Buying a house in Silicon Valley during the pandemic.
A distant dream became a reality thanks to six months of perseverance, patience, and the help of my incredible team.
It was a Saturday morning in September. I walked into my kitchen to find a steady stream of water leaking from the popcorn ceiling. The new air conditioner that my landlord had installed a month prior was leaking yet again. The HVAC installers had been out to my rental the day before and assured me that they had fixed the source of the leak.
It was their fourth visit to fix the leak.
And that was my breaking point and the moment when I decided I’m going to buy a house.
In Silicon Valley.
In the middle of a pandemic.
Of course, this wasn’t the first time that I’d thought about buying a house. I’ve wanted to buy a house ever since I finished grad school and moved to the Bay Area nearly fifteen years ago. But I live in one of the most expensive and competitive real estate markets in the country. Saving for a downpayment was no easy task. I’d look at homes on Redfin and Zillow and be disappointed with what my budget could buy me in the Bay Area. So I continued to save and the idea of owning a home continued to be a distant dream.
I probably could have bought a home a few years ago but I felt very uncertain about buying a home in the US while Trump was in office. I wasn’t born in this country and I’m Arab and Muslim. I don’t really have another country (that’s a story for another time) so I needed to keep my options open in case I had to seek asylum in Canada. I may not be able to afford a house in the Bay Area but I could buy one in Vancouver.
September was only a couple of months away from the election. Trump bungled the pandemic response and signs were pointing that Biden could win the election. A return to competent people running the country meant that the economy would eventually stabilize and I still had a place in my country. A country that I loved and believed in. A country that had given me so much: an education, endless opportunities, and the American dream.
Given the uncertainty last fall surrounding the pandemic and the election, it seemed like this might be my best shot at buying a house in the Bay Area. I knew interest rates were historically low. I was also hoping that the uncertainty of the period and the idea that you can work remotely from anywhere would make the market less competitive (spoiler alert — it did not). Overall, my search took about six months. I looked at fifty (yes, fifty) houses and made five offers. Over the next few sections, I’ll delve deeper into the process of buying a home in Silicon Valley in the middle of the pandemic.
After my breaking point with the leaky air conditioner, I spent some time doing some research — figuring out my budget, learning what my budget could buy me and where, researching lenders, and finding a real estate agent. I completed some online applications and made phone calls to several lenders. At first it seemed like I wouldn’t be able to get a loan. The first few lenders I spoke with weren’t processing jumbo loans (unless you have a lot of cash you’re going to have to take out a jumbo loan or a couple of loans if you want to buy a house in Silicon Valley) due to all the uncertainty of the pandemic. These first few days of researching lenders were very frustrating and disappointing. Most of the people I spoke with were nice and respectful about the whole thing. They explained that there was too much uncertainty in the market. But one loan officer at Bank of America (the bank that’s had my business for years) was so mean and nasty that I vowed to take my business elsewhere (I still plan on doing so once things slow down a bit with the new home ownership tasks). My interaction with this loan officer in particular was very disheartening. It felt like the rules were changing yet again and my dream of buying a home was getting further and further away.
I kept trying other lenders and eventually had more luck. Ally (where I plan to eventually move my banking) and Citi were willing to lend me money (more than I thought I could afford … and Citi was even willing to write a loan with only 10% or 15% down without PMI). I asked for recommendations from other Googlers and one Googler recommended working with Cheryl Mehe’ula at Foley Mortgage. After one phone call, I knew Cheryl was the right fit for me. We talked about my budget and she thought it was wise given my finances. We also talked about the market as a whole — there was still a bit of volatility in the mortgage market and the Bay Area was still very much a sellers’ market. Nonetheless, Cheryl was encouraging and explained the entire process throughly.
The first step was to get pre-approved — this meant gathering all sorts of documents to verify my entire financial situation. Getting pre-approved would make me more competitive as a buyer (it’s a more thorough look at your finances than a pre-qualification). This process is pretty time consuming and tedious. It’s not hard — it’s just not glamourous. And there’s a lot of back and forth (getting updated documents, getting different documents to verify different transactions, etc).
