Owners of a Carol Lee Drive home in Cupertino were asking $860,000, but recently grossed 20 percent more -- $1.030 million -- after just nine days on the market.

On Maureen Avenue in Palo Alto, a tiny 1,120-square-foot bungalow, with three bedrooms and one bathroom, listed at $595,000 for eight days before it sold for $761,000 -- 28 percent more than list price.

A 1,996-square-foot, four-bedroom, two-bath home on Miramonte Avenue, also in Palo Alto, recently garnered almost 50 percent more than asking. It listed at $889,000 and in seven days a buyer paid $1.327 million.

How do you price a home when values are a moving target?

Even in Silicon Valley, where most homes have been selling for more than asking since the first of the year, pricing a home is pretty much business as usual -- with a few best guesses and twists tossed in, say the experts.

"Believe it or not, the market will still reject grotesquely overpriced properties," says San Francisco broker Ray Brown, co-author of "House Selling For Dummies" (IDG Books, $16.99).

Comparables, the most recent closed sales of homes comparable in size, location, age and style, along with other asking prices, remain the foundation of a well-priced home -- even in a market like Silicon Valley.

That's how Fred Sands-Los Gatos, CA agent Dave Tonna priced a $420,000 home in Campbell.

In a market with record low inventories, he had but two comparables -- and a "feeling."

"It becomes a feeling, not just number crunching. Based on the comparables, I had it at $399,000, but a week before the house was to go on the market, I'm getting a feeling that $399,000 is too low, so I said $420,000," Tonna said.

The home sold in eight days for $507,000.

But recent closed sales are old news in Silicon Valley's sizzling market. Prices are up more than 60 percent since the mid 1990s and the market's next milestone could be a home that sells for twice asking.

In such a fast market, Tonna and others develop their "feeling" by looking at pending sales or offers -- though not directly.

It's unethical for agents to share bids with anyone but the seller, but they can ask how near bids are to the asking price.

"You can't give out information on the exact sales price. Deals do fall through. But you'd be amazed at how you can play the is-it-bigger-than-a-breadbasket-or smaller-than-an-elephant game and get a good idea where the price is," said Brown.

Some buyers are calling in an appraiser to make sure they get what they pay for.

"People are afraid they are over bidding and want a house and know there will be multiple offers," said San Jose appraiser Terri O'Neill.

With limited comparables, her job is tough these days too.

Pressured by agents to bring in appraisals at the sales price, O'Neill must use the same tools agents use to put a value on homes.

"An appraisal generally places most emphasis on historical data, closed sales. That's great in a stable market. In a market like this, an appraiser must also consider any comparable pending sales, as well as available listings to get a good indication of the percentage of appreciation since the time of the closed sales," O'Neill said.

O'Neill then applies that appreciation percentage to a like home she's currently appraising.

"Some lenders accept it and some don't. More do now than before," she said.

Here's the twist.

Alamo, CA-based real estate investor Jack Reed says it's time to bring down the gavel on home prices in Silicon Valley.

"When properties sell very fast or for more than asking price, the asking price was set too low. It is a buyer's market because buyers are getting the houses for less than market value. The obvious answer is auction. In real estate, auctions are often used to avoid underpricing hard-to-value property," said Reed.

Also See:

Published: February 18, 2000

Use of this article without permission is a violation of federal copyright laws.

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.