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Why Did the Seller Reject an Offer for That Home?
Why the seller rejected an offer to buy a home is really not all that important but it doesn’t mean a buyer might not want to know. Moreover, it might be the buyer’s agent who is more curious about why than the buyer. In my earlier years of real estate, like back when Jimmy Carter was in office, I would often feel like I was helping a buyer’s agent by explaining how the buyer could do better next time, but over the years I’ve come to conclude that trying to help was about the dumbest thing I could do. It’s not my place to try to help. I’m just the listing agent.
First, it doesn’t matter why the offer was rejected, the fact is it was. It didn’t meet some sort of criteria. There could be a bazillion reasons why an offer could be rejected but after the seller has accepted another offer, there is nothing the rejected buyer can do but wait for that buyer to cancel. If the seller is so inclined, the seller could agree to sign a backup offer with the buyer but many sellers dislike backup offers. They often prefer to retain the freedom to respond to fluctuations of the real estate market in the event prices later rise.
Second, short of discrimination / violating Fair Housing Laws, the seller can reject an offer for just about any reason. Sometimes it’s a toss of the dice.
Maybe you could look at it like a point system. Offers need to meet certain points. There is price, of course, terms of agreement, length of escrow, type of loan, possession dates, lender reputations, buyer’s agent reputations, amount of earnest money deposit, even to how the offer is written — whether error free, and each carries weight. When I try to help a seller weigh an offer against others, we add up the positives and look at the negatives. A negative would be a possible bad situation or red flag that could prevent the escrow from closing.
The final choice is always the seller’s. Anything I were to disclose to a buyer’s agent about why their buyer’s offer did not measure up would be subjective on my part and could open my seller to a potential lawsuit, so I don’t go there. My lips are zipped. Yeah, I might know what the seller told me as to why your offer was rejected, but unless I am representing a buyer under those circumstances, which I am not, those reasons will never pass through my lips.
Why the seller elected to reject an offer is not the buyer’s business.
Call Elizabeth Weintraub, Broker #00697006, at 916.233.6759.
Sold Off Market By Your Carmichael Real Estate Agent: 5324 Mustang Way
5324 Mustang Way, Carmichael, CA 95608 sold by your Carmichael Real Estate Agent Elizabeth Weintraub
One of the services I offer my sellers of homes in Carmichael and other communities throughout Sacramento is my tips for fixing up the home prior to sale. I make sure the types of improvements or repairs I suggest are things that will return 100% or more, because otherwise they don’t make financial sense. The things I suggest are often dependent on not only market conditions such as whether it’s a hot seller’s market or a buyer’s market, but also it’s based on the condition of the home.
This particular home closed escrow with your Carmichael real estate agent representing the seller. Another Lyon Real Estate associate who worked at a different office represented the buyer. But that’s not how it started out. It started out with a few showings, and then the seller had a personal reason for wanting to stop the showings for a few weeks. I immediately put the listing into temporary off market status and left it there, waiting to hear from the seller.
They had made a few repairs such as pulling the smelly dog carpeting in the entertainment areas and replacing it with engineered hardwood. I had them change out old jangly ceiling fans with more modern fixtures. We painted a boldly colored wall with a more neutral tone, fixed a few holes. However, the home was still in its original condition. There were drawbacks such as a remote bedroom in the garage, a funky kitchen and a weird layout. The upside was the huge lot, RV access, the pool, and location. It had potential and was very much livable.
When the home first came on the market, I had received a call from buyers who seemed very interested but for some reason, I don’t recall why, could not view the home. They called me when it went into TOM status. Turned out they had a real estate agent, so I talked to their agent and threw out the idea of writing an offer subject to inspection. I am required to present all offers to the seller. Just because I’m not marketing the home and it’s off market doesn’t mean she could not send us an offer.
While that agent was working on an offer, all of a sudden, out of the blue another agent called your Carmichael real estate agent, inquiring about the status of this off-market listing. I told her another agent was writing an offer subject to inspection and suggested she do the same. Whammo, two offers on a home that was not on the market. Our first buyer went into escrow. The second buyers, the guys who had called me, were furious. But, hey, go into backup, I suggested. Write a backup offer. Be in official backup.
Sure enough, the first set of buyers toured the home and decided, for all the reasons I already pointed out, it was not suitable for them, and they felt the home required too much work. That was fine. Because the backup buyers moved into first position and they closed escrow a few days ago. And this is how your Carmichael real estate agent came to sell a house that wasn’t on the market. This home at 5324 Mustang Way off of Winding Way closed at list price of $444,000. We capped the pest work at $3,000 and the VA buyer absorbed all other costs for repairs and pest.
Two Tips to Buying a Home in a Low Inventory Market Like Sacramento
- If you cannot find a home to buy in Sacramento, one thing your agent can do is call listing agents on the off-market listings. Sellers might be happy not to have to deal with a bunch of traffic later and will take a bird in the hand.
- What you can also do is put in a backup offer if you lose a multiple-offer bidding war. You have a very good chance, maybe 50%, of moving into first place. It is not unusual for first-time buyers to cancel.
If you’d like more tips, call Elizabeth Weintraub at 916.233.6759. Put my 40+ years of experience to work for you.
One Way to Decrease Chance of Escrow Cancellation
Dealing with an escrow cancellation is less painful when you have a backup buyer.
You know, I can write about trying to avoid an annoying escrow cancellation until I am blue in the face, and it doesn’t change anything in Sacramento real estate. Part of the problem is we’ve got such a huge number of Realtors in Sacramento who do very little business, so they don’t always fully counsel their buyers. When I tell consumers that about 90% of the agents sell 3 or 4 homes a year, they are flabbergasted. How effective can an agent be when she closes so few sales?
