Email ElizabethThe Fate of an Appraiser is Worse Than an Internet Mortgage Lender
A friend promised yesterday: tomorrow will be better. Well, honestly, tomorrow will be different but it won’t necessarily be better because there is always room for stuff to get much worse. And tomorrow is already here. The important thing is to keep a sense of humor about the roller-coaster ride called Sacramento real estate. Because managing real estate transactions as a listing agent involves sometimes jumping into the middle of a tornado, even if it’s not necessarily your job to fix the situation.
One of the biggest problems we’re facing right now is a shortage of appraisers. We are selling about 80% fewer homes than we were 10 years ago but our pool of appraisers has shrunk. A bunch already dropped out. Plus, many appraisers are aging, getting older, near retirement, and I think they’re leaving the appraisal business because of the way the business is moving:
- Being plucked out of an appraisal pool as nothing more than a number and not based on value or experience, and
- Getting their paychecks sliced by at least a third because the appraisal management company needs to get its cut, and
- Now, with all the new regulations, especially collateral underwriting, the same job takes 3 times longer.
Who wants to be an appraiser anymore? Being an appraiser is a sucky job and it’s getting much suckier.
There’s like one appraiser left standing on the face of the earth in all of Sacramento, and nobody can find that guy to do an appraisal for several of my listings which are so far past due for a contingency release it’s insane. Throw into that mix an East Coast internet lender, and I don’t think I have to tell you which company, and we’re lucky if the loan ever closes. There is something to be said for dealing locally and not using an appraisal management company out of Ohio or Pocatello, Idaho, or American Samoa.
When will buyers wake up and realize that no internet lender is going to give them a break or some special deal that a local lender cannot provide? There is nothing magical about getting a mortgage loan unless you end up with a person managing the file who doesn’t pay attention to detail. Doesn’t hit all the marks when the marks should be cleared. Lets things slip through without noticing. It’s all the same bag o’ money and rates can change hourly. Don’t get suckered by slick websites and false promises.
Pick a local mortgage guy you like and trust and stick with that person. You very well might find that your Realtor is recommending a mortgage lender for a reason. That mortgage lender can find you an acceptable rate. You don’t have to hop online to find some stranger who can mess up your transaction ten ways from Sunday in exchange for waving a low interest rate in your face. You can get the best rate available and competent service if you choose a local lender with a strong track record.
But no, buyers go with the fast talker they found online who works several time zones away and is accountable to no one. By the time they figure out they had made the wrong choice, it’s too late. Instead, listen to your buyer’s agent. If the agent is recommending a lender, it’s for all the right reasons.
In Defense of Multiple Offers from Sacramento Home Buyers
The biscuit recipe for Sacramento home buyers that is guaranteed to drive multiple offers in the Sacramento real estate market goes like this: add 2 cups of a highly desirable home in the right location, perfect condition and priced well, toss in a pinch of salt representing all of the other homes for sale in that particular neighborhood (none), stir in 2 teaspoons of pending sales, cut in a stick of low interest rates and blend well with a cup of eager Sacramento home buyers. Drop on to a Sunday open house and bake at 400 degrees for 15 minutes — within 2 hours they’ll be history.
Our Sacramento real estate market reflects low inventory, low interest rates and a high demand from buyers. Sacramento home buyers, who often say things like: I don’t want to be involved in a multiple offer situation. It makes me wonder what they mean. Do they want to buy a home that nobody else wants? Some ugly dog that is overpriced and under-loved? Is that it? Because there are some of those homes for sale in Sacramento, and nobody is trying to buy those homes. The field is wide open for that kind of home. No competition for that stuff.
Don’t they want to be the winning bidder for a home that everybody drooled over but only they were smart enough and lucky enough to win? One thing is for certain when a home buyer goes into contract in these situations: when the time comes to sell that home down the road — maybe not next year, maybe not in 10 years, but eventually when that buyer turns into a seller — that same intense interest from buyers will still exist. The home will hold its appeal. Your hair might start to turn gray by then and your body might run off southbound, but that home will still be alluring, even after the Sacramento real estate market cools.
That extra $5,000 or whatever a multiple-offer might cost, can be the difference between owning a home or not owning a home. Think how less important that will seem 5 years, 10 years from now. Sure, your emotional conscience might be fighting a losing battle by telling you not to pay more than list price, but what if the list price is low to start with? Listen to your logical, rational side. What do the comparable sales reflect? Because remember, the home will most likely still need to appraise. It matters less what the list price is and matters more the value of the home.
And let’s not forget about appreciation. Home prices are on an upward swing right now.
I also wonder if “I don’t want to be involved in multiple offers” means the buyers intend to lowball the sales price and realize they can’t possibly win with that strategy when other buyers are offering more than list price. Of course, if that’s the case, they are not buying a highly desirable home in the Sacramento real estate market this spring.
I’ve heard agents say they think sellers are greedy when multiple offers occur. As though somehow it is the seller’s fault for maintaining such a beautiful home in pristine condition. It’s not the sellers who are driving the marketplace; it’s the buyers. Buyers establish final value. My advice is don’t worry about what everybody else is doing. Focus on yourself. Write your best purchase offer and call it a day. Don’t wander about wondering “what if” . . .
Do Real Estate Agents Make Too Much Money?
Before we get started on the topic of whether real estate agents make too much money, let me be clear that I am not about to tell you how much money I earn as a top producing Sacramento Broker, because how much I earn as a real estate agent is not what this blog about, plus it’s kinda gauche to discuss. I’d like to talk about how those in the 1%, whether it’s all people in the world or just the top agents in any given community, are often looked down upon and intensely disliked simply because they earn more money than somebody else. It’s like everybody gets dumped into one category, being earning more than the person who is upset about it earns.
