Email ElizabethIs Your Sacramento Home Listing Under Priced?
You’ve got to love this crazy seller’s market in Sacramento right now, even if you’re not a Sacramento real estate agent who sells a lot of listings like me. It challenges an agent to be her best each and every single day. Sometimes, being your best involves biting your tongue a little bit, and other times it means providing lengthy explanations to your clients so they thoroughly understand the marketplace. In my experience, an informed seller is a happy seller.
A buyer’s agent in West Sacramento told one of my sellers yesterday that her buyer would have paid almost $150,000 over list price for her home that went into escrow last week. The agent claimed the home was deliberately under priced. First, the home was in pending status, so why the agent was over there talking to the seller is beyond me. Second, it violates the Code of Ethics to discuss pricing with a seller when that seller is represented by another agent. But those are minor irritations when looking at the big picture. The big picture is that statement is a big, fat lie. Oh, man, no wonder people are confused.
This seller’s home would not have sold for more than it sold. It was not under priced. Not in a seller’s market. It’s literally impossible to sell an under-priced home in a seller’s market for less than market value. That’s because no matter how much a seller wants and asks to get, the market will dictate. Buyers are not stupid. OK, maybe some of them are a little undereducated about comparable sales and market movement, but buyers will pay about what a home is worth. Especially when facing a multiple-offer situation.
If a home was worth a hundred thousand dollars more, don’t you think a buyer somewhere, anywhere, would have offered a whole lot more for that home? Yes, they would, because that’s how multiple offers work. When buyers discover a seller has received 5, 10, or 20 offers, buyers tend to put their best offer forward. Buyers who can’t think of any other way to make their offer more attractive to a seller will tend to offer a higher sales price.
Aside from of all that, homes need to appraise at the purchase price, what an appraiser calls “at value,” if the buyer is obtaining financing. It’s pretty darn difficult to pull an appraisal out of thin air these days. A home is worth the price at which others around it of similar square footage sell. There is no magical fairy about to tap her wand and dump hundreds of thousands of dollars on a seller’s doorstep just because a buyer’s agent wishes it.
Do You Have to Tell a Sacramento Real Estate Agent She’s Not Hired?
This Sacramento real estate agent focuses on her own business. I don’t spend time worrying about my competitors in Sacramento (i.e. other real estate agents) because they’re gonna do whatever they’re gonna do, and whatever that may be doesn’t really concern me. So, sometimes, it’s a bit astonishing if a seller tells me that I have a won a competing situation in which I did not know I was actively competing. It’s not really any of my business if a seller is talking to other real estate agents before they hire me, just as long as the seller hires me. I usually don’t even ask.
When a seller calls to discuss selling her home or wants me to pop by for an estimate of value, I presume the seller is interested in selling her home. Hey, guess what? I’m in the business of selling homes. How lucky is that? I go over, help sellers figure out what price to list at, and then I list the home for sale, bring an offer, and I sell it. Last month I had a very upset agent call and ask why I listed a home she had worked on for half a year. Well, first, the seller didn’t tell me anything about that and, second, that’s what I do for a living. Maybe the seller thought it was OK to call a bunch of agents and pick the agent’s brains or that no agent would want to list the seller’s home, but that would mean the guy was insane.
If a seller calls this real estate agent and is planning to sell, it’s my job to do it. When one of my sellers from last week called to say she was ready for me to put her home on the market, she mentioned that she had specifically chosen me among several other agents in Sacramento County and Placer County. She wanted to know what she should say to the agents she did not hire. How should she break the news to them that she hired a different Sacramento real estate agent or should she break the news at all?
Yes, I believe so. I let her know that the professional way for an agent to respond when informed that the seller selected somebody else is for the agent to say, “Thank you for telling me; you have chosen a good agent.” Because that’s what I would say if the tables were reversed. Doesn’t mean I would be happy about it, but I’d accept it because what else can you do? Being in sales means sometimes you’re rejected. Sellers have all kinds of reasons why they choose an agent.
Should You Do a Loan Modification or a Sacramento Short Sale?
