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When is a California Purchase Offer Legally Binding?
A purchase offer is legally binding when legal delivery has been confirmed.
My seller asked when is a California purchase offer legally binding? He had accepted a buyer’s counter offer, signed all of the documents. We sent the package back to the buyer’s agent and asked for confirmation. Tick, tick, tick. No confirmation came. Next morning, tick, tick, tick. No confirmation. Then the buyer’s agent sent an email to say the buyer was over the top with excitement. Only little problem? We are not in contact.
Why isn’t the purchase offer legally binding? The seller accepted the buyer’s counter to the seller’s counter, so we have completed agreement, right? Not so fast. We don’t have a ratified contract. The reason is the buyer’s agent did not name herself as the recipient of the counter offer. The agent left that spot blank. Which means it defaults to the buyer to initial and confirm receipt.
We had no confirmed receipt in writing from the buyer. We did not have a done deal. And wouldn’t you know it? Another buyer wrote an offer and submitted it quickly for about 5% over the list price. The amount was significant. This new buyer really wanted the house. As a listing agent with a fiduciary to the seller, this is a situation that required immediate attention.
First, I notified the seller to see if he wanted to take the new 11th-hour offer. It was a lot more money. It was also subject to an appraisal, but same situation as the offer he accepted. Would it appraise at that inflated value? I gave it a 50 / 50 chance, which is pretty good. If it didn’t appraise at list price, the seller can still sell at the appraised value. Plus the odds are good it might fly at that price.
I let him know we could withdraw the accepted Buyer Counter Offer and take the other offer, if he so chose. Not my decision. My responsibility is to relay the pros and cons of the situation and let the seller choose. But the seller decided he likes the first buyer who is buying his home and will stay with the existing offer. See, you never know.
The point is to give the seller enough information so the seller can make an intelligent and informed decision. It is not to make the decision for the seller nor to sway the seller’s thought process.
Second, I notified the first agent again that we had not received the buyer’s confirmation and let the agent know there is another offer that is much higher.
Even so, we did not receive the buyer’s confirmation until around noon the following day. My seller is a sweet, kind, caring person and money holds a lower priority to him. If this seller was some other guy, I can wager dollars to doughnuts, he would have taken the higher offer in a heartbeat. This particular buyer could have lost her dream home because the agent left blank the spot for delivery.
Still, this is an excellent case study to answer the question of when is a purchase offer legally binding. As a Sacramento Realtor, when I find myself saying, “well, technically,” that means it is not binding until one more action happens. In this crazy Sacramento real estate market, buyers can get squeezed out on such technicalities.
Ever Hear an Agent Say I Don’t Want to Waste Anybody’s Time?
Agents might reconsider saying I don’t want to waste anybody’s time
When an agent prefaces an email by writing I don’t want to waste anybody’s time, the first thought that pops into my head is then why are you talking to me? Who are you, Al Pacino? If you truly don’t want to waste anybody’s time, it would seem as though you’re about to do that very thing you were hoping to avoid. I suspect what they mean to convey is they are about to say something the recipient does not want to hear.
In part, that’s probably true. Saying I don’t want to waste anybody’s time generally means the agent is probing for some kind of guarantee that the seller will be receptive to a lower offer. Further, it’s not really the seller’s time nor the listing agent’s time the buyer’s agent is worried about. It’s their own time. They don’t want to waste their own precious time.
But you know what? Sacramento real estate is all about writing offers and negotiating. You can’t know how a seller will respond until we present an offer in writing. Verbal offers are meaningless. A seller can’t legally accept a verbal offer. This means the buyer can’t go into court to complain, but your honor, she promised to sell me the house and didn’t. The judge will say show me the offer.
There are no guarantees prior to presenting an offer in Sacramento real estate. Every single agent, pretty much, who writes a purchase offer is potentially wasting his or her time. I want to ask agents who pull out that verbiage from their arsenal just how do they conduct any business? Are they so lazy that they email every listing agent to ask, hey, if I wrote an offer, would your seller take it? See, I don’t want waste anybody’s time.