While getting pre-approved, I also started looking at real estate agents. Several people recommended Redfin. Their approach seemed data focused and customer centered so I decided to give them a shot. After completing an online form, I was immediately assigned an agent and met with him over Zoom the very next day. Right away, there were some red flags. His LinkedIn profile showed very very little real estate experience. During our initial call, he never once asked about what I was looking for in a home. When talking about making offers, he said something about how he just fills out the boilerplate forms. I think he intended this to be comforting — like you’re the customer and you’re in charge. But my takeaway was that I couldn’t rely on him for strategy! But everybody has to start somewhere and I figured I’d give him a chance. He toured several homes with me one weekend and was nice enough. But yet again I saw more red flags about his lack of experience. We were looking at homes in Willow Glen and I seemed to know more about the neighborhood than he did. I had lived in Willow Glen for about a year about eight years ago but I am no San Jose expert.
My fears were realized a few days later. I had fallen in love with the first house I had seen (more on that later). But the sellers had already accepted another offer. Since that offer had contingencies, we could still make an offer on the house. If you see a house on Redfin that says “contingent” it means this exact situation — the seller has accepted an offer that has contingencies so they could still show the house to other buyers and take backup offers. Since the house had been on the market for about a month (an eternity in the Bay Area) and they had already accepted an offer, I didn’t see a need to rush in with a backup offer. I told my agent something like, “I want to keep my cards close to my vest.”
He relayed that exact comment to the seller’s agent.
Now I don’t know much about real estate (actually I know nothing about real estate) but it seems like the whole point of having a strategy is to not reveal your strategy to whoever you’re negotiating with. I mentioned this incident to my sister — mostly as a gut check since she’s a bit older than me and has had a very successful career in software sales. Now if you know anything about my sister or anything about Middle Eastern families (everybody is all up in everybody’s business), you will not be surprised by what happened next. She reached out to her contacts at Redfin and next thing I knew I was getting an apologetic email from my agent’s manager and I had been assigned to a new agent. I don’t know what my sister had told Redfin but they pulled out the big guns by assigning me to Alisha Pruitt. Not only is Alisha an experienced and savvy agent, she’s also a Bay Area native who knows the South Bay like nobody else I know. That house you’re touring on a random street in San Jose? Not only can Alisha tell you exactly all the pros and cons of that neighborhood, she’s also probably got a friend or cousin who lives down the street so she’s got first hand knowledge of the freeway noise, the schools, or any other random thing you might ask her about the area.
Oh all the houses you’ll see.
Between Cheryl and Alisha, I was now in really really good hands. After getting officially pre-approved for a loan, the search for my home started in earnest. My pattern every week was pretty consistent. I had Redfin notifications turned on so anytime a house came on the market that was in my price point and in my target neighborhoods, I’d learn about it right away. I’d also casually check the Redfin app and website everyday in case I missed a notification. When a house seemed like it could be a good fit, I’d favorite it. It seemed like more houses went on the market later in the week (I’m guessing to better align with people’s weekend plans). Given the pandemic, nobody was really doing open houses anymore. I’d seen notices for socially distanced open houses (that seemed too risky) and virtual open houses (that didn’t seem thorough enough) but those seemed more like an exception. Once I had a few houses that I wanted to see, I’d schedule to see them on the weekend. Unless there’s something really really wrong with a house, most homes in the South Bay don’t stay on the market for very long (it seems like they accept an offer within a week). So if you see something you like, you have to act quickly to see it as soon as possible! Because of the pandemic, sellers would hold appointments for each buyer to see the house. You have to wear a mask and sign a COVID disclosure. Only two people and the buyer’s agent could be in the house at the same time. I actually prefer this model to the traditional open house. You get 30 minutes to see each home, which is more than enough time to see a 1300–1500 square foot home. And since you’re only there with your agent, you can both be fully transparent about your feelings about the house. And you don’t have to feel this pressure of other buyers being there. I’m actually curious to see if the real estate industry will adopt this model after the pandemic. I suppose it is a better experience for the buyer but a lot more work for the agents (on both sides) and sellers.
