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Elizabeth Weintraub
Three New Home Listings in Sacramento Metro
As a Sacramento real estate agent who lists a lot of homes, I’ve got to replenish inventory that closes with more homes for sale. It’s the same with anything in life. If I run low on milk, for example, I might have to stop by the store on the way home and pick up another carton. I apply the same principle to items in my own home. If I buy a new piece of furniture or article of clothing, something else must go out the door. It’s a system of checks and balances. It also means after a few homes close escrow, more homes had better go on the market or this agent would soon run out of homes to sell.
Fortunately, the replenish system has been working well for me. I love to sell homes, even if I have to sell homes twice. You’d kind of expect that to happen in a short sale but not in a regular real estate transaction. Two homes that should have closed escrow last month did not, and they canceled. Both were traditional sales involving buyers who could not get a loan at the very last minute. The files sat in underwriting and were spit out. Denied.
Both sellers were understandably distressed and dismayed. I get their pain. In one situation, I told the seller that I was confident we would put the home back on the market, sell it for more money, and he’d look back at this particular cancellation and say it’s the best thing that could have happened. That was my intuition talking.
I love it when my intuition is right. It generally is, and I can rely on it. That’s exactly what happened, too. The next buyer paid cash, no appraisal. In the other sale, the replacement buyer had written a contingent offer. Sellers are often wary of contingent offers, but they can also be used as a benefit. And the contingent offer buyer removed the contingency within a couple of weeks and closed as well. Both of these escrows closed on Friday.
I’ve replaced these two sales with three more listings: An energy-efficient home in West Sacramento near the river at $240,000. An Elk Grove home, updated kitchen with granite counters, new appliances and wood floors, featuring 4-5 bedrooms, more than 2,700 square feet, turn-key ready at $395,000. These homes are open for viewing this afternoon. And last, but not least, a short sale home in Sacramento near Calvine, offering allergy-free floors, 3 bedrooms, formal living room with a brick fireplace and cozy family room at $225,000. Check out my new listings:
142 4th Street, West Sacramento, CA 95605
A Perfect Storm Short Sale Denied
With the exception of an FHA short sale, I can’t recall the last time this Sacramento short sale agent lost a short sale. Every short sale I do in Sacramento pretty much closes as long as the seller doesn’t give up. It is extremely unusual and rare for a bank to deny a short sale these days. I’ve been selling and negotiating short sales since 2006, so that’s about 8 years, and back when short sales started, maybe half were accepted. Not so today.
Today, it’s about 100% that close, and I’ve closed hundreds of short sales. Because banks generally prefer a short sale vs foreclosure. Properties are most likely in better condition, which helps them sell for more money; and there is a pool of buyers who believe a short sale is a good deal even when it’s not.
To close a short sale, the transaction needs to be a round peg that fits into a round hole. Follow the rules and the short sale is approved.
To over simplify, the basic rules are this:
- Seller must qualify
- Sales price is market value
Sellers often ask me how I know their short sale will be approved, and it’s based on those two factors. But sometimes the investor guidelines stipulate that the bank cannot do a short sale. PSA agreements can make it more profitable for the bank to foreclose. We don’t have access to the PSA agreements as mere real estate agents, so we won’t know for certain whether the PSA will kick out the short sale until a package has been submitted and reviewed.
We can get around that problem by submitting for a HAFA short sale. Most of the banks participate in the HAFA short sale program, as long as the investor is not a government entity. Government-sponsored entities have revamped their own program versions. But when a bank does not participate in HAFA in 2013, that is probably a red flag.
You would think the bank could disclose upfront. You know, read the guidelines and say nope, don’t bother submitting. That would be too intelligent and logical. Two words that don’t describe the American banking system. Instead, they put everybody through the song and dance before slamming hopes.
You Can’t Trust All Sacramento Appraisals
It’s not astonishing that people do not understand how a Sacramento appraiser appraises a home, and why not all appraisals are a guarantee of value. Unless you’re a person who is really wedded to this business, like, say, this Sacramento real estate agent. But most individuals don’t sell or buy enough homes in their lifetime to care much about the details. They also might think a bank appraisal is like receiving a certificate of gold, as though it’s redeemable somehow or an item of value to treasure.
I see the look in the eyes of my sellers when I explain that a home needs to appraise at the price a buyer is willing to pay in order to actually close escrow. The eyes glaze a bit and they hear: real estate agent talking — a phrase my husband likes to use to illustrate how carefully I listen to him as in husband talking, yada yada.
For example, if you’ve got two offers for a home, and one offer is cash at $400,000, and another offer involves minimum-down FHA financing at $400,000, a seller might elect to take the cash offer. Because there is no appraisal. Of course, the downside to that is the cash offer buyers typically possess little emotional investment, and once they snag their fish, they often try to haggle over other small things to even out stuff.
Now, some buyers might agree to bridge the difference if an appraisal comes in low. They might say they will pay, say, $10,000 in cash, meaning if the appraisal was $390,000, they would pay out of pocket the difference for the low appraisal. Some do, but not very many. That’s because people still believe the appraiser’s word is like the 10 Commandments. Others also might promise they’ll bridge the difference but then cancel under an inspection contingency, rendering that promise worthless.