Many underwater sellers in Sacramento, by 2013, have most likely tried to do a loan modification or have successfully closed on a short sale. I suspect most of the extreme financial hardships have been resolved and the strategic short sales have been executed or denied by this late date, because many homes have been underwater in Sacramento since 2005-2006. That was the first wave. The next big decline happened in 2008.
Five to 9 years is a long time to struggle with an underwater home. Because of today’s marketplace in Sacramento, some of the borderline underwater homes are turning into equity sales. However, if your home value has fallen by 50% or more, I don’t see any hope for you. Can’t sugar coat this. You won’t regain that equity in my lifetime. There are basically 3 ways out and with few exceptions, only the short sale is the permanent solution.
You either do a HARP refinance (if your loan is Fannie Mae or Freddie Mac) a loan modification or a short sale. If you do a loan modification or a refinance (with the refinance really being a loan mod in disguise), the only thing that really makes sense is if the lender will reduce your principal balance, erase a good chunk of it. Because if not, you’re simply reaffirming a humongous debt that you’ll never ever repay unless you live in that house until you die. And even then, you’ll pay twice as much as you needed to pay. Most banks will NOT reduce a principal balance.
You might wonder why would banks give you a HARP refinance or a loan modification if it wasn’t a good deal for you? Because they don’t give a crap and they want to stop their own bleeding. Banks don’t really care about you. They care about their stockholders and whether the government will continue to sue them, and all sorts of others things, but not you.
You also can’t pursue a loan modification when you’re trying to do a short sale. I had an investor client start out to do an FHA short sale about 6 months ago. We were getting him preapproved for the ATP before going on the market. Mid-stream, ?he decided he wanted to do a full-blown loan modification, so we had to drop the short sale. Not only that, but he was advised not to do the loan modification because he did not live in the property, and FHA will not do a loan modification for a homeowner who does not reside in the home. I sent the homeowner the HUD guidelines, which clearly stated such, but he wanted a miracle and was hoping for something magical to happen. I understand that homeowners are confused and directionless at times.
His loan modification was denied, of course. But getting that denial did make it easier to get him the Approval to Participate in an FHA short sale. I am working with several other sellers who were granted loan modifications and are now waking up to the fact that they will never get out from being underwater. They will always owe all of that money! And some of them no longer can afford to pay the minimum or reduced payments under the loan modification.
The Rip Van Winkle loan modifiers in Sacramento are waking up. That loan modification is not a very good deal for you, is it?
If you’ve got a loan modification that is cause for concern and you want to dump that home so you can buy the same type of home again in two years and be done with this mess, call me. I can put an end to this suffering. I’ve been doing Sacramento short sales since 2006 and have closed hundreds. Last year, I sold $32 million. Call Elizabeth Weintraub at 916.233.6759.
The Guy Behind This Sacramento Real Estate Agent
People often ask me in amazement how I happen to have a life while being a successful Sacramento real estate agent. They want to know how I balance things because in this nutty world of real estate, sometimes, something’s gotta give. We real estate agents work wild hours trying to close business. Yet, those who know me, know I don’t want to give up anything that is important.
The first way I deal with the amount of business I create and close is to be organized. I’m pretty good at creating systems, methods and processes, plus I rarely vary or make exceptions. My priority is to keep my clients happy. I was thinking about this yesterday as I was getting ready to leap into my day and keep appointments, plus list two new homes. I listed a home in Antelope and another in Bridgeway Lakes in West Sacramento.
Yup, I concluded that a Sacramento real estate agent, no matter who she is or how much business she has, still puts on her deodorant one armpit at a time. I was standing in front of the mirror wrapped in a towel, looking at my deodorant when the thought crossed my mind that it’s getting low. I could begin to see the applicator below the white powder. It was then that it hit me:
I never have to worry about deodorant.
I don’t have to be concerned that I might run out because there will be a new applicator under the sink. I don’t have to look for it. It will simply appear. I do not have to go to the grocery store and stand there in front of the bazillion different types of deodorant to try to find my brand. I don’t even know if I have a brand, to tell you the truth, or what color packaging I would search for. I do have specific requirements in deodorant. You know, I want the antiperspirant qualities so I don’t drip all over my clients when signing documents. I want the deodorant but I don’t want a scent that annoys people, so I prefer unscented. I also don’t want to leave white powdery residue all over my clothes when I pull on a shirt over my head.