I saw about fifty homes in my six month search and Alisha was there for most of them. Redfin has associate agents who would sometimes show me homes when Alisha wasn’t available. Given how many homes I saw, I was impressed with how many Alisha saw with me! In the beginning, I saw a lot of homes that in retrospect I probably didn’t need to see in person. At that point, I think I was optimistic that maybe the house would show better in person. Or maybe in person I could overlook something that seems disagreeable online. Or maybe the freeway noise from the freeway behind the house won’t seem so bad. As I saw more houses and learned more about different neighborhoods, I became more selective. So instead of seeing five houses each weekend, I’d see two or none at all. I also quickly learned that if I loved a house and wanted to make an offer on it, I really should go see it a second time. Due to the pandemic and the appointment scheduling process, it can be a bit of a pain to see a house a second time (because at this point you’ll probably have to see it during the week) but it is worth it. It’s funny how your mind seems to overlook things that first time when you’re seeing a home and taking it all in.
A lot of the houses I saw weren’t really memorable but there were a few that stood out, that captured my attention, and that for a brief moment I was in love with and obsessed about:
The house on Tulip.
It was literally the very first house I saw (and the one that my first agent relayed my strategy to the sellers verbatim). And for a very long time, the house on Tulip was the house that I measured all other houses. It only had one bathroom but it was nicely renovated, had my dream kitchen, and a huge backyard. It was also in a cute neighborhood called Cory that I had never heard of and it seems like nobody I know has heard of either (it is in north San Jose on the border with Santa Clara, close to Valley Fair and Santa Row). I felt a very special connection to Tulip because tulips were my dad’s favorite flowers. It seemed like it was meant to be but it wasn’t. By the time I saw it, the sellers had already accepted an offer. The sellers’ agent seemed convinced that the buyer was going to pull out so we put in a backup offer. The buyers came through and I didn’t get the house on Tulip. But I learned all about contingencies, how to make an offer, and got Alisha as my agent out of the whole debacle so it was worth it!
The house with the pool.
A month or two later I fell in love with a Spanish home close to downtown San Jose that had an amazing pool. It was in a cute pocket neighborhood but the surrounding area was a bit industrial. It also needed a ton of structural work. The termite work alone was close to $10,000 (every house in California has termites but most other termite reports I saw were about $4,000-$5,000). Alisha could see why I loved the house but she wanted to make sure that I knew what I was getting myself into. We decided to make an offer a little bit over asking but with an appraisal contingency. The sellers didn’t want any contingencies so I lost that house to buyers who were willing to waive all contingencies. Their offer was only $5,000 more than mine. Every time I lost a bid, I had a lot of feelings depending on the situation. With this one, I was mostly infuriated because I had wasted so much time reading disclosures and calculating all the costs to fix up a house that ended up not being mine. But I had a lot of questions about the neighborhood so deep down I was a bit relieved.
A few weeks later, another house goes on the market that’s on Tulip — literally diagonal to the original house on Tulip. What are the odds? Alas, while it was a very nice roomy home, it didn’t really have much of a backyard and it needed a new roof. I decided to not make an offer.
The trust fund house.
Around Thanksgiving, inventory of new homes went way down (which makes sense, most people wouldn’t want to move during the holidays). But around that time, an adorable home in Willow Glen came on the market. The primary bedroom had a window seat! The kitchen was extensively remodeled and has a GIANT island. I loved so many things about that home that I asked to see the disclosures before I even toured it. [By the way, this was something that I started doing at some point in my search. If I saw a home I really liked online, I asked Alisha to see the disclosures preemptively. It was a good way to know the problems the home has so I could watch for them during the tour.] I was casually looking at the title report when I noticed that the homeowners borrowed a million dollars to purchase the home from their parents’ trust fund. For someone like me without a trust fund, it was astonishing. I couldn’t imagine just being given a million dollars from your parents. I decided that there wasn’t going to be any love letter that I could write about what buying a home means to me that would connect with people younger than me who were literally handed a million dollars. And I really didn’t want to contribute to rich people getting richer.
The house with the easements.
