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Elizabeth Weintraub
Is it True a Sacramento Listing Agent Must Present all Offers?
An agent asked last week what he could do when a listing agent in Sacramento refused to present an offer to the seller. Well, he could print out a photo of that listing agent’s mug, draw devil horns on the head, tack the picture to a wall and throw darts at it. That’s one solution. He could also report the listing agent to the Board of Realtors and the Bureau of Real Estate. It’s a violation to withhold an offer. Listings agents are required to present all offers to the seller upon receipt or as reasonably as they can thereafter. It doesn’t matter if the home is already pending, either. An offer comes in, that purchase contract has gotta go to the seller.
A listing with an “active short contingent” status is especially suspect because that status, by its very nature, attracts offers. Agents who refuse to present offers or say no offers are accepted for an active short contingent status in MLS can find themselves fined by MLS as well for violating its guidelines. However, listings of any status are not exempt from a listing agent’s duty to present all offers.
It also doesn’t matter if the purchase offer is written on a roll of toilet paper, the listing agent must deliver the offer to the seller. Real estate agents don’t have the ethical nor legal right to decide which offers the seller gets to see and which can be withheld. Not our decision. But you’d be amazed at how many Sacramento listings agents don’t understand this simple procedure or were never informed of its necessity.
Something else some buyer’s agents don’t realize is the rejection on page 8 does not need to be initialed nor signed by the seller. It is not required. If the seller rejects the offer, no signature is necessary. The listing agent is not required to return a page that shows the seller has rejected the offer by an initial or other acknowledgement. It’s only a courtesy.
An email from the listing agent to the buyer’s agent detailing the outcome of the offer is sufficient. If buyer’s agents try to demand a written rejection by the seller, basically they’re saying a) they don’t understand how purchase contracts work, and b) they don’t trust the listing agent — neither of which is likely to endear them nor their buyers; it’s just stupid and insulting.
If you suspect an offer was not presented to the listing agent, the first step is to ask your buyer’s agent or manager to speak to the listing agent’s managing broker. Brokers are responsible for the actions of their agents. I’d say that most listing agents in Sacramento realize they must present all offers and comply. It’s unusual for the opposite to happen. But bottom line, if you’ve irritated the listing agent, it probably doesn’t really matter what else you do. A complaint will just bring personal satisfaction and help to raise the bar. It won’t get your offer accepted. That’s the real world part.
Why Home Buyers Won’t Buy a Short Sale in Sacramento
Like any other home on the market today, even the few short sale homes need to be highly desirable in some way to entice a home buyer to buy a short sale in Sacramento. Price alone won’t do it because the short sale lenders will demand market value. I get emails from agents who ask if I would consider wasting my time and the seller’s time to submit garbage offers on behalf of their greedy little buyers who love to lowball, and you’ve got to wonder what planet these agents live on. As additional information, the agents might offer up the fact they’ve been successful with this approach once years ago, like anybody cares.
Oh, geez, thanks for telling me. I smack my head. Dang-nabit, I had no idea.
They might say let me tell you about my buyer. No, don’t tell me. I don’t care. I don’t want to hear about his or her motives, angles, mission. I care only if the buyers are willing to do what it takes to get the lender to approve the short sale. Will they wait for approval and not cancel? An agent asked yesterday if it was OK for the buyer to cancel after I worked my tail off to obtain the short sale approval letter, in the event there was something about the property the buyer didn’t like. Sure, I replied, but be aware that I will then drive over to that buyer’s home and slash the tires on his car. Oh, he laughed and laughed.
Wow, we really want to take that offer. The buyer sounds so dedicated.
Today’s buyers, most of them, don’t want to wait for the short sale process. If they do decide to buy a short sale, it’s because the home is unique and it’s the only one like it on the market for miles around. Other short sale buyers are those who have a home to sell, and they are are buying contingent on selling. No fuss, no muss, no risk. If the contingent home is my listing, for example, I know their home will sell because they will be realistic, so those generally work out. But there is not a flood of buyers for short sales today.
I sold a Victorian short sale home in downtown Sacramento a few days before I left for my long winter vacation early last December. I worked on that short sale while enjoying an oceanfront view and warm breezes. Everybody was happy at the inception. We submitted all of the required paperwork to both banks: to the Bank of America short sale department and Chase. Chase had recently joined Equator but was not yet in Equator for this type of Chase short sale. Before the end of January, we had HAFA short sale approval from Bank of America. Eureka!
