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The Worst Ways to Buy a Sacramento Home
Have you ever wondered what are the worst ways to buy a Sacramento home? I swear, there are times when I see flashes of 25 years ago watching buyers in Sacramento hunt for a home to buy. It makes me wonder why they waste the effort. I suppose part of it is due to the low inventory of homes for sale in Sacramento, and those slim pickings can make some buyers feel desperate. The other reason is probably due to the fact that some buyers think they know better than those of us in the industry, which means they probably don’t hold much respect for real estate agents, but some people are like that.
Every so often I will get a phone call from a buyer who starts out by explaining they are not interested in talking to me unless I am the listing agent. That’s code for they hope that by “offering me the opportunity” to work in dual agency (double-end the commission) that I’ll get them a better deal by sacrificing my integrity and ethics. Probably because that’s what they would do, but they don’t realize that I am not them.
Money is not my motivator.
They think that agents will do whatever is necessary to put a deal together because we’re all starving to death or maybe we’re just scumbags, I’m not sure. I refer these callers to my team members to show. But I don’t tell my sellers what I suspect these guys are up to unless I receive an offer, no sense in upsetting them. It does put me on notice, though. And that’s not a very good way to look for a home to buy in Sacramento.
Although maybe the #1 worst way to look for a home to buy is to drive around town calling on For Sale signs. I get a lot of those, and then buyers are ticked off when they find out the home is pending and demand to know why there are no pending signs on the For Sale sign. They don’t realize that all listings are available online these days. Hello, 2014. If they don’t look at an online feed from MLS, they’ll never know whether a listing is pending or not. About half the time the home is pending before the poor sign post company can even pound a post into the ground.
If you’re a buyer in Sacramento trying to buy a home, your best bet is to ask a buyer’s agent to work with you. You’ll get the best representation, the most attention and direct service, and you won’t be driving around calling listing agents to find out the home is already sold. ‘Course, in retrospect, the agents would have to answer their phone.
Why Not Call a Sacramento Listing Agent Before Writing an Offer?
It’s always a good idea for the buyer’s agent to call a Sacramento listing agent to talk about the home a buyer might want to purchase, but so few agents seem to call the listing agent. Some will send text messages but it’s so much better to just dial the darned phone. Especially for me because my phone is not always visible; it’s often on mute and I rely on my Bluetooth. Of course, some Sacramento real estate agents don’t answer the phone, I get it, and it can be very frustrating for a buyer’s agent to try to get a listing agent to respond, but they owe it to the buyer to try.
Because I’ll tell you what happens when they don’t. When they don’t, the Sacramento listing agent and the seller are left to their own devices and interpretation of that buyer, and it might not be pretty. I received a few offers from buyers that arrived out of left field over the weekend, no warning. Some without the proper documentation and some at such low prices the sellers thought the buyers were on crack. I encouraged them to issue a counter offer anyway, and to address all of the issues in the counter.
Low and behold, the buyers accepted that counter offer. So, you never know. One of the crucial elements left out of the original purchase offer was a one-line sentence in the purchase agreement that mentioned the sale was contingent on selling the buyer’s home without further explanation. There was no Contingency of Purchase addendum submitted. But when I questioned the agent, it turned out the buyer’s home was in escrow. That makes all the difference in the world. It was a huge turning point for the seller and moved the seller from no way in hell to where do I sign.
We need to get back to the day when an agent calls the Sacramento listing agent. Buyer’s agents can find out if the home is still available, whether there are counter offers in the works or other offers on the way, if there is some special consideration that needs attention in the contract. Moreover, it gives the buyer’s agent a chance to pitch the qualifications of the buyer, network a little with the listing agent, establish communication and set the stage for offer acceptance.
Whether I’m listing homes in Elk Grove or West Sacramento, soon as I spot a showing through my SUPRA lockbox, I shoot off an email to the buyer’s agent to see if I can help to answer questions. My hope is to open a line of dialogue before they write an offer and to give agents easy access to my email.
Not Every Sacramento Home Seller Wants to Deal With a Counter Offer
When an agent says to me, you can always issue a counter offer to my buyer, that sounds like code for: the buyer is unreasonable, because I don’t think an agent is trying to tell a veteran how to sell real estate. But you never know in this market. We have a very weird market in Sacramento right now made up of serious buyers and squirrelly buyers and lowballing investors. I never know on which the roulette ball will land, as it is like a roulette wheel.
I can share with an agent that we have multiple offers, and yet the buyer’s agent will send me an offer that is contingent on selling the buyer’s home without a Contingency of Purchase addendum, much less a pre-approval letter. You can’t make this stuff up. Oh, and on top of it, maybe the agent hasn’t shown the home. It makes you wonder if buyers aren’t thumbing through MLS listings like a Neiman Marcus catalog and saying when I win the lottery, I’ll buy this house and that house and that house. And agents are writing offers for these guys. Blows my mind.
Most sellers in Sacramento do not enjoy bidding wars, believe it or not. They hope that a nice family will purchase their home at a fair price and close escrow — live there happily ever after. That’s what sellers want. Not every seller will want to deal with a counter offer. It’s stressful for many sellers. Negotiating does not come as easily to some of us as it does to others.
Myself, as a top-producing Sacramento real estate agent, I negotiate daily for a living, and I love to negotiate. But I’m also sensitive enough to realize that many of my sellers do not want to negotiate. They don’t want to deal with counter offers and all that they imply. They just want to sell their home.
If we receive 5 offers, the sellers, more likely than not, will take the path of least resistance and choose the best offer for them. Especially if it doesn’t involve a counter offer. If you’re thinking about writing an offer for a home in Sacramento, you should ask your buyer’s agent to call the listing agent to discuss what you might want to do. Although a listing agent cannot and should not ever speak for the seller, a listing agent can help to guide. You might have to write your best offer and stop trying to ding around.
