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Elizabeth Weintraub
A Sacramento Agent is Not Always Sitting Behind Her Desk
The last few days have been so weird in Sacramento real estate. I’ve got sellers saying they don’t know if they should accept an offer, even though most of their two-dozen offers are more than list price, and I’ve got buyers on other transactions saying they don’t know if they want to close. Why, it’s enough to want to make a Sacramento agent want to write an article about an Affidavit of Death. OK, I couldn’t help it, but I hope you like that link. 🙂
It would be easier if the next time I decide to plan in advance for months and months a vacation somewhere wild if I would just move the date up just one day early. Then, everybody would think I was leaving on, say, a Monday, instead of a Tuesday, which would give me one whole extra day to take care of last-minute problems that have a way of being very last-minute, up to the point of when I’m boarding the freakin’ plane.
It’s enough to give a normal Sacramento agent a heart attack. But no heart attacks for me. When I go, it will be something much more horrendous. I was lounging about at the doctor’s office yesterday in my underwear, waiting for almost 40 minutes on the examining table before the doctor popped her head in the door. We just have to do a little biopsy, she says. Nurse, oh, nurse, where is my razor blade? I can’t do a a biopsy without a razor blade. Flipping her gloved fingertips in the air. Twirling. Waiting.
Conditions aren’t always quite so comforting while I’m lying on my back and trying to answer emails on my cellphone. Doctor sticking a numbing needle in my stomach. Ouch. Slicing off pieces of skin with razor-sharp, um, razors (who knew?). What is astounding to me is when clients sometimes say my emails are too short. They have no idea what this Sacramento agent is actually doing while I’m attempting to respond quickly to their concerns. People who know me are groaning. People who don’t are wondering what I’m talking about.
No matter what, I still try to give first-class service to my clients. I have systems in place, team members from the Elizabeth Weintraub Team who will jump in to help, and even then, I have a really hard time going on vacation. I don’t want anybody to think I have abandoned them, because I haven’t. Not really. Not ever, if I can help it.
F-Bombs and Sacramento Real Estate Agents
An agent from Davis called yesterday and dropped F-bombs left and right. Said she had moved here from southern California. She wasn’t upset or anything, it’s just the way she apparently talks to other people. People she doesn’t know. People she’s not even mad at. She seemed angry with the world and complained a lot about how we sell real estate differently in Sacramento than agents do in southern California.
I’m not so sure about that. I used to sell real estate in Newport Beach in Orange County several decades ago. Escrow is handled a little bit differently from north to south in California, but agents are still pretty much the same. In southern California, escrow instructions are signed right away after an offer is accepted, and the escrow officer is on top of the file from day one. In northern California, most of the documents are signed at closing.
As a veteran Sacramento real estate agent, I’ve been selling real estate in Sacramento for so long that I’ve grown very accustomed to the way we handle our processing in northern California. It seems to be a bit more civilized and makes more sense. Why go to all of that work when the file might not close, seems to be the premise in Sacramento.
Because after an offer is accepted, the appraisal still needs to be completed, the buyer has to conduct a home inspection — during which problems could arise, nothing that requires F-bombs — not to mention, a buyer might not make it out of underwriting. It just seems to make sense that most of the paperwork is consummated after the borrower has lifted the contingencies and the loan is ready to fund.
But regardless of my opinion about whether selling real estate in northern California is easier than in southern California, I don’t believe agents should swear at each other. Sheesh. It was ##$^@ this and *&%$# that. Plenty of F-Bombs. I wanted to ask that agent what pool hall she had rolled out of that morning, but I figured why irritate her further.
Timing the Sacramento Real Estate Market
A seller in Elk Grove just pocketed an additional $75,000, due to timing the Sacramento real estate market. It’s not that I recommend trying to time the market, because it’s almost impossible to do. But you can get lucky. It’s a roll of the dice. Just look at Donald Trump — oh, my poor eyes — because he doesn’t always accurately predict much of anything.
We put this home in Elk Grove on the market in the spring of 2012. I sell an awful lot of homes in this particular part of Elk Grove. This home is located in the highly desirable area of the Machado Dairy subdivision over by Bruceville and Bilby, close to Machado Dairy Park. Buyers like this neighborhood for the schools; the homes are somewhat newer with mature trees. It’s bordered by farm land, which makes you feel like you’re out in the country with all of this open space.
There are so many upgrades in this home. People wonder why a home next door with the same square footage sells for so much less, and it’s upgrades. Ask a short sale seller about upgrades. They will tell you about the cost of every single upgrade down to the penny. But this home was not a short sale, it was a regular equity sale. When we came on the market, many of the homes around it were short sales but even so, we sold at the highest price possible — at a price that barely squeaked through an appraisal because there were no comps in that immediate neighborhood.
The buyer could not close. She could not close because she could not get her tax returns verified because she filed her taxes late. The government was running behind. When the buyer’s escrow extension expired, the sellers canceled the transaction and decided to wait. That was a smart move.
Now, a year later, because the market had gone up, I wrote to the sellers to suggest that they sell their home in Elk Grove at this time. Still, there were almost no comparable sales to justify her sales price, but we sold at the top of the market. The sellers made an additional $75,000 by timing the sale.