Chase Bank, because its HELOC department wasn’t yet in Equator, dragged its feet for another 60 days, despite repeated requests and hammering. The negotiator at Bank of America refused to give us an extension on the short sale and instead insisted on starting over. An unusual shitty move when the servicing was not sold. When Bank of America re-opened the file, it somehow messed up processing it as a HAFA. A logical person would think Bank of America vendors look at the previous file, but that would be like expecting a Sacramento real estate agent to study the history in MLS of a previous listing — just ain’t gonna happen.
Despite the HUD identifying this transaction as a HAFA and the notes I routinely slipped into Equator as a reminder, nope, it was processed as a traditional. A short sale agent doesn’t ordinarily discover these types of bank screw ups until the counter is issued in Equator. The seller didn’t care about HAFA by that time.
At several points, the buyer wanted to cancel. She was tired of waiting and didn’t really understand the delays. She delivered ultimatums, which don’t work. At another time, the sellers wanted to cancel. They had moved out and no longer cared about receiving the HAFA incentive; they just wanted it closed. The opportunity to eat the negative cash flow and rent it was beginning to look attractive to the sellers. In between, neighbors called to ask if was OK for them to steal the seller’s cats and take the critters to city animal control. Like wha? My main concern was the amount of time it would take Bank of America to process this as a traditional short sale after Chase finally got its act together.
I find my way around stumbling blocks. It’s what I do. The short sale closed this week, with the original buyer happy as a clam, extremely excited and relieved. The sellers are ecstatic. They appreciated my calm demeanor and keeping them on track. Approval from both banks took 5 months. That’s unusual and a long time.
Although I have closed hundreds of short sales in Sacramento, there is never a guarantee that we can get both of the short sale banks to cooperate and issue approvals at the same time. Often issues and delays pop up, regardless of how streamlined we make the process. If something can go wrong on the other side, it often does. Patience is the key to a short sale. And buyers in Sacramento don’t have a lot of patience in today’s real estate market.
How Do You Know if the Sacramento Home Buyer is in Love?
Because it ain’t over ’til the fat lady sings in Sacramento real estate — meaning home buyers basically make a zero commitment during the first several weeks of escrow — it’s not unusual for a seller to worry about the buyer’s intentions. Is the buyer serious? Is the home buyer in love with your home? An offer means little, believe it or not. The offers I receive from buyer’s agents on behalf of my sellers generally provide very little insight. I’m lucky if the agent manages to tell me anything tangible about the buyer. It’s not unusual for an agent to scan the offer to my email without so much as an introduction or greeting.
You remember the components of a letter, right? Well, if you’re of a certain age and dig way back in your attic, you’ll recall the salutation, body and closing. Nobody bothers with that formality today. In fact, I’m grateful if an agent says, “Hey, here is my buyer’s offer.” Or, maybe they send a link so I can retrieve the offer myself from ZIPforms or Dropbox.
There is no interaction. No discussion, usually, unless I generate it. The bulk of emails with offers attached that share any insight whatsoever about the buyer will commonly note: The buyer is in love with the home. They better be in love with the home; I don’t know any buyer who isn’t in love with the home — except the buyers who swear on their grandmother’s grave they are so in love with the home and then won’t pony up an extra thousand or two to meet the seller’s counter offer.
They’re in love to a point. Don’t tell us how much a buyer is in love with the home, show us. Put your money where the agent’s fingertips have traveled on that keyboard: present that huge honkin’ earnest money deposit and make a few concessions.
A seller asked this morning how we can tell if a buyer is serious. That’s a tough one because we are forced to rely on the documents before us and veteran agents with a few decades behind our big fat butts, well, we partly rely on intuition. Gut instincts is a collective intangible asset developed over years. Listing agents like me will draw attention to any item that could cause a problem in the purchase offer as a reason to disqualify a buyer when helping the seller to choose between two or more buyers. Anything that makes a buyer appear less qualified or uncommitted, pffft, out of the running.
Choosing between offers can result in assigning negative points to certain things such as type of financing, credits, length of escrow, repair demands, mortgage lender, agent experience, inspection periods, among other aspects of the purchase contract. Too many negative points and your offer won’t get accepted. In this market, sometimes one negative point is enough to make a buyer lose a home.
Tip: If you’re a buyer who is trying to buy a home in Sacramento, figure that you have competition for every home you want and ask your agent to perform accordingly. Agents, take a few minutes to share the strong points of your offer / buyer qualifications with the seller. Don’t just email an offer and skidaddle off to your lake house for the weekend. Tell us why the seller should take your buyer’s offer over another.