The trust fund house was the last house I saw in 2020. As 2021 rolled around and inventory started to slowly pick up, a home came on the market in early January that I again totally fell in love with (are you seeing a pattern here?). It was completely remodeled, huge, and was on a large lot in a nice neighborhood in Campbell near the Pruneyard. The aesthetics of the home were my style so it would have been a move-in ready home. I toured the home with Alisha and we both loved it. But she warned me that it would be very competitive so if I really wanted the house, I’d have to offer well over asking and waive all contingencies. When we were touring the backyard, I had noticed that trees were planted in odd locations and that two neighboring two-story homes towered over the backyard. But I figured you could always plant trees to add privacy. I reviewed the disclosures and the home seemed like it was in pretty good shape. Since I am so new to real estate and was still learning to read disclosures and inspection reports, I had been forwarding the disclosures to a friend who had a lot of experience in real estate. He replied back right away stating that he wouldn’t put an offer on a home with such restrictive easements. I didn’t know what he was talking about — what the heck is an easement? It turned out that three sides of the home’s property had light and air easements. Those trees planted in odd locations? They were probably there because of the easements. In case you’re wondering, the home sold within a week and for well over asking price. I hope the new owner knows about the easements.
The Eichler with the power lines.
Sigh, I absolutely loved this home. It was an Eichler in the Fairglen neighborhood of Willow Glen. I absolutely love Eichlers but they’re rare to come by. Of the fifty homes I saw, only three were Eichlers. This Eichler had a rare courtyard in the front (not an atrium but an actual fenced in front yard). And of the three Eichlers I saw, it was in the best shape. Sure, the kitchen cabinets were IKEA and the kitchen and bathroom remodels were a bit shoddy but it was an Eichler! And I even have some friends who live right around the corner. But the backyard was tiny and had a set of very low (and very thick) power lines. Aside from the eyesore, there’s some debate about the EMF produced by power lines and cancer. The original owner had passed away in the home a couple of years, which I didn’t mind (we would all be so privileged to pass away in our own homes). But when I looked her up online, she had passed away from cancer. I decided to not put an offer on the house. I grieved for that house for weeks.
The first few weeks of January were pretty quiet in terms of house hunting. Inventory is still low as people recover from the holidays and start the new year. Alisha had mentioned that inventory spikes after Superbowl weekend … and she was right! In that lull before the Superbowl, a beautiful early 1900s craftsman home in Naglee Park came on the market. It had so much original character and charm. I asked for the disclosures before touring the home. Included in the disclosures was a structural report (not standard) provided by a civil engineer. In the report, he describes all of the issues with the home’s foundation (there were plenty) and included a survey of the floor levels. The home wasn’t even and the difference between different points in the floor are beyond acceptable ranges. For one of the issues described with the foundation, the civil engineer notes that there wasn’t a really good solution for the problem other than rebuilding the whole foundation. But he did conclude that the home’s foundation was in serviceable condition. I was disappointed to see this report. There was a lot of uncertainty about the foundation repairs and costs associated with tackling that problem (for some of the larger ticket items, the civil engineer recommended a wait and see approach). I still decided to go see the home given that I could wait about five years before needing to address the foundation. The home was beautiful but as soon as you step on the front porch you notice a pretty significant slant. The living room floors were at such a noticeable angle that I felt like I was in a funhouse. But the home was in such a great neighborhood and it had so much character. Maybe I wouldn’t notice the slanting floors after a while? Maybe it isn’t such a big deal after all. Towards the end of the tour, I noticed that one of the doors had been propped open with a brick. I removed the brick only to find that the door swings wildly and does not close at all (due to the leveling issues with the floors and foundation). I knew I couldn’t overlook that and decided to pass on the home. I had dodged a bullet. I had told myself, “If someone buys this home, then this market is really out of control.” It went off the market a few days later and closed at $100,000 over asking (a home with uneven floors and a foundation that likely needs to be replaced).
The house across the street.
Soon after the Superbowl, there was a flurry of activity and lots of great homes went on the market. A beautiful craftsman home in Palm Haven was up for sale. I had no idea what Palm Haven was at that point but Alisha was very excited. Palm Haven is a great pocket neighborhood in North Willow Glen that’s characterized by 100 foot palm trees. The homes in the neighborhood were all charming and very well maintained. Between the palm trees and the ornate street signs, it felt like being in 1930s Hollywood. I was in love. The home itself was really really nice. It had the original built-in cabinets in the style of the arts and crafts movement. The owner was a UX designer so the home was immaculately furnished and decorated with a mid-century modern flair.