Maybe they can’t handle rejection, and if the offer is never presented because it’s never written, they were never rejected. On the other hand, how many offers do you think fall by the wayside because they never materialized into a signed purchase contract? And they never materialized into a contract because the agent was too damn lazy to type it up.
Probably quite a few, would be my guess. Because you never know how a seller will respond. If the seller counters, you never know how a buyer will respond. That’s the beauty of negotiation. You get in there and do your best. You don’t sit on a high horse filing your nails and muttering: I don’t want to waste anybody’s time. That’s a sure-fired way to never go into contract.
Please don’t say to a Sacramento listing agent: I don’t want to waste anybody’s time. The truth is I have nothing better to do in my job than help my sellers negotiate a purchase contract. Believe it or not, that’s what I do for a living. It’s not called wasting time. We call it selling real estate.
How to Handle Request for Referral Fee from Non Licensee
An agent cannot pay a referral fee to a non-licensee.
In between listings yesterday, I grabbed a call from a woman asking for a referral fee if she referred her friend to us to buy a home. Somewhere, from somebody, she heard that a Sacramento Realtor might pay her big bucks to refer a buyer. I don’t get many odd calls like this, but I get plenty of peculiar calls. Most of the time I hear my husband chuckling away in the other room at some of the conversations. This caller wanting to request a referral fee felt a bit odd. My husband laughed pretty loudly at this one, so I thought I would share.
The first thing I asked: Do you have a real estate license?
No, she says, I do not. I just want you to pay me a referral fee. How much do you pay?
Me: To an unlicensed person, maybe I would give you a $25 gift certificate. We are not allowed to pay referral fees to unlicensed individuals. It is against the law.
Why do you have to tell anybody about the referral fee? she continued. It would just be between you and me.
Don’t you love it?
Me: “Because it doesn’t change the fact that paying a referral fee to an unlicensed person is against the law and I would be putting my license in jeopardy. My real estate license is far too precious to put it at risk.”
She signed. Obviously, she wasn’t getting through to my thick skull. I could hear those thoughts in her sigh.
Me: “You know what? You can continue to call real estate agents and eventually you’ll find a crooked agent who will do exactly what you want, so maybe that’s the path you should follow. Just keep calling. You’ll find a crook. But I am not a crook.”
Maybe you could give me a really nice present, she suggested, because my birthday is coming up in January.
Where do these people find me? Oh, right, the internet. My team member Barbara Dow took over. They agreed on a $25 gift certificate.
Agent Told Buyer Elk Grove is Unsafe Due to Security System
Claiming Elk Grove is unsafe due to home security is absurd.
Any agent who would tell a buyer that Elk Grove is unsafe because the owner has a security system needs to have his head examined. When I hear things like that, the first thing I do is take a peek at the agent’s Cal BRE license number. If it’s a really high number, say, near or over 2 million, it means the agent has been licensed for less than a year. To be fair, new agents are not always a problem if they are supervised and trained. Those who work for small brokerages, though, sometimes are not. Only thing worse are those who think they know everything simply because they have a license.
A license means the agent passed a test. It’s not a competence factor.
The basic way an agent learns about real estate is by closing transactions. The more sales an agent closes, generally the better informed. Lately, most of my problems seem to be with agents attached to license numbers over 2 million. In fact, I didn’t even realize we had obtained the 2 million pinnacle in California. Yes, this Sacramento Realtor holds number 697,006 from when I became first licensed in the 1970s. It’s taken us over 40 years to reach 2 million real estate licensees. That doesn’t mean that we have 2 million agents because the majority never renew their license.
I ran into 3 of those agents yesterday. All three said silly things. The agent who said Elk Grove is unsafe pointed to security cameras inside the home in Elk Grove. He noted several neighbors also had security systems. Therefore, the conclusion his tiny brain reached? This must be an unsafe neighborhood. When I looked at his sales numbers, he has never sold any homes in Elk Grove. Such really bad information to lay on a poor unsuspecting buyer.
Almost every home in Sacramento has some sort of surveillance. The number of security systems goes up when you move into newer areas like Natomas and Elk Grove. But saying Elk Grove is unsafe for that reason is absurd. Not to mention, even I have a security system installed in my home, although we don’t use it. I don’t think I’ve ever listed a home in Elk Grove that did not have a security system. Either builders include them or security companies go door-to-door offering free systems and free installation.
