weird. Why has the garage been showcased as a living room?
Here are the photos in zillow.
https://www.zillow.com/homedetails/6630-Ivy-Ln-San-Jose-CA-95129/19642622_zpid/
ADDED LATER
Answering my own question. The garage is showcased as a potential rental .
Well, that’s interesting. Maybe the very high sales price of $2.56M, seemingly in excess of $2k/ sq ft, was because the garage is converted into a 2nd unit.
Maybe proves my point that an ADU adds considerably to property value, even if it is a garage conversion
The garage conversion is not a legal ADU. Btw, the conversion will probably cost almost nothing(relative to the price of the house).
True, the garage conversion is not a legal ADU. And to be fair, nowhere in the listing does the seller claim that the property has an ADU. Guess they just staged the garage in a suggestive way.
There are so few listings in prime Silicon Valley or RBA with legal ADUs, so it’s hard to estimate the value an ADU would add to these starter houses (sub 1500 sq ft ranch-style main house)
You a fool to be sucked in by an illegal ADU. Look at appraisal. Garage has more value than an illegal unit
Well, I am not the fool who bought this house. But whoever bought this 1188 sq ft house for $2.56M - more than $2000 per sq ft - sure seems like one. I don’t know if they overpaid because the garage has been converted or something else.
By the way, I agree with you that a garage has more value than an illegally converted ADU. I think an ADU can add significant value - but only if it is newly added square footage, built with permits, and not converting any existing structure like a garage.
how much value does a 7700 sq feet lot have?
Big lot must be valuable in that area of West SJ with Cup schools. Surely, that accounts in some measure for the $2.56M sale price, but I still think it’s excessive for a 1188 sq ft house
Actually, it seems to me that buyer paid 2.5 Million for ADU and the 60K for other considerations like lot size, improvement, school, neighbourhood, shopping, access to freeways etc.
Now you are talking 
I was just trying to deconstruct how would you value the property if you were to purchase it. Probably other offer a buyer like you might make is to offer 3 Million for the ADU, and then demand a credit of 440k for purchasing the rest of it. And if seller could some how separate the ADU, you might be willing to pay 3.5 Million just for the ADU. I am just trying to understand your enthusiasm for ADUs.
It is just a curiosity about the new and unknown. Very few houses with legal ADUs get sold, so makes for an interesting speculative exercise on how much value it may add.
ADUs are a Trojan horse to steal your property rights
That I actually agree with. It’s a bad idea to even rent it out to anyone, known or unknown, if the homeowner is also living on the property themselves. The rental income is not worth the risk of having a hostile tenant whom you cannot get rid of due to rent control laws.
ADUs are only good if they are for personal use of the homeowner and their family or guests.
The Bay Area party continues
I break the silence, because of high lighted words, even though I do not like to come back.
Here, seller listed the home very low list price at $1.8M when no homes are selling below 2.2M. This would have created 40+ offers and buyer has to exceed all of those offers !
Decide who is the fool here: My friend bought similar house 1348 sqft with lot 7600 (he did not know the value of lot at that time) 800k (RE Peak cycle 2006/7) for 1.2M, two years before spent $400k to remodel the home to 2700 sqft single story, now values $3.5M !
Another friend bought 1034 sqft/10k lot (RE Peak cycle 2006) for 1.03M Cupertino schools, spent 400k range to expand to 2500 sqft single story (just completed), now values 3M+.
Recently, I sold my rental for 1.6M (elsewhere San Jose) 1374 sqft 8200 lot, received 8 builders’ offers without listing that home, two full cash offers and one with above expected price. The buyer tear-down the home (as we speak) and making 3500 sqft home which will go 3.5M+. I did not have sufficient cash/energy/time to build such home to reap such profit.
I can quote plenty of such real stories. RE is about Location, location and Location, and buy bigger land at good Location.
The buyer is intelligent, not a fool - for Lynbrook/Monta Vista location !
I guess you are right. The buyer is no fool - probably an ambitious young Silicon Valley Apple-Google (or some such employers) dual income couple, loaded up with valuable tech stock they could easily exchange for this house which is located in the very best Cupertino school boundaries.
With a big lot, They can easily add 1200-1500 sq ft of high quality living space for $500k, and convert it into a $4M house.
Easy, but immature, for me to mock them as fools. Guess I am fool here…
We have a new candidate for crazy high sales price for a small ranch home.
Ok, ok, again the buyer is probably not a fool. The lot is large - 8000 sq ft, neighborhood is prime Mtn View, but still $3.35 M for a 1300 sq ft house is toooo high IMHO
$2500 per sq ft
This is again Location, Location and Location. Last 3 months near by homes sold above 3M and the home will not go lower price as lot value increases by location. If the buyers adds sqft, the value can be easily 5M.
This is RBA core with FAANG near by, lot of multi-millionaires (20M+) are common.
This is like "Marissa Mayer buying funeral home ! " Google it you know this…!
I understand that the RBA core has lots of tech employees/couples who are highly compensated. But still, the economics of houses that cost 4-5M are mind boggling. These people must be making more than $1M per annum to afford the mortgage and property taxes.
To some extent, these smart buyers don’t break any sweat that they are overpaying by few hundred thousand dollars. They know that if they hold for 10 years, today’s $3M home will appreciate to $5M even if they don’t expand its square footage.
