Email ElizabethHow to Profit from a 50% Pending Home Sales Fallout in Sacramento
It pays today to be a home buyer on a backup offer in Sacramento since we seem to be experiencing such a high cancellation rate on escrows; in some cases up to 50% of the pending sales are falling out. I say this not to be an alarmist but to point out what other real estate experts are too frightened to bring up because they are worried this kind of data would harm our fragile sales market. Every real estate professional, just about, knows this is happening in the Sacramento real estate market, if they’re doing any kind of business. They’re just not talking about it.
That’s because we have to be positive and spread only good news about Sacramento real estate. Oh, spittooey. You’ll read in other news media that sales are UP. What media is not telling you is real estate sales naturally increase in the spring. Inventory is low, which is true, inventory is low as compared to previous years, but it doesn’t matter because there aren’t enough buyers for it. Home buyers today typically lust over only the best home on the block and the rest are ignored.
On top of this, buyer’s agents think they are working with buyers because buyers tell the agents they are buyers. They might even pop up with a pre-approval letter in possession. But it doesn’t mean they are a buyer, because a buyer closes escrow and eventually ends up with a home.
It’s not the end of the world if an escrow cancels, because it will generally turnaround and go back into escrow again under a second purchase contract within a relatively short period of time, but that’s why you want to be a backup buyer, if you can. Don’t think you can’t write a contingent offer, either, if you have a home to sell, because sellers are accepting contingent to sell offers from buyers.
For other listing agents, my advice is don’t put that listing into pending status until the buyer has deposited funds into escrow, which should occur within the 3 days MLS gives us to change the listing status. Because nobody wants to deal with the unfair stigmatization of a back-on-market listing because some doofus buyer on a whim canceled the escrow.
For buyer’s agents, don’t write multiple offers when your buyer can’t afford to buy each of those homes. Not only is your reputation as a Sacramento real estate agent at stake, but those types of “buyers” can easily morph into a vanishing act after both offers are accepted. If your buyers really want a pending home, consider writing a backup offer.
For buyers, get over the fact that homes might cost $100,000 more today than they did 3 years ago. Those days are gone. But prices are still low as compared to the prices pre-market crash. Don’t wait for interest rates to go up and slowly rising prices to price you out of the Sacramento real estate market all together. Get in while the getting is good, and for heaven’s sakes, stay there.
The Sacramento Bee Masters Club Edition Arrives
The Sacramento Bee Masters Club edition came out today, but I know this primarily because I belong to that old fart’s group of individuals who still pick up the newspaper off the front porch. Our Sac Bee home subscriber numbers are dwindling, and it’s kind of sad to me to see an old institution like our daily newspaper in print slowly lose its life.
Crap, it was sad for me to see Ladies’ Home Journal bite the dust for home subscribers, and I would never read that magazine even if I was bored to tears at my doctor’s office reception, sitting there without cellphone reception. Watching time-honored institutions die is like watching little bits of my flesh get chipped away by the hammer and chisel of technology.
Print has its purpose. One of the problems with looking at the Sacramento Bee Masters Club edition online instead of holding the paper in your hands is you can’t draw devil horns on those grinning agents with the eye teeth exposed. You can’t put a mustache on that blonde grandma baring cleavage or draw horned-rimmed glasses on Mr. Surfer Dude. Who wants to look at photographs of a bunch of real estate agents in Sacramento online? I mean, outside of the ad department of the Sacramento Bee. Which didn’t do such a hot job with my online photo which, for some reason, is different from the print version.
All of the Sacramento region print publications have this racket going on with real estate agents and Masters Club. Let’s see, they ponder, who can we hit up for advertising dollars and make all of them pay for a wonderful opportunity? Because if an agent is in Masters Club and her photo isn’t there, the public will think she is not a member, so we’ve got ’em all by the balls, um, lady parts. You don’t get your photograph in any Masters Club edition of any newspaper or magazine unless you pay for that privilege. This is not a charity nor public service.
The Sacramento Bee “supports” Masters Club because agents pay the Sacramento Bee to do so.
Who’s got the money? It’s always who’s got the money. The people with the money are Sacramento real estate agents who sell at least 8 homes a year at $3.5 mil, say the advertising departments, and so they run after real estate agents and thrust their grubby little paws into agent pockets. I pay for most publications except for one that nobody else reads. Soon, though, this nonsense can stop. When the newspapers stop printing all together and the magazines shrivel up and die.
And that will be a time of sorrow.
So, even though I yipe about it, I pay for Masters Club print editions year after year.
Every Sale in Sacramento Real Estate is a Custom Sale
Selling Sacramento real estate is not a slam dunk like some in the public might perceive. I know there are sellers who believe all we agents have to do is stick a sign in the yard and the buyers will come, which is why some run out to get a real estate license. But after passing the exam, forking out several grand to get started and staring at a phone that doesn’t ring, new licensees soon figure out there is a lot more to it, and many fail.
Sellers and buyers are as different as night a day. The type of communication that works well for one client would make another want to shoot her agent in the head. On top of this, each home is different — yes, even the tract homes in Natomas and Elk Grove, which some people believe all look the same yet are not identical. There are small nuances that can produce variances in a sales price, and some not-so-subtle, including location.
I’ve had sellers ask me, what do we do if and when XYZ happens? They want to cross bridges twice when we might not have to cross them at all. What I might suggest in one situation is not the solution I might offer for a similar transaction. That’s because I think about it. I don’t simply react. There are no cookie-cutter solutions in Sacramento real estate. Every single sale is unique. I also surround myself with other professionals who are like-minded and apply a similar holistic approach. It’s not math and science, I can tell you that.
