Email ElizabethTiming 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.
Real Estate Agent Event at a Treasure Island Winery
Bay Bridge from Treasure Island Vie Winery
How many reasons does a Sacramento real estate agent need to take a quick trip to San Francisco, much less to visit a winery on Treasure Island? I’m betting many readers of this Sacramento real estate blog do not even realize that a) Treasure Island is a drivable exit off the Bay Bridge, and b) Treasure Island features wineries. Because if you’re like me, when you’re driving over the Bay Bridge, you’re keeping your eyes on all of the other bottlenecked vehicles around you, hoping an earthquake doesn’t strike and focused on not getting run off the road into the water.
It was work-related, too, so the trip was a business write off, including the limo service. See, it’s not so bad to drive into the Bay area if you’re relaxing in the back seat of a Lincoln Town Car. My friend and manager of the Lyon Sacramento real estate office, JaCi Wallace, agreed to go with me to Treasure Island yesterday, so we had a few leisurely hours to talk. It was fabulously fun because we chatted non-stop and probably talked off the ears of our poor driver who had to listen to us discuss real estate the whole way there and the whole way back.
JaCi Wallace, Pacita Dimacali, Cynthia Larsen
The main reason for the trip was to meet other Bay area real estate agents and vendors at an ActiveRain Meetup event. These people are agents I know from the ActiveRain website where agents hangout. Unfortunately, we were so busy and enthralled with the event, we — OK, this yo-yo — forgot to take photos until it was just about over.
We sipped wine at the Vie Winery and had an opportunity to meet Bryan Robertson, part owner of the Treasure Island winery and also real estate agent extraordinaire. Bryan hosted this event along with Kathleen Daniels, a broker / owner from San Jose, made sure we had something to eat with all of that wine tasting. Pacita Dimacali, who sells from Alameda to Berkeley, smoothly led the introductions. I had once interviewed Pacita many years ago for my book, The Short Sale Savior, and she told a story about how she received a real estate client who had read that book and called her. Sweetest person you’d ever want to meet.
Elizabeth Weintraub, Antonio Cardenas, Pacita Dimacli
It was over all too soon, and when I looked up, everybody was gone. I was not lying flat on the floor, in case you’re wondering, just standing inside the Vie Winery, mesmerized in a conversation with Antonio Cardenas from San Leandro, ballroom dancer and REALTOR. I had wanted to play Bocce ball with Lottie Kendall, Cynthia Larsen, Ann Wilkins and Melanie Ross, probably a few others whose names I have accidentally omitted, but they had all vanished.
We’re all busy with real estate right now. Which meant back to Sacramento to answer more emails and sell more homes. You can mix work with pleasure in this business. That’s one of the great things about being a Sacramento real estate agent! Great Treasure Island winery, too.
About Selling Homes in Elk Grove
There are some things I know about that I do not care to know such as Simon Cowell got his best friend’s wife pregnant and why Aretha Franklin, the beloved godmother of soul, doesn’t quite trust modern medicine, but there are other things I know that carry significance, especially about Sacramento real estate and selling homes in Elk Grove. Now, having an almost 40-year career in real estate, I can tell you that it’s very common for clients to have a different idea of what an agent should do to market their home than what an agent believes is the best course of action.
That’s OK, because I go with the flow. I want happy clients. I want more referrals coming to this Sacramento real estate agent, and unhappy clients generally don’t give referrals. It is the referrals and 5-star reviews that keep the doors to my business open. When I’m selling homes in Elk Grove, I want those Elk Grove sellers ecstatic!
But yesterday I elected to make an exception. A seller asked if I would put a box of fliers on the post outside of her home in Elk Grove. I could do it but it would be pointless. It was good that I took the time to explain my reasoning because the seller agreed. Here are few reasons why it’s not a very good idea to put out flyers when selling homes in Elk Grove:
- The home in Elk Grove is located on a cul-de-sac off a quiet street so walk-by traffic is unlikely.
- We want potential buyers to call us. That’s why my Elk Grove office phone number is front and center on the gigantic For Sale sign, followed by a rider with my cellphone number, and another rider with the cellphone number for an Elizabeth Weintraub team member.
- Kids often swipe flyers.
- My Virtual Agent system attached to the for sale sign gives potential buyers many opportunities to get information. They don’t even have to call an agent or talk to an agent. By calling an 800#, all data is sent as a virtual tour to their cellphones. They can text a code, just like American Idol, and all data is sent as a virtual tour to their cellphones. Or, they can take a picture of the QR code with their cellphone and all data is sent automatically to their cellphone.
- But probably an unexpected reason is the home will be sold by the time we get out there with a box of flyers.
If you’re thinking about selling a home in Elk Grove, call an experienced Elk Grove agent, Elizabeth Weintraub, at 916 233 6759. The Elizabeth Weintraub Team was just named by Real Trends as one of the top 25 best real estate teams in California.
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