You would think the agent would have exercised his right to faulty reasoning by at least noting the security alarm was not armed. If the neighborhood was so bad, wouldn’t the security alarm be set? But now his buyer probably wouldn’t buy in Elk Grove if his life depended on it because his agent told him Elk Grove is unsafe.
Notwithstanding, many risk management plans don’t cover agents who speak to buyers about “safe” neighborhoods. Further, any bonafide real estate instructor would tell an agent never to make comments about crime because agents are not criminal specialists. An experienced buyer’s agent would refer a buyer to the police department or other websites for crime statistics and would never put themselves in such a precarious position.
I’d like to predict this is not a guy who will make it in real estate. But experience has shown me over the past 43 years that would not be a true statement.
What Types of Hardwood Do High End Sacramento Buyers Prefer?
Today, I have a guest blogger who’s an expert when it comes to flooring, especially when we’re talking about what types of hardwood do high end Sacramento buyers prefer. Debbie Gartner aka The Flooring Girl is from the NYC metro area, and she is up on all the latest trends for hardwood flooring. Here, on the West Coast and in Sacramento, we are showing the same trends and preferences.
For those of you preparing your home for sale, you already know that hardwood flooring is all the rage these days. It’s the preferred flooring type among Sacramento home buyers, especially those looking for higher end homes. Hardwood looks great and feels great as it simultaneously gives you warmth, luxury and authenticity. And, of course, we all know that hardwood flooring improves the value of your home.
Hardwood floors are timeless, and they usually last more than a century. They are a natural product and part of their inherent beauty is their natural graining and color variation. They are much cleaner and easier to maintain vs other flooring surfaces, and as a result, they also improve the indoor air quality of your home. Hardwood floors are here to stay.
What types of hardwood do high end Sacramento buyers prefer in luxury homes?
1. Dark hardwood floors
Yes, dark hardwood flooring is the most popular these days, especially among higher end home owners. The preference keeps growing. Dark is chic and elegant and goes so well with gray painted walls (gray is the most popular paint color now…even more popular than white).
Right now, cool shades are more stylish, so this combo of dark floors and gray walls work great together. Be sure to avoid red undertones in the stain color you choose (as red is dated and polarizing). So for those looking for dark hardwood floors, I usually recommend a 50/50 ebony/dark walnut or ebony/jacobean blend. They are dark and stunning (and they drown out the red undertones). If you want to go even darker, try ebony or even true black. (Duraseal would be the stain brand I’d recommend).
If you want dark floors, but want to go a bit lighter, then try dark walnut (by itself), antique brown or coffee brown. These are still dark, but they are a bit lighter, so they don’t show the dirt quite as much.
The darker you go, the less you will see the wood’s graining; when you are in the mid range, the more you will notice the wood’s graining. It just depends on your preference, but now I’m seeing more people prefer to camouflage the graining as it looks more contemporary and less busy in the room.
Dark isn’t for everyone, nor does it work in all home styles. It’s a great option if you have a lot of light, but it’s not always the best for very small homes or apartments that aren’t well lit. (Note: if the color of the wall usually has more impact on the room’s lighting than the floor does. After all, there are 4 walls and only 1 floor). Also, note that most people add area rugs and this will help lighten up the space, too.
2. Light hardwood floors
Light is the second most popular type of flooring. So, yes, both extremes are in. You can read more about the pros and cons of dark vs light hardwood flooring in this article. It’s one of the most common questions I get.
When people are going light, they are going very light … usually natural (i.e. no stain). Now, here’s the tricky part with light hardwood floors. The yellows and oranges are very dated. If you use an oil based polyurethane, your floors will be yellow, and they will continue to amberize over time due to the natural light and oxidation. So, they will be yellow and get more yellow over time.
But, there’s an easy way to solve this, and that is to use a water borne polyurethane. I highly recommend Bona Traffic HD above all the other choices (it’s the best….you can read more here: What are the best brands of polyurethane)? This will make your floors look lighter and they won’t look yellow. It will give you a more contemporary as well as neutral feel to your home. And, this polyurethane smells less and dries faster (and it’s better for the environment).