On top of all of this, no offer should ever land on a listing agent’s computer without an advance call from a buyer’s agent. Not in this Sacramento real estate market.
What Sacramento Buyer’s Agents Want to Know
As a listing agent in Sacramento, I hear almost immediately from a lot of buyer’s agents when any of my new listings hit the market. Ding, ding, ding, my phone rings, one call after another. Especially if the listing is priced well and a turnkey home. The first thing agents want to know is if it’s still available, even if it’s only been in MLS for 30 minutes. That’s not as unusual as it may sound because my photos look enticing, the marketing verbiage is attractive and, in our competitive market in Sacramento, sometimes buyers don’t view the home before writing an offer. With digital online signing services such as DocuSign, buyers can quickly sign an offer within minutes for submission.
Of course, I check the Supra lockbox online showings to determine if the agent representing the buyer has entered the house. But that doesn’t tell me if the buyer was with the agent at the time. The buyer could live in San Francisco for all I know, but I can get a clue from the address on the buyer’s preapproval letter or earnest money deposit check. I can also just ask the agent. This is part of the information I pass on to my sellers as together we analyze the purchase offers.
The second thing buyer’s agents want to know is how much their buyer must offer to buy the home, on top of how many offers we have received. I will answer the third question but not the second, unless the seller instructs me to do it. And since it’s not really in the seller’s interest to disclose how high a buyer needs to go, few sellers will give me the go-ahead, yet buyer’s agents will still ask about it. They need to study the comparable sales and act accordingly; do their job.
Buyer’s agents will say: My buyers really wants to buy this house, so tell me how much they have to pay to get it. Well, I don’t know because it’s not my house. That’s the seller’s decision, and the seller probably doesn’t even know. If there is financing, the home needs to appraise. Moreover, if I tell that buyer’s agent how much everybody else offered, then I have to go back to all of those other agents and tell them how much the other buyers have offered. I can’t treat one agent with preference over another agent. They wouldn’t like it if the tables were turned and it was done to them. I am a REALTOR, which means I have to abide by the Code of Ethics, and I must treat all parties fairly.
It’s not just a made-up code that nobody follows.
Sacramento is in a Real Estate Drought with Active Short Contingent Sales
An agent called Sunday afternoon to complain that a seller told him it was OK to show a home. This is a short sale in Carmichael. It is listed in MLS as an active short contingent. My seller recently moved, and the buyer’s agent has been watering the lawn in the back because there is no automatic sprinkler. (Water is rationed this time of year in Sacramento as we’re in our dry season with hot weather.)
Far as I’m concerned, watering a lawn is going above and beyond the call of duty for this buyer’s agent. That’s a job for the seller, and it’s the seller’s responsibility to maintain the lawn during escrow. Even if the seller vacates the property, it doesn’t mean the seller is no longer responsible for the home. But this buyer’s agent offered to do it, and the seller accepted. I suspect the agent didn’t want to take a chance on her buyers’ dissatisfaction with the condition at closing. That’s a really smart real estate agent.
Here, I was in the middle of kicking back in my air-conditioned home reading Tina Fey’s Bossypants yesterday when my cell rang. I made the mistake of answering it. The caller was a buyer’s agent, and he was pretty irate. He demanded to know whether this particular short sale in Carmichael was available. Well, it’s listed as “active short contingent” in MLS, which means the seller has accepted an offer. I explained that to the agent, adding that we recently received approval from the first lender and are waiting for approval from the second.
He screamed at me: Why did the seller tell me he had moved out and it was OK to show it? I don’t know why this guy didn’t call the listing agent first. That’s what I would have done in his shoes. But agents don’t always do what I would do. I didn’t know what to say to him because as a practice I don’t show Active Short Contingent listings to prospective buyers. It’s generally pointless. But every real estate agent is different. So, I said the only thing I could think of that moment, which was, “I guess the seller thought it was OK for you to show his home.” How do I know what the seller thought? I imagine that the seller was as astonished as I that an agent would want to show an active short contingent home.
Was it the heat? It was almost 100 yesterday in Sacramento. The agent slammed down the phone. Then a few minutes later, the buyer’s agent (who was over at the home watering the lawn) called. She said this particular agent left all the doors open, the windows open and had stormed up to her as she was putting away the garden hose to berate her in front of his client. Turns out this buyer’s agent is from San Francisco. Different MLS, different systems. Still, the agent is required to know the meaning of ASC.
Unfortunately, it’s about to get more complicated in Sacramento with short sales, too. Our MetroList, which is the MLS for our four-county area, is changing the status for short sales with offers. These listings will no longer automatically be placed into Active Short Contingent status come July 31. We will now implement a new status called Pending Short Lender Approval (PSLA). This status change will mean an offer has been accepted by the seller and the seller no longer desires showings.
If a seller is willing to accept a backup offer, then the status can revert to Active Short Contingent. Agents who put a listing into Active Short Contingent status when the seller is no longer willing to show nor receive backups offers will be fined $200 or $250 per day, I guess they haven’t yet worked this part out.
Will this solve the problem we are experiencing in Sacramento? Well, it will if agents read MLS. But, seriously guys, how likely is that?
On the other hand, this upcoming MLS change will remove from inventory on certain online websites all the active short contingent listings. We will drop to less than 30 days of inventory. It will present a true picture of how little real estate is for sale in Sacramento. The Sacramento real estate market is in jeopardy until we bump up that inventory. As a Sacramento real estate agent, I’m doing my part. Watch for new listings this week on my website.
Photo: Elizabeth Weintraub