An appraisal is just an opinion of value. It’s an educated and calculated guess. Ask 3 appraisers, and you’ll probably get 3 different answers. They might be close in value, but still not match.
Sometimes, the swing in value between two appraisals is tremendous. Had one of those recently in which the home initially appraised for 10% more than it sold for, which was pretty ridiculous in a seller’s market for long days on market, and the second appraisal was 2% less than it sold for, still ridiculous. An appraiser almost has to be trying to mess up the deal to do that.
I recall an appraiser a few years ago who appraised a home for .0001 less than the sales price. Just enough to make the buyer pay for a new appraisal. Who does things like that? Most appraisers in today’s market want to appraise at the sales price because they recognize that prices are increasing. They don’t want to be that cog in the wheel dragging down the market, and they want to fairly assess homes.
But until you get past that appraisal stage, you don’t really have a sale. So don’t be spending that check yet. It’s common in today’s real estate market, especially for an FHA transaction, for a lender to order a second appraisal. It says if a bank doesn’t trust its appraisal, why should you?
Humor in Dying and the Affidavit of Death
You never know who you will touch with your words when you write online, but you can bet it will probably be a person who is alive. An agent in my office yesterday asked how I can be “everywhere online,” and he asked if I spend a lot of time in front of the computer. Not really. I write a blog every day about what I do as a Sacramento real estate agent. I’ve written other articles online that stay there and continue to be read by people day after day and year after year. Like I reminded the agent in my office yesterday, I was sitting on top of a desk talking to him. I was not at my computer.
That’s the beauty of writing online. People will read articles long after they are written. I also write a homebuying newsletter that I send out every week to my subscriber base. I can’t tell you how many people subscribe to it because it’s confidential information that About.com won’t let me divulge, but let’s just say it’s a good thing I don’t have to maintain nor update that database of subscribers.
I often highlight a new article I’ve written in my newsletter. Most of the time, I never hear anything from anybody, but the article I wrote about an Affidavit of Death generated a lot of emails (positive, thank goodness). First, I must admit that it is a humor piece. It starts out pretty serious, and then it heads into a different direction, one that I hope tickles. It might take you a little while to figure out that it is one huge parody. Real estate agents in particular find it amusing. It was a real estate agent who initially asked me about an Affidavit of Death as a marketing tool and prompted the article.
I’ve had people ask if the agent who initially wrote to me had responded to this article, and yes, she did. She changed her mind after reading it, apparently. Another agent wrote yesterday to say she received my newsletter while she was in the hospital with her husband. He died a few hours later. Right when she was sitting there reading my Affidavit of Death article! . . . and laughing. She thanked me for it. I guess humor helps. See, it’s stuff like this that makes my day.
It also reminds me that no matter how bad a situation might seem, there is generally an upside to it somewhere.
Why Photos Matter for a Sacramento Home Listing
A client implied a while back that this Sacramento real estate agent has other sources of income primarily because I am a real estate broker. It occurred to me how little the public knows about the real estate profession. They talk to friends who feed them misinformation. Being a real estate broker means I am held to a higher standard of knowledge, which can result in a higher level of personal liability, actually. But it doesn’t equate to a higher commission check. I still work for Lyon Real Estate, which has its own broker.
Moreover, sometimes sellers think that we real estate agents have a magic wand for selling their home. That we are going to do something special, out-of-the-ordinary or spectacular like fly the Goodyear blimp over their home and drop ch-ch-ch-cherry bombs or give away a free BMW. They figure we know just what to say to make that buyer whip out the checkbook and write an earnest money deposit.
The truth is buyers do whatever the heck they want to do. And I’m seeing a lot of them pause and reflect before writing an offer, which is excellent news. Impulsive purchases can lead to buyer’s remorse and cold feet.
Last spring, I’d receive offers from buyers before I even noticed their agent had shown them the home. I try to check MLS every night to follow up on my listings. Now, I see offers coming in a few days after a showing. So, either buyers are looking at more homes before making an offer or they are taking their time to consider which home they want to buy.
When I put a home on the market, I like to tell myself that it’s my carefully crafted description of the home that is motivating a buyer to go see it. However, we all know it’s the photos. Because you can’t sell a home online. The only thing a listing agent is doing by putting a listing on the online is motivating a buyer to want to see that home. You can’t sell a home if you can’t get a buyer inside of it. Photos entice a buyer. Photos tell a story. Photos speak a 1000 words. Photos deliver a message. Photos matter for a Sacramento home listing.
When a seller lists with Elizabeth Weintraub, the seller also receives professional photography, shot with a Nikon and not a cellphone camera. I use PhotoShop to brighten and color correct. Sellers like my photos so much that they often ask me to make them a CD at closing, which I gladly do. I’d like to photograph your home, too! In fact, I’m off this morning to shoot a home in Elk Grove. Call me at 916 233 6759.