I am spared having to stand in the aisle and stare at these products. None of those thoughts ever enter my head. My husband knows what I want, and he gets it for me. I don’t know what a carton of eggs cost. Is a half gallon of milk $2.00 or $5.00? I don’t know. I would be a lousy contestant on the Price is Right. I don’t plan my meals or shop for my groceries or cook any meals apart from popping something into the microwave.
I don’t mow the lawn anymore or clean my house. I don’t do laundry or hand-wash any garments. When one of our cats gets sick, my husband takes the furball to the vet. Behind every successful real estate agent is a support system. Nobody climbs that mountain by herself.
My husband, Adam, has been doing freelance writing over the past few years, but that may all change soon. He has more than 25 years experience as a newspaper journalist and editor and, like many others in Sacramento, he’s looking for employment. He might get hired at U.C. Davis or at the State Capitol. Or, he might continue to do freelance writing for various publications, hard to say. But whatever path he choses, I know that he will continue to be my rock. I am so lucky and grateful that he is in my life. You want to know how a Sacramento real estate agent can be so successful? You should look at the man behind the agent.
Should a Sacramento Short Sale Agent Get Paid?
I received an obscure email yesterday from a person who was very upset because the writer realized a Sacramento short sale agent gets paid to do a short sale and, in his words, the seller gets nothing. At first, I could not believe my eyes, but as the words on the page popped out at me, I understood it was simply the frustration and anger of the person writing, and logic didn’t enter into it.
Because if pure logic entered into it, the writer would be upset with himself. He’s the one who, for better or worse, is saddled with an underwater home that he could no longer afford. Maybe it was bad timing, which is nobody’s fault, or maybe the person lost their job and can’t find another, which is also nobody’s fault. Or, maybe the person knew from the beginning the dangerous waters, hard to say, and it doesn’t really matter. What matters is where one is with the property now and what one intends to do about it. If a person doesn’t want to keep an underwater home, this homeowner faces two basic choices: short sale or foreclosure.
A Sacramento short sale agent really wants to help. It’s far easier to sell a home that is not a short sale, believe me.
For many homeowners, the short sale is the better solution:
- A short sale removes personal liability.
- Gives the sellers a clean break.
- Transfers ownership in a dignified manner.
- Relieves a seller of any further responsibility for the property.
- Provides a closure.
And yes, an agent who sells the home and negotiates a successful short sale earns a commission. All of the fees — to the listing and selling brokers, the listing agents, the selling agents, and the costs of sale — are paid from the proceeds of sale; there is no upfront or out-of-pocket expense to the seller.
Try hiring a lawyer to give legal advice for free. They won’t do it. Well, they might if you offer to buy a martini — dry, with a splash of vermouth and a couple of jalapeno-stuffed olives. However, agents don’t sell homes for free, either. A Sacramento short sale agent sells a home on a contingent basis. When finally the home is sold and the seller receives short sale approval, the agent gets paid for services upon closing. Sellers are not paying that agent in advance or writing a check.
Moreover, simply because the short sale agent is receiving a commission doesn’t mean a seller is getting the short end of the stick. If a seller wants to see the short end of the stick, stand back and let the home go to foreclosure. Don’t bother trying to buy another home in 2 years after a foreclosure, because it won’t happen. Every time a seller applies for credit for the next 7 years after a foreclosure, the seller will need to disclose the foreclosure and the credit will most likely be denied.
If a homeowner wants to stick it to the man, do a short sale. If a seller wants to do the bank a favor, then by all means, let the bank seize the home in a foreclosure. Sellers are very angry with the way some employees at short sale banks talk down to them and treat them. You wouldn’t believe some of the stories I hear from sellers. I bet most short sale agents and support staff who are involved with distressed sellers feel their pain; it’s hard not to.
However, to get angry with an agent because the agent is getting paid to perform a service is like getting mad that you get a paycheck when you go to work.
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