I’m not knocking agents who don’t want to be top producers, btw. Not everybody chases the business nor finds challenges exciting and rewarding. Lots of real estate agents lead normal lives. But not me. And I have been trying to figure out how to avoid an escrow cancellation ever since they started happening in such huge proportions. When I have to resell what seems like half of my listings a second time, there is something seriously wrong.
Our limited inventory drives buyers and their agents nuts, I get it. They don’t like multiple offers and feel like they will always lose out, even when that is silly. There are tons of ways to beat that issue and win. Sometimes buyers get fed up so they write many offers on many homes when they can’t buy them all. Agents who encourage this crap should be strung up by their toes, dipped in honey and left to rot in a tree of wild bees.
Now when my sellers and I review offers, we’re looking for the offer we want to close, and we’re also looking for the buyer we would like to place in a backup offer. Rather than sell the home twice after the first offer sends an escrow cancellation, we’re taking out an insurance policy. I’ve been filling out the back-up offer addendum along with a counter and sending it to the buyer we would like to sell to if it wasn’t for the somewhat better offer we accepted.
I make it easy for the buyer to say OK. Sure, I’ll go into backup.
Sometimes the differences between those two offers are really slight. They could even be the same sales price. Why just the other day, in that very situation, the original set of buyers delivered an escrow cancellation the first day into escrow. That listing never went back on the market. The backup buyers moved into primary position and replaced the first buyers.
If you’re hoping to sell a home in Sacramento, call Elizabeth Weintraub at 916.233.6759. Why not put 40 years of experience to work for you? I’m always working to find ways to improve my client’s experiences.
Showing a Sacramento Pending Sale and the Trouble With a Chase Sapphire Card
If your home in Sacramento is a pending sale, why would you let another buyer into your house to see it? It’s not like that buyer can purchase it. It’s inconvenient to you, probably, to show. You are most likely ready to close in another couple of weeks, why the rush now to show your home? Your existing buyer is not about to cancel the transaction, and her inspection contingencies are removed. Then, why is showing your home while pending a wise move on your part?
Because you know where I’m going with this. I would not have brought it up if I didn’t want you to consider showing your home again.
Short and sweet: it is insurance for you. A back-up plan. You should always try to have a Plan B because Plan A can go haywire for the silliest of reasons. Many of those reasons have to do with the buyer’s lender and how that loan is processed. The lender might have missed something obvious from the start. Or, it’s possible the underwriter uncovered some other situation that just happened. Much can go wrong in underwriting.
If a buyer is interested in writing a back-up offer, it’s to your advantage to let the buyer do it. It’s your ace in the hole in the event the first buyer cannot close escrow.
It’s Murphy’s Law that says if things can get screwed up, they probably will.
In a related issue, a while back Chase Bank messed up my shopping at Nordstrom. I used my Chase Sapphire card, and it was rejected, even though I regularly shop at Nordstrom and often spend insanely. I pay in full monthly. There is no reason for a fraud alert on my card. After I called the super-duper secret private customer service number reserved solely for my benefit, I was passed over to the fraud department anyway and drilled like a criminal.
After complaining to Chase, they verified my purchase. At the next counter in Nordstrom, same thing happened again. Chase froze my account, and I had to call customer service a second time. WTH?
I asked Chase: This will not happen at the next counter, right? I will NOT have to call you a third time today, will I? You realize now that I am shopping at Nordstrom this afternoon and you will authorize my charges, correct-o?
Yes ma’am.
Ha. Fat chance.
Tried to ring up a bag in the third department. Fraud alert. I called a third time. There is no removing myself from this spiral until I cancel my Chase Sapphire. This is crystal clear. Either the JPMorgan Chase employees are idiots or its system is flawed. Neither is good.
I deal with these irritating matters day-in and day-out in normal life, so do you, probably. And you don’t need more problems in the middle of selling your home. If you can get a backup offer, it’s to your benefit.
Buying a Sacramento Home Parked in Shadow Inventory
When inventory is low and the quality of available homes for sale in Sacramento is spotty, it might seem like there are no homes to buy, but that’s because nobody is looking at the shadow inventory. Shadow inventory can be defined as a lot of things — it can be homes that have been foreclosed upon and not yet on the market, or it can pertain to the pending sales, active release, short contingent and temporarily off the market listings, among other select status modifiers.
You might find gold in those listings.
I’ve noticed that some real estate agents are diligently digging through MLS to try to uncover shadow inventory for their buyers. Buyers can’t find these listings on their own, for the most part. Oh, they can find homes that closed escrow a few months ago on websites like Trulia and Zillow, but much of that stuff is dated. Even our own MLS, MetroList, hides the status of some listings down at the bottom on the right-hand side, so buyers get all excited and think homes are available to buy when they are actually under contract.
This is when it pays to get in touch the listing agent to find out whether the agent and her seller might welcome a backup offer. The thing about a backup offer is it guarantees the buyer that nobody else can step in to snatch the home should the existing pending sale blowup. If the existing buyer cancels, a backup offer, properly prepared, would put the second buyer into first position, effectively locking out the competition.
You might wonder how many pending sales blow up? It’s hard to pinpoint exactly but it’s not unusual for some listings to sell 3, 4 or 5 times before they close. Part of that problem is unscrupulous buyers writing more than one offer when they can’t afford to buy two homes. Part is due to tightened lending restrictions. Whatever the problem might be in an existing transaction, having a backup offer can give the seller peace of mind and it can also be a bonanza for a buyer who missed out on making an offer for that home.
If a buyer has not lifted contingencies and the transaction is still influx, it might be a good idea to check out a few pending sales to see if there is an opportunity lurking in the shadow inventory for you.