Buying a Home in Sacramento in AS IS Condition
AS IS — two simple words that seem to cause so much confusion in Sacramento real estate. I can say AS IS over and over until the cows come home and it doesn’t seem to sink in. My sellers can ask me to draw a counter offer or an addendum to a purchase offer that clearly states there are: no repairs, no credits, no renegotiations, as the home is sold in its AS IS condition, and buyers can sign that document, yet soon as their pen leaves the page, their memory of this contractual agreement vanishes. Did they dip a feather quill into lemon juice? Have a lobotomy?
My heart goes out to buyer’s agents who have to deal with the AS IS Condition issue day-in and day-out. They can explain that a seller will not give them a credit nor make any repairs but the buyers will still push. I realize that sometimes it’s not the buyers who are the problem — it can be their relatives or their coworkers or their drinking buddies: Hey, when I bought my house, the seller painted the entire interior, bought me all new appliances and threw in a Mercedes. The implication being that the buyer is a wuss or a nitwit. The self-important braggers neglect to point out this was 20 years ago or in a different city but the point is it is not this transaction. All transactions are different.
When I receive an email from an agent with a single sentence attempting to defy the AS IS, I know what happened. The sentence might say, my buyer is requesting a $3,000 credit to closing costs. Or, my buyer would like to know if the seller will split the cost of a new roof, which might have been a talking point during negotiations. So, the agent feels a little silly having to ask that question because the agent had already discussed it with the listing agent and the buyer prior to the offer. I know the agent pointed out the roof and said it was the buyer’s responsibility. And I know the buyer understood. And we both know that I know.
Still, the buyer’s agent must ask the question if the buyer poses it.
If the buyer’s agent thinks the buyer has half a chance of obtaining any of these requests — which the buyer had made after the buyer promised not to make them — the buyer’s agent will try to build a case for the buyer. But when there is no case presented, just the request, I know the poor agent is feeling the pain.
Buyers often don’t stop to consider that they might be irritating the seller with these types of requests. Especially when they tripped over the sidewalk walking up to the front door. They should not come back later after promising not to ask for repairs and demand that the seller replace the sidewalk. It makes the buyer look like an idiot (or conniving), none of which sets well with the seller. Any special requests the buyer might need down the road, such as an extension to close or any gifts such as refrigerators or washers and dryers are unlikely to be granted when a buyer attempts to break a promise.
If a buyer doesn’t want to handle the consequences of purchasing a home in its AS IS condition, then maybe the buyer shouldn’t try to buy a home under those conditions in a hot Sacramento seller’s market. It’s all a part of home ownership anyway. Things break, malfunction and stuff need to be updated, repaired and maintained — all during the life of a home buyer. It’s scary for a buyer starting out, and that’s where the buyer’s agent can be an invaluable tool.
How to Buy a Home Contingent on Selling an Existing Home
Buying a home contingent on selling an existing home looks like it is coming back in Sacramento. The purchase contract for that contingency has been revised, which is actually pretty good for sellers. We have not seen very many contingent offers to buy a home in Sacramento for years. The way a contingent offer works is when a buyer makes an offer to a seller that is contingent on (or subject to) the buyer successfully closing the sale on her own home.
It’s often difficult to buy another home when you have a home to sell. Making an offer contingent on selling doesn’t always go over well. Especially if the home you want to buy is desired by so many other buyers who do not have a home to sell and hence no contingency. These others buyers can waltz in, plop down an offer that says: here’s your cash, I’ll get a loan and close. Easy peasy. So, contingent buyers are forced to compete with non-contingent buyers and, in hot seller’s markets, that puts a contingent buyer at a huge disadvantage. What’s a seller gonna do when she’s looking at Offer A at the same price as Offer B except Offer B has a contingency? She’s gonna take Offer A.
But the Sacramento real estate market shifted a bit over the summer. We have more inventory now. Interest rates are edging up, which puts downward pressure on prices. I get a kick out of the way our N.A.R. chief economist Lawrence Yun spins it as: rising interest rates gives us a smaller pool of buyers — the pool of buyers remains the same, it’s the price of the home those buyers can purchase that declines. This market is more conducive to an offer contingent on selling.
It’s like a domino effect, though. If the buyer for the buyer’s home can’t close, then the buyer can’t close. Underwriting conditions are stricter, too.
However, the revised 11/12 C.A.R. Contingency of Sale or Purchase of Other Property offers sellers by default the right to continue to market the home for sale and to accept backup offers. If the seller accepts a backup offer, the seller is free to give the contingent buyer 3 days notice to remove the contingency to sell her home. In other words, the seller can pretty much kick out the contingent buyer if the buyer doesn’t release the contingency.
It’s no skin off the seller’s nose to accept an offer contingent on selling. Because you know what normally happens when a listing is sitting in MLS in active status with a pending rescission modifier? Other buyers see it and realize somebody else wants that house, and the desirability shoots way up. I know it’s odd but that’s the way it works. Some Sacramento listing agents might not know that they are no longer forced to change the status to pending with a contingent offer.
Call Elizabeth Weintraub, Lyon RE, to buy or sell a home in the Sacramento four-county area at 916.233.6759. I’ve been at this for almost 40 years now.