This is why my Sacramento real estate practice cannot be duplicated and, as a result, I am very selective when choosing my clients. My clients get an agent they can’t find elsewhere. A newspaper reporter asked last year where she could find an agent just like me in her part of the country, and I had no answer because I don’t know. You can’t take a form, ask questions, check off boxes and find the right agent. You have to use a combination of your brain and heart.
My goal with sellers is simple: get the home sold at the price the seller expects and close it. It’s an easy focus for me because I don’t let myself get distracted by the circus sideshows. I allow no room for prevarication in my business.
The first three weeks as a new listing on the Sacramento real estate market are crucial, no matter what. I prefer that my listings splash when they come on the market and make everybody at the pool turn their heads. If the home hasn’t sold after 30 days, it doesn’t mean there is something wrong with the price or the listing itself; but I do examine the surrounding market to find an explanation and then adjust for it.
Every listing I take in Sacramento is special. Every listing is custom. Every listing needs a buyer. My job is to find that buyer.
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How to Sell a Home in Sacramento Fast and Close Under 30 Days
A seller who lived a ways north of downtown Sac called last month to say he needed to sell a home in Sacramento fast, because he had just accepted an unexpected job transfer and had to move across country in 30 days. I love challenges and thrive on those types of opportunities. This couple had purchased the home a few years ago as a bank-owned home and were worried about disclosures and condition. They also were located in a small pocket of newer homes, nestled in a subdivision just down the street from what Bob Dylan might call Desolation Row.
As with any potential listing, I point out the positives and I don’t gloss over the negatives with my sellers. Both carry weight with a buyer, and sellers need to look at the sale of their home from the eyes of a buyer because that’s how homes sell. Sometimes sellers are worried about the tiniest things that carry no consequences of sale, and sometimes they overlook the major things that are really a big, big deal. That’s where a veteran Sacramento real estate agent can be a huge help. I share what sellers need to do and what they don’t need to do.
What these guys needed to do was clean up the house and keep it tidy. Mow the lawn. Clean out a few pieces of furniture. No repairs, no fixing anything except one loose cabinet door in the master bath that required a screwdriver to straighten up. Then, cooperate with showings, no matter how crazy it made them for a week.
We discussed the comparable sales, all of which were pretty much brand new homes. Their home was resale, older. Big difference. However, there wasn’t much on the market, either, and they had desirable factors such as four bedrooms and it was a sought-after single story. They priced it at the hottest price point in Sacramento for this type of home, and we let the market dictate.
The market responded favorably. I personally contacted every buyer’s agent after a showing. We received many offers and accepted the offer from the strongest buyer at the strongest price, which wasn’t necessarily the highest price, but it was 5% over list price and in line with the new home sales. We held our breath as I talked with the buyer’s appraiser and whammo, the appraisal came in at the sales price. You couldn’t ask for anything better than this.
Probably the best part was the home sold and closed in fewer than 30 days, even with marketing time. The buyer’s lender was able to quickly perform. The seller signed their escrow documents while packing in the convenience of their own home. As they drove across country through the cornfields of the Midwest, a wire transfer deposited the proceeds of sale into their banking account. The seller texted: “You are the best; we will never forget what you have done for us.” Peace of mind is priceless. But money helps.
When a Sacramento Real Estate Agent’s Reputation is All That Remains
It wasn’t that the buyer’s agent forced me to open Microsoft Word — which takes so much longer than any of my other applications to load, patience, patience, to find the document in which I record decades of unpleasant transaction notes — it was that many real estate professionals may now associate this particular agent’s name with unethical real estate practices. After the day is said and done and the years are over, and all the crazy people have crawled back into their caves, the reputation of a Sacramento real estate agent might be all that lingers.
An agent’s reputation should be fiercely maintained.
Successful agents, for example, are often slid under a microscope to study. Sometimes these agents are unjustly attacked by other real estate agents for stupid reasons, mostly because competitors become jealous. It’s the nasty underbelly of the real estate business and a silent consequence of success. Aspiring agents admire success but it can also be a tug-of-war internally for them. Regardless, we all need to treat each other with respect. As REALTORS, we must adhere to the Code of Ethics.
To be kind, some agents can experience, let’s say, a lapse of better judgment.
For me, I don’t look so much at what other people say when they screw up, I look at what they do. If a buyer’s agent calls me to talk about a client’s offer, spends a long time discussing the buyers’ love affair with the home but fails to mention that the agent has written a second offer for that buyer, well, not only is it considered unethical, but that kind of practice could be against the law. Buyers can’t buy two homes if they can’t afford to buy both. Lawyers can scream this until the cows come home and agents don’t listen.
As what happens in these types of problematic situations is both offers tend to get accepted. At that point, the buyer’s agent had another open window to say, hey, I have something to disclose. But no, the agent’s lips are zipped until the buyer bails on both accepted offers. Ordinarily, a listing agent wouldn’t even know this has happened, but when she discovers it — and the truth often manages to come out — she’s not the only person. Both sets of sellers know, and so do all of their friends. The people at title and escrow know. The other agent whose seller received a cancellation knows. All the people that agent knows know. And so on.
This is how a buyer’s agent’s reputation can turn into mud.
And for what? A pair of buyers who bailed on the buyer’s agent and decided not to even to move to Sacramento after all?
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