The backyard featured a modern shed that would have made a great office. As I was touring the home, I came upon a pomelo tree in the backyard and I could literally hear my dad say in Arabic, “Bumilu!” My dad was an avid gardener and loved fruits with pomelo being one of his favorites.
That was it — this was the house! I had a UX connection with the owner … I literally could hear my dad from the heavens … the palm trees represented everything I had dreamed about before moving to California … and there were even thick date palms that reminded me of the ones I grew up with in Kuwait. There couldn’t have been any more signs about how perfect this house was for me. Despite all the interest in the home and Alisha warning me that it was going to be very competitive, I put an offer in. My offer didn’t have any contingencies, offered a 60 day rent-back as the sellers had requested, and was well well over asking. I literally put an offer at the most that I could afford — a number that was scary but doable. They received 23 offers and mine was nowhere near the top. The home sold for over $450K over asking.
The house without a garage.
I was still mourning the house across the street when a couple of days after my offer was not accepted another craftsman home in Santa Clara went on the market. It was cute — it had been remodeled (though not everything was to my taste), had a huge backyard (again, not exactly to my taste), and a very nice kitchen. But it was a little tight and it didn’t have a garage. The neighborhood was OK — there were some really nice houses and some not so great houses. I decided to go for it and again put another great offer — went over asking, 30 day rent-back as requested by the sellers, and no contingencies. After the first round of offers, I learned that there were 10 offers and my offer was the highest (by a hair). The seller’s agent told us that some of the interested buyers would be upping their bids. I decided not to — I was already making an offer well over asking (I didn’t go as high as I had for the house across the street). I didn’t think the home was worth anymore than what I had offered. At some point, I’d need to build a garage and I knew that would get expensive. I lost that house by $15K and to an 80% cash offer. I was disappointed but not heartbroken. Hindsight 20/20 — I think this home was my rebound after the pain of losing the house across the street.
While writing an offer for the house without a garage, Cheryl (my mortgage broker — remember her?) emailed me to tell me that she had been having dinner with a friend who had told her that her boyfriend was selling his home. It was also in Palm Haven. It wasn’t on the market yet so I looked it up and it was perpendicular to the house across the street (hence why I now refer to that house as the house across the street). I favorited it in Redfin so I’d know as soon as it went on the market. When it came on the market, I took a look at it. It was only a 2/1 and while the interior looked very nice, the exterior was very, very pink. And something about it reminded me of a taqueria.
Other than the neighborhood, I wasn’t that excited about it. It was pink! Very pink! And I didn’t know how I’d feel about seeing the house across the street everyday, taunting me that it liked another buyer more than me. I decided to tour it mostly as a courtesy to Cheryl. She’s been working with me for six months — the least I could do is see her friend’s boyfriend’s house.
When I got to the house, it still looked very very pink. But the view from the front yard and from the front windows of the house couldn’t be beat. The house is literally in front of a row of 100 foot palm trees. Not in my wildest dreams would I have imagined that I’d have a house with a view like that.
The house across the street doesn’t have views of the palm trees.
Upon closer inspection, I learned that the house itself is actually not pink but it looks pink in the Redfin/MLS photos. Alisha pointed out that I could easily paint the very pink (salmon?) concrete. As soon as we walked in, the house just felt good — it has a good vibe! It has a really nice fireplace in the living room and the living room, kitchen nook, kitchen, and dining room all flow together. The kitchen was remodeled in 2019 and Alisha pointed out the high quality craftsmanship and finishes. The seller clearly cared about this home and spent a lot of money renovating it.
The bathroom wasn’t really my style. In keeping with the taqueria theme, the bathroom looked like one you’d see in a Middle Eastern restaurant (I’m pretty sure it matches the bathroom at Dishdash). The yard needs a little work but it’s a good size (I think I’ll have room for a pool in a few years).
Alisha sent me the disclosures and connected with the seller’s agent to get a feel for competing offers. The disclosures looked really good. The house needed a new water heater and some termite work (but it was in the typical $4000-$5000 range).
We saw the home a second time the very next day. It still had a great vibe when I first walked in. I don’t know what it is but I just felt at ease. Because I’m risk averse, I used this tour to try to find everything that is wrong with the house or that I didn’t like about it. Alisha listened patiently to my nitpicking. None of the things I found fault with the home were dealbreakers — they could all be changed or fixed in time. But you couldn’t change the neighborhood or that view. I decided to make a preemptive offer that night. And after a counteroffer the next day, my offer was accepted!