3. Gray hardwood floors
Gray is so hot and trendy now (yes, I know it’s a cool tone). This cooler color has been on the rise for 5 or 6 years, and it’s especially popular among higher end home buyers. Gray is more challenging is and expensive to achieve, and if you’re going to go gray with existing flooring, definitely hire a professional who knows how to refinish with gray.
Further, read this article on how to refinish hardwood floors gray..the right way). Many of the calls from across the country I get are from homeowners with a contractor who can’t seem to get the color right. Be sure that your contractor uses Bona Traffic HD for the polyurethane. This is super important both for looks and longevity. Most other polyurethanes will turn the floors yellow (including some of the other water borne polyurethanes).
If you are buying a home and love gray, I say go for it. But, if you are selling a home, please recognize that while gray is trendy, it’s still niche and polarizing to many. Going very dark (or very light) is probably a better option if you’re planning to sell in the next couple of years.
4. Wide plank flooring
Wide plank flooring is more stylish and it makes the room look larger. At a minimum, go with a plank that is at least 3 1/4″ wide. (The standard 2 1/4″ narrow strips just don’t look as impressive). This of course assumes you are adding new hardwood. If you have existing hardwood, I’d generally recommend that you keep what you have.
Of course, if you can go wider with a 4″ or 5″ plank, that’s even better as it’s more contemporary and will make your space look even larger. Please note that if you are installing 5″ or wider solid hardwood, you need to both nail and glue it, so this will cost a bit more for labor. That’s because planks expand and contract more. This is a common mistake made by general contractors (as they are not flooring specialists). Unfortunately, I see it too often and it’s impossible to fix (unless you completely rip up the floors).
5. Solid hardwood
I always recommend solid hardwood over engineered hardwood flooring, when you have the option. Solid will last MUCH longer. There is no question about it. Here in New York, virtually all mid and higher end homes have solid hardwood flooring, and I would guess it’s very similar in Sacramento.
Solid hardwood will last well over a century (in fact, we’ve refinished solid hardwood from the 1800s and even several homes from the 1700s). Solid hardwood also gives the option to refinish in the future (i.e. if they get scratched/worn down, if you have a flood or even if you just want to change the color and decor of your home).
6. Hardwood in the kitchen
Today, most homeowners prefer to have hardwood in all of the main living areas, including the kitchen. It’s easier on your feet (vs. tile) and easier to clean. And, importantly, having hardwood in the kitchen makes your home look larger and more cohesive. The fewer flooring changes you make from room to room, the larger your space looks.
If you check out the pictures of kitchens on Pinterest and Houzz, you’ll see how popular hardwood in the kitchen (especially dark hardwood with white cabinets). Now, we are even seeing hardwood flooring in powder rooms and entryways.
7. Satin and matte finishes
Shiny finishes are out! Shiny finishes are dated, look cheap and are impractical as they show scratches, dents and dirt more. Remember, avoid glossy and semi-gloss finishes. Go for satin or even matte finishes as they are more up to date and will last longer.
8. White oak over red oak (if you are adding new hardwood)
Many customers don’t realize that there are multiple species of oak. In fact, there are many. The two most common oak species are red oak and white oak.
While red oak is more abundant in the US (and therefore more common on floors), white oak is growing in popularity. I recently wrote an article on the 7 advantages of white oak hardwood floors.
The main advantages of white oak (over red oak) is that white oak is a bit more contemporary looking, it gives you more staining options (better for dark stains and gray), it’s a bit harder and it’s more resilient to water.
So, if you’re looking to install new hardwood floors, I would consider white oak flooring. If you are matching existing floors, then match to the existing species you already have.
Conclusion on Types of Hardwood Do High End Sacramento Buyers Prefer?
Hardwood floors are an important element of Sacramento homes, and they play an important role in your home’s decor. If you are buying a new home, the world is your oyster and you can choose whichever type of flooring your prefer; if you’re planning to sell your Sacramento house soon, I’d encourage to follow the trends and preferences among the higher end home owners and make sure they shades work with the style of your house. It’s also helpful to consult your real estate agent (or a stager) to get their perspective on what is most popular for your area and house style.
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