A retired elderly friend of my mother’s was like this. He used to mail me cartoons cut out of newspapers about denigrating the wealthy, which also included attacks on real estate agents. It was as though he could not be a good defender of the downtrodden, or an effective political activist trying to right wrongs, without slamming those with a net worth higher than his.
Do some real estate agents make too much money? A few, perhaps, you’ve met some of those, but most agents also earn exactly what they are worth. You’d probably be surprised to know that the average salary of a real estate agent in the United States is less than $50,000. Out of that, agents expect to fork out overhead expenses, medical and insurance costs, federal and state taxes, so they’re lucky to end up with half that amount, if that.
When sellers sometimes ask if I will discount my commission, my answer is always the same. I don’t mind the fact they asked, but my answer is no because they are paying for superior service. They are paying for assurance that the million and one mistakes I have made and observed over the past 40 years won’t happen to them. What I have learned and pass down to them has a dollar value. That assurance carries a dollar value. If sellers want a less experienced agent, they can certainly hire that kind of agent for less money.
If they want a full-service agent who is dedicated to focusing on their needs and producing results, then they agree to pay my fee. I will fight tooth and nail for them to protect my client’s financial interests, which means that small bump that I charge over many other agents makes its way back into their pockets at closing. Do real estate agents make too much money? For what I do, I earn what I am worth. Just ask my clients.
A Sacramento Listing Agent Tackles First What Is Wrong With My Listing
When I accept a listing in the Sacramento area — and I sell homes all over the place in Sacramento as far out as Galt, to Yolo County: West Sacramento, Woodland and Davis, including Roseville and Lincoln in Placer County — the very first thought that enters the mind of this Sacramento listing agent is almost always: What is wrong with this listing? What needs to be addressed? In case you’re wondering, my mind works the same way when we receive a purchase offer, and unfortunately there is almost always something wrong with purchase offers as well.
The reason I want to examine the listing so closely is because a buyer will scrutinize the home for sale too. I prefer to handle any objections a buyer may have before they pop up because I know how buyers are. One small drawback, one little defect, one objection, and they tend to latch on to the next house in their buyer’s agent tour. They feel no loyalty whatsoever to the house they’re standing in and looking at. It’s just a house and there is another right around the corner. They aren’t desperately trying to find a way to make the home fit their needs as some sellers believe; au contraire sugar bear, their wants and needs need to fit that particular home.
This is the thing that sellers often do not realize. It’s hard for them to put themselves into the buyer’s shoes, not to mention, let me tell you that not all Jimmy Choo shoes are comfortable, regardless of the price tag. Sellers will say things like, the buyer can always change this, that or the other thing. And no, the buyer won’t. Sellers think buyers will overlook an item because the seller has lived with it for so long and the seller has been able to ignore it, and they absolutely cannot believe it is sticking out like a big sore thumb screaming at buyers to run away.
All agents have different ideas about what these sorts of problems are, and some of the agents are right about them and some are completely wrong. How is a seller to know whom to believe and which agent is off his rocker? Common sense and gut instincts, I guess. Track records speak volumes.
I have more than 40 years of experience in this business, and those years have yielded extraordinary results, a wealth of information. When I am hired as a listing agent, I share all of my suggestions with my clients. Sellers who are shopping for an agent might call in 3 or 5 different agents to look at their home and try to pick everybody’s brain, but it doesn’t really work that way, and agents can tell when sellers are looking for free advice. The agents who provide free advice tend to stay unemployed as sellers pick, pick, pick and then choose the DNA agent.
Any fool can tell a seller her home is beautiful but the true goal is to efficiently tackle the delicate problems with diplomacy. All homes pretty much possess one problem or another. The talented Sacramento listing agent will find a way to either correct that condition or to deflect attention elsewhere.
Perfecting the Art of Selling Luxury Homes in Sacramento
Methods used to sell luxury homes in Sacramento have changed over the past few decades rather dramatically, but the “people aspect” of these transactions remains the same. Agents who aspire to sell luxury listings realize this soon enough. Although we treat all of our clients with compassion and respect, selling a luxury home requires a bit more finesse, shall we say, and the attention to detail is a bit more meticulous.
For starters, not all, but many home sellers of luxury homes prefer to not discuss showings with a buyer’s agent. Their listing agent might handle those types of phone calls and play the role of the intermediary, a buffer between the seller and other agents. Some sellers don’t want their home advertised in MLS, although I personally believe that is a huge mistake because it truly limits the number of potential buyers. Competition brings higher prices. But sometimes privacy concerns win over profit. Not to mention, not only do many gated communities of luxury homes prohibit For Sale signs, sellers don’t want a sign, either.
There is also the marketing, though. Which is handled on a somewhat higher scale. Agents tend to spend more money on marketing for luxury homes because it is possible the home might not immediately sell. It could be reaching a limited market. For example, I read the other day that there are something like 211,000 people in the United States with a net worth exceeding $30 million. That’s actually not very many people.
Although online exposure is vast and reaches cross the International Dateline. Even royalty in Dubai look at homes online. You can’t fool me, I’ve seen iPads in their hands. You think they are reading email, but they’re really drooling over the cliff-to-shoreline waterfall in some celebrity’s backyard in Malibu.
Words play such an important role, as they do in any listing, yet quality photography can supersede. Pictures say a 1,000 words is true. We’ve all seen the blackened photos in MLS and wondered what was going on. I’ll tell you what was going on. The sellers hired their nephew’s youngest son who hit the sheets at 4 AM and hasn’t quite recovered from his night-clubbing, instead of an experienced luxury homes Realtor in Sacramento. Click on this link if you would like to read more about selling luxury homes.
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