It takes a village
The next few weeks were a flurry of joy, excitement, anticipation, and anxiety. Will the house appraise? It did. Will I get a loan? I did. Will we close on time? We did!
But none of this would have been possible without my amazing team:
- Alisha Pruitt: If you’re looking for a home in San Jose, I can’t imagine a better real estate agent than Alisha. She’s very strategic, knows San Jose inside and out, and is super savvy. She made the whole experience a lot of fun and was a good cheerleader when my offers didn’t pan out. I wouldn’t have gotten the home I got had she not suggested we make a preemptive offer and had she not built rapport with the seller’s agent.
- Cheryl Mehe’ula: Cheryl held my hand throughout the whole financing process. She explained everything, answered all my questions, and was extremely supportive. Even though my budget is small by Bay Area standards, Cheryl always made me feel like a valued client. She always had time to answer emails, respond to texts, and have long phone calls. She also managed to get me a really good interest rate. Like Alisha, Cheryl is a Bay Area native so she too had first hand knowledge of different neighborhoods. Heck, she’s the one who gave me insider scoop that the house was going on the market before it went on the market!
- Family and friends: I didn’t tell a lot of people that I was looking for a house. In the midst of all the suffering during the pandemic, it felt odd to be so blessed (and it still does). But there were a few people who looked at houses online with me, read disclosures, listened to my concerns and anxious excitement, and supported me. Thank you!
A few takeaways
I learned a lot from this process. If you’re embarking on buying a home in the Bay Area, here is my advice to you:
- You don’t need a trust fund to buy a house in the Bay Area. There’s a lot of wealth and privilege in the Bay Area. It may seem like everyone’s got trust funds and limitless IPOs. That’s not my situation. And if it’s not your situation, know that it is possible — it will just take time, planning, and budgeting. I read The Millionaire Next Door last summer and found it very helpful and inspiring.
- You’re not going to get everything you want. Unless you’ve got endless cash, you’re not going to get everything on your list. I wanted a 3/2 in a fantastic neighborhood with room to build a pool. I got a 2/1 in a fantastic neighborhood with room to build a small pool. I’m happy with that tradeoff but not everyone would be. Write down everything you want in a house and then prioritize those things. And then when you’re looking at houses, think about what you can change and what you can’t change. I knew I couldn’t change the neighborhood of my house but I could potentially expand it.
- Write a love letter. In my UX research writing, I wrote about how critical writing is to a UXR career. Well, here’s another life situation where good writing may help your cause. With every offer we wrote, I included a love letter. I followed a general template but I always customized the letter to the home. I wrote specifically about what I loved about the home, what it would enable me to do, and how I connected with it. For instance, I wrote about how the date palms in Palm Haven reminded me of the ones that I had grown up with in Kuwait. If a house gets 23 offers and your offer is in the middle of the pack, I don’t think the love letter will help your cause. But if you made a strong preemptive offer and the seller is touched by your letter, he’s going to feel really good about selling you the house he’s made his home for 20+ years.
- You’re going to get emotional. When you’re looking at houses, people always tell you to not get emotional and not get attached. That’s bullshit! Unless you’re buying an investment property, you absolutely are going to get attached and you’ll feel let down when it doesn’t work out. It sucks but it is part of the process. You just have to prepare yourself to be let down and take the time you need to mourn what didn’t work out.
- There’s always a better house. Even in a very competitive market like Silicon Valley where there are far more qualified buyers than homes on the market, there will always be a better house. I looked at a lot of great houses and made offers on a lot of great houses. But hindsight being 20/20, I’m grateful I ended up with the house that I bought. It’s perfect for me. And I’m glad some of the other ones didn’t work out.
- It is not the hardest thing you’ve ever done. A friend and colleague asked me if buying a house in the Bay Area was the hardest thing I’ve ever done. It isn’t. Getting a job at Google and getting promoted at Google are some of the hardest things I’ve ever done. But buying a house in Silicon Valley isn’t hard … but it’s not easy or quick. It requires time, patience, and persistence. And a great team.
Thanks for reading and good luck!
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