How Being a Bad Influence Pays Off in Sacramento Real Estate
Bucking the trend, being a maverick or rebel, is often frowned upon in society because it could mean a person is not a team player, doesn’t fit the norm, but in Sacramento real estate those traits in a real estate agent are very helpful. I can’t tell you how many times I have heard as a kid some parent warn my parents: that Elizabeth is a bad influence. Up yours is what I thought when I heard that crap. I’m not making your kid do anything that kid doesn’t wanna do.
I’ve realized from a young age that a person can pretty much do whatever a person can dream up. I’ve always thought: what if we do it this way instead? Or, how about this idea? And they weren’t always popular ideas or necessarily the best ways to do things, just different. Yet they worked. I’ve never thought of myself as a trendsetter or a person with followers, no entourage, I don’t care how many people read my prattle on Twitter and, quite frankly, if you’d have me in your organization, I’m not so sure I want to belong there; yet I know people still gravitate to stuff I write.
I don’t have anything out of the ordinary to say. I call it like I see it. This is a reason why people trust me, and why my clients can rely on my advice. I don’t generally say stupid things.
But there’s always tomorrow.
Being a bad influence means people often do what I want. I just give them permission to do what they already want to do.
When I met with sellers earlier this week, they asked why the price I suggested for their home was so much higher than the agent they had already dumped. Well, my price suggestion had nothing to do with the fired agent. It was based on the pending sales, peppered with the sold comps. I wet my finger and stuck it in the air to see which way the wind was blowing. It’s OK that people ask how I arrived at a conclusion. It’s OK if they ignore it, too. It’s not my house. These people took my advice, though.
I met with another seller and mentioned the smoke alarms needed to be installed in the sleeping areas. Lenders require it. She had installed a smoke alarm in the hallway and felt that was sufficient. Then she argued about it and told me I was wrong. Over and over. That she is a homeowner, so she knows the laws, and just because my profession depends on complying with regulations to close escrow, well, what would I know? She’s a maverick and I kinda like her. And she can find out the hard way. It’s not my house. This one, I’m not gonna argue with.
For a person who is a bad influence on others, real estate is the perfect place to be. If you want to know why my sellers typically get top dollar over other listings in the area, it’s because they listen to this bad influence. Call me at 916.233.6759.
Even Land Park Agents Need Access to the Interiors
Why can’t you send me an electronic estimate of the value of my home in Land Park, asked a seller via email. He seemed rather irritated that I would a) correspond with him and expect a discussion when he preferred anonymous interaction, and b) why I wasn’t doing what he wanted me to do. After all, I’m a Land Park agent who lives and works in Land Park, and I have a ton of experience selling hundreds of homes all over Sacramento. Why, Zillow promised I would send him an estimate, and that’s what he expected. Why was I asking if I could see his home in Land Park? That just didn’t sound right.
Why wasn’t I a robot? Isn’t that what the internet is for? You ask a question and get free information? What the hey . . .
It took me a while to explain that Zillow is a private website with which I have little interaction except that it maintains my profile and manages reviews for me, and I pay to have my photo plastered around Land Park. On top of which, the homes in Land Park are special and unique. They are different from each other. They are not tract homes like you’d find in Natomas or Elk Grove. An interior inspection could make the price swing by $50,000 to $100,000 to $150,000 or more. It’s only one of the reasons why Zillow is so completely inaccurate when it comes to pricing of homes in Land Park.
Many online property value websites use a computer algorithm and do not take into consideration upgrades, orientation on the lot, nuisances next door that could affect value nor the emotional pull of architectural details. That’s why a Land Park agent needs to see the interior of the home before rendering an opinion of value.
I mean, I could send a CMA, which is a comparative market analysis, but it involve throwing numbers into the air. It wouldn’t carry any weight. It would have no meaning. It would not be an appraisal or even a very good estimate of market value. It’s not like I belong to a secret cult that allows me access to information on behalf of the seller. I need to look at the home with my own two eyeballs, the old fashioned way.
Do I need to personally inspect every home in Sacramento to determine value? Surprisingly, no. Sometimes I am right on the money just knowing the neighborhood and amenities, but homes in Land Park, regardless of my familiarity, need the personal touch. Just like homes in East Sacramento and Curtis Park and Midtown. You can’t look at numbers and determine value without interior access. No professional REALTOR would attempt it.
After I explained all of this and was successful at getting him to understand, turns out the seller isn’t yet ready to sell. Not until the fall, after his tenants move. So a value submitted today would change by this September anyway. And the September market in Sacramento is different from the spring market. We’ll meet up after the summer is over.
