said.

The teardown, at 3103 David Ave., went for $1.135 million. It will soon be a spec home for sale.

A young couple purchased the house next door at 3105 David Ave., which was painted inside and out, for $1.158 million.

John and Araceli Zepezauer thought they could sell their Mountain View home by themselves. After all, they had successfully done a FSBO (for sale by owner) on their San Jose townhouse in 2007 in about two weeks.

Welcome to 2011.

The couple had recently torn down their 500-square-foot, self-described "shack" on Moorpark Way in the Sylvandale area and replaced it with a 2,700-square-foot custom-built home with a full basement. This was their dream home.

But circumstances change. "A lot of things happened: the economy, health problems, re-prioritizing life, that maybe life in the fast lane was not the most important thing anymore," John said, months after leaving a high-pressure, high-tech job.

"If we took the equity, downsized, invested the money, we could live a simpler life," he added, noting that he wanted to be able to spend more time with his wife and two boys.

Araceli describes real estate as sort of a hobby for her. When she first came from Mexico, she and her brothers bought up houses, fixed them up and sold them quickly. So when it came to pricing her dream house, she was quick to tour nearby areas.

"We had our appraisal from the bank. We kept an eye on the market. It was tough thing to do because this is a unique house in a unique neighborhood so there are no comparables. Because it was going to be our dream house, for ourselves, we weren't worried about overbuilding, about being the biggest house on the street," John said.

And they loved their neighborhood, where they'd lived for 15 years. Although some see the odd street -- with apartments, smaller houses and even a trailer park -- as ugly, and therefore unsafe, John noted that in Cupertino where he grew up, "you see big-little, big-little everywhere. It has good schools, is safe" and Moorpark Way is very similar. Araceli mentioned the teachers, engineers and dentist who live nearby.

To begin to sell it themselves, they used a flat-fee service that let them list on the Multiple Listing Service online for $500 and provided a bit of consulting. A Craigslist ad was linked to their website; they put an ad in a magazine; and they held open houses every weekend for a month.

The open houses drew four or five visitors per day -- but most of those were neighbors, John said.

"People are scared to buy a house of this amount (without a Realtor)," Araceli said.

"The market is different; the house is different," John acknowledged.

So they decided to go a more traditional route. After interviewing five people, they opted to list with Royce Cablayan, assistant sales director at Coldwell Banker, Los Altos.

His first advice: Lower the price. A "comparable" house had finally come on the market, and that encouraged the couple to set the new price at $1.65 million, with a fresh start in August.

By mid-September, John said, "More people are showing up than before (at open houses), and they really like the house." They've even fielded a couple of low-ball offers.

The couple has come to accept that "a house of this size will take longer to sell," John said, adding that people need to decide: "Do you want to have a pretty house or a pretty street? We're trying to find the people who want a pretty house. ...

"We're not in a must-sell situation. If we can't get a fair price, we stay here. That would not be a bad thing. We love the schools, the neighborhood. ... We want to be realistic, but we don't want to sell ourselves short," John said.

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