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5 Ways to Get Your Sacramento Purchase Offer Rejected
We have weeks in Sacramento real estate during which I stare at my offer tracking sheets to count the number of offers that are excellent examples of how not to write a purchase offer to buy a home in Sacramento, also known as how to get your purchase offer rejected. You see, one of the benefits of working with the Elizabeth Weintraub Team is that I provide useful information to my own team members. I often advise my team how other listing agents look at purchase offers — because I know how I look at them — and offer tips about what NOT to do. How not to get an offer rejected. Which is why so many of my team member’s purchase offers are accepted.
Because when an agent is working with a buyer as a buyer’s agent, often the focus is directly on that buyer. The buyer’s agent can be so wrapped up in what her buyer wants and in trying to fulfill those requirements that an agent can forget how her or his actions and words appear to the parties who can make or break that Sacramento home purchase.
- The first rule is do not argue with the listing agent. I don’t care if that listing agent is dumber than a bag of rocks, don’t argue. There is a big difference between arguments and negotiation. Don’t try to explain a “cash offer” for example to the listing agent as there is hardly a Sacramento real estate agent alive today who doesn’t know the advantages of cash over financing, even though it is always all cash in the end.
- The second rule is don’t insult the seller. If you think the house appears cluttered or dirty, for example, don’t demand that the seller “wash the floors” and take all personal items with them. Our California purchase contract already addresses debris. Wash the floors? Seriously? And how does one wash carpeting? Tear it off the floor and toss it into the washing machine?
- The third rule is send all of the documentation that is necessary in order to submit a purchase offer. And, for heaven’s sakes, try to submit this paperwork in one file in the manner specified in the multiple listing. If the paperwork is incomplete, the purchase offer is incomplete.
- The fourth rule is don’t submit a lowball offer when the seller has received multiple offers. You would think this would be such an obvious rule, but gah, it is not. I suspect some agents do this anyway to “teach a lesson” to their buyers so hopefully on the next purchase offer the buyers will be more reasonable.
- The fifth rule is don’t submit a lowball offer while also breaking rules 1 through 4. This is worse than 3 strikes and you’re out. Why do you think the sellers would want to consider your lowball offer that insults them, makes unreasonable demands and is incomplete?
It’s tough in some Sacramento neighborhoods right now to buy a nice home. Don’t make it so much harder on yourself than it needs to be.
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.
Cash Investors, