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What Happens After the Notice to Buyer to Perform?
Buyers who receive the Notice to Buyer to Perform could be subject to cancellation.
Few home sellers in Sacramento really look forward to executing a Notice to Buyer to Perform, but sometimes that real estate document can become a necessity. ¡Si, yo necesito! That generally come about because the buyer has not taken some sort of contractual action arising from the California Residential Purchase Agreement. Things such as removing the inspection contingencies or appraisal contingency. Just because the contract by default gives the buyer 17 days to remove inspection contingencies does not mean those contingencies automatically expire on Day 17. NO, contingencies can continue until closing if not released.
(I say NO like el Español. With emphasis. The thing I love about my Español lessons is the native speaker uses such passion. He says NO like NOH! Short and sweet. Like he means it. Don’t bother him anymore. Go away. Stop talking. End of story. It’s an attitude, people, that goes into speaking Spanish.)
Back to my story. If the buyer has not released contingencies, and we’ve made several requests to the buyer’s agent, the next step is to issue a Notice to Buyer to Perform. The document gives the buyer another chance to perform prior to cancellation of the contract. The seller is not required to cancel the contract, but most sellers will issue a unilateral cancellation if the buyer fails to take action.
Sometimes buyers stop responding to their agent. But what happens if the buyer’s agent stops responding? That could be a different story. It’s not unusual for an agent not to reply to an email, text and voicemail, especially if that agent is occupied elsewhere, like some are, yet I’m not condoning that kind of behavior. It’s triste. On the other hand, an agent could be in the hospital, out of the country or involved in an emergency. It’s not a good idea to cancel the buyer simply because the listing agent has received zero communication from the buyer’s agent.
In that instance, I will call the buyer myself to inquire. Por supuesto, I first tell the buyer’s agent what I propose to do. If he or she does not respond to me, though, ¡qué pena! It’s not always the buyer who is failing to perform. It could very well be the buyer’s agent. As a Sacramento listing agent and a Realtor, I am required to be fair to all parties. No sense in penalizing a buyer because the buyer’s agent dropped off the face of the earth. I’m just here to get the job done for my sellers.
How Much is My Home Worth in Sacramento Will Shock You
You will be shocked to learn how much is my home worth today.
If you’re wondering how much is my home worth in Sacramento, prepare to be shocked. Could you use an extra $200,000 of equity right now? All the market reports in the world won’t prepare you for the actual value of your own home until you talk with a seasoned Sacramento Realtor. Even Zillow won’t give you a solid number, as the estimates on Zillow are only that, an estimate and, there is no actual website available online that will give you all of the information you seek. Realtors pull data from a number of sources, and we are specialists in many areas of Sacramento.
We have the missing pieces you need.
It’s no secret that during the crash years of 2005 to 2011, I worked with more short sale sellers than any other agent in the area. But then that period ended. I still handle a few short sales here and there, but for the most part, short sales in Sacramento are basically over. Today I specialize in real estate in four counties, ranging from entry-level homes to luxury homes, designing individual marketing strategies for each of my sellers, paying enormous attention to detail, which returns maximum profits to my clients. My team members show homes, and I work with sellers. It’s a winning combination!
Earlier in the week, I ran across a folder from 2012 filled with potential short sale clients who, for one reason or another, elected not to do a short sale. They were sellers who were underwater. That was four years ago. I began looking up the market values of their homes, because it seemed to me they were not underwater anymore. I was absolutely correct. Every single one of these potential sellers now have equity, some have acquired more than $200,000 of equity since that time!
Discovering How Much is My Home Worth
What a shock to examine how much is my home worth and discover it’s not what you thought. People get busy with their lives and are not aware of how much their home has gone up value. It happens even to Realtors. I know an agent who woke up one morning in Minneapolis, realized her home had tripled in value over the past 5 years, and decided it was time to grab the money and get out of that frozen tundra. You might think the same way. You might also think if you’re not planning to sell, what does it matter how much your home is worth?
It matters because if you knew that number, you might decide to sell. To change your life. To upgrade to a larger home, downsize to a smaller home or get the hell outta dodge, whatever. Call me. Call Elizabeth Weintraub at 916.233.6759, and I’ll be happy to answer the question of how much is my home worth. Could you use an extra $200,000 of equity right now?
How to Count the Days in a Purchase Contract
You count the days in a purchase contract starting with zero for date of acceptance.
Do you know how to count the days in a a purchase contract? Well, you’ve come to the right place to find out. A performance issue came up this morning regarding the escrow timeline we use in California and how to count the days in a purchase contract for performance and contingency release due dates. The questioning agent was a 15-year broker in Sacramento who did not know how to count the days. She had taken a webinar online regarding the revised Residential Purchase Agreement — which is consistently being revised — and did not recall the “change.” I assured her that many real estate agents in Sacramento do not know how to count the days in a purchase contract. She is not alone, even though she works alone.
I tell you, if I ran a one-person brokerage company, which I do not, I would probably be networking like no tomorrow, attending every single S.A.R. meeting, hanging out with real estate lawyers, buying Starbucks gift cards to give away at closings; it’s tough to stay on top of what’s going on when you don’t have a designated broker doing that on your behalf. There are only so many hours in the day . . . but the secrets to my success are my alignment with the largest independently owned brokerage in Sacramento, Lyon Real Estate, and to hire a transaction coordinator who takes care of that stuff for me.
You don’t have to be an expert in everything if you surround yourself with experts.
Sure, I pay so much in TC fees every year that a person could probably live quite well on just the TC fees that my business alone generates. Some agents try to save those fees by doing all the paperwork themselves, and it takes so much time out of your day that you don’t have time to work on new business or monitor your own escrows. Penny wise and pound foolish in my book but to each their own . . ..
However, dull as it may seem to some, I do read the Residential Purchase Agreement. It’s like Yoda! It holds all of the answers to life’s secrets in Sacramento real estate. And, if you’re hung in here thus far, below is the answer about how to count the days.
How to Count the Days for Purchase Contract Performance Issues in California
The way you count the days in a purchase contract for contingency due dates is to first review paragraph 30, Item F, of the Residential Purchase Agreement. “Days” means calendar days. However, after acceptance, the last Day for performance of any act required by this Agreement (including close of escrow) shall not include any Saturday, Sunday, or legal holiday and shall instead be the next Day.
This means if you’re looking for the date to release the home inspections contingency, which by default is 17 days after offer acceptance, you would first count the first day, which is the day after contract acceptance, not the date of acceptance itself. If the final date falls on Saturday, that final date rolls to Monday. If Monday is a holiday, that final date rolls to Tuesday. I hope you have learned something new today about how to count the days for purchase contract performances.
If you’re looking for a top producer Sacramento Realtor, please call Elizabeth Weintraub at 916.233.6759.
The Amazing Story of a Sacramento Real Estate Miracle
A Sacramento real estate miracle does not happen every day.
No Sacramento Realtor expects her client to call, late on Sunday no less, just as The Oscars are starting, to excitedly announce he has written an offer on her listing with another agent. Yet, stranger things have happened in Sacramento real estate. Things that can make clients believe this is the way they always occur, and anybody can do it. When my client first uttered those words last night, I thought he was joking. We closed escrow in 2013, but I recall his transaction like it was yesterday, even though I’ve sold hundreds of homes since but few are a Sacramento real estate miracle.
This guy was originally a referral to me by another agent. He claimed to have overpaid for a home he owned in north Sacramento, which he needed to sell, and yes, it wasn’t worth what he owed. He also wanted to buy a home in Elk Grove during a super-heated real estate market. Selling and buying concurrently is a delicate balance, but even more so in a hot market. That scenario typically requires careful planning, including contingent offers. I took him on as a client as a favor to the referring agent, and because he needed a miracle. Fortunately, I can perform miracles.
I sold his home in north Sacramento for a lot more than it would likely appraise at to a cash buyer from San Francisco. That buyer’s agent did not know the neighborhood. Negotiated a 6-month rent back at less-than-market rent for him, so my client did not have to move. At the same time, I helped him buy my short sale listing in Elk Grove through my team member. The sellers received a number of offers for this short sale but they decided to take my team member’s offer for this client because they believed, even though it was contingent upon selling his home, that I would sell it. They had faith in my abilities. Some other agent, maybe not, but I perform. I can do a Sacramento real estate miracle.
Ordinarily, you cannot submit a contingent offer for a short sale to the bank because the bank will say come back when the home is sold. But I calculated by the time the bank raised that particular objection, I would have sold his home. And that’s what happened. Basically, this was a guy who was underwater, and I moved him from north Sacramento into a four-bedroom, two-story home in Elk Grove. All the stars aligned. It was a Sacramento real estate miracle.
You can imagine my shock when this guy said he had written an offer through another agent on one of my listings. The agent is his buddy, a long-term friend, says he, the guy who had initially sold him the home in north Sacramento. Then he apologized, said he was sorry. Well, that makes two of us. Of course, I immediately realized that he did not write an offer for any of my listings. I’m not sure which home he is trying to buy, but it’s not one of my listings, and he confused me with some other top Sacramento agent. Not only that, I checked MLS and his home was not on the market, it is not for sale, so he is not buying anything. Sellers generally do not accept offers from contingent buyers if that buyer’s home is not for sale.
I don’t see a Sacramento real estate miracle happening here.
I am very successful with selling and buying a home at the same time, in part because other listing agents in Sacramento know I will perform as well. They know my reputation. If you need to both sell a home and buy a home, call Elizabeth Weintraub at 916.233.6759.
The Upside When FHA Buyers Cancel the Escrow
FHA buyers who cancel escrow pave the way for the next FHA buyer.
It’s doubtful that most potential home buyers start out the home buying process by thinking they will become one of those freaked out FHA buyers who might cancel the escrow, but it can happen even in markets of tight inventory more often than you would imagine. There are many reasons, none particularly substantial from an experienced listing agent’s point of view. The reasons tend to range the gamut, from unsophisticated to twisted to incorrect analyzations, but whatever the reasons the decision is right for them. Buyer’s agents do their best to manage these events; however, they are not always successful.
You can’t change the mindset of stubbornness in some people. It’s a fine walk for buyer’s agents. On the one hand, they may instinctively realize the buyer is unreasonable but, if they agree, they lose the buyer. Sometimes they are afraid to point out: No, the seller will not rip off the two-year-old brown roof and replace it with your favorite color of black. In that instance, the buyer would probably feel alienated and jump ship. They often feel there is not enough real estate business to allow them the luxury of choosing their buyers, so they stick with whomever they get.
The thing is you can’t blame the buyer’s agents when FHA buyers cancel the escrow. Their agents are doing the best they can. You also really can’t blame the buyers, especially when they are first-time home buyers. It probably hasn’t sunk in that all homes have defects, nor that they might not buy a home now, especially if they try to force the seller to meet demands the next buyer won’t make. Or, that it could take them another year to find a home. We have such reduced inventory in the Sacramento area, so little for sale, and almost every cute home will receive more than one offer for it. With every rejected contract, though, they learn more about the market in Sacramento and what it will take to buy a home.
Meanwhile, back at the ranch, the sellers might be wary that the next buyer will cancel the escrow. But that is unlikely. The odds are most buyers who go into escrow manage to close escrow. Sometimes, sellers want to take an offer from a conventional buyer over that from an FHA buyer — OK, most of the time, they do. But in a situation where it was an FHA buyer who elected to cancel the escrow, the seller is actually in luck. Because FHA appraisals are assigned a case number, and when the home immediately resells to another FHA buyer, that same case number will be pulled.
I sold a home in Natomas last year this way. We did not want a conventional offer but accepted FHA for that reason. Agents could not understand, what? No conventional offers?
An FHA buyer who cancels escrow means there are no appraisal concerns for the next FHA buyer. The seller simply lost a couple of weeks of marketing time, but there are dozens of excited buyers right around the corner who would love to buy that home this spring. All the reports have been completed, too, so the seller is able to supply full disclosure prior to an offer. When an FHA buyer cancels the escrow, it’s a slight setback but odds are the next buyer will be stronger, better informed and more deserving in the seller’s eyes, especially when there are no concerns of a low appraisal.
Better yet, the market has gone up. If you’re thinking about selling a home in the Sacramento area, call Elizabeth Weintraub, 916.233.6759. Put 40 years of experience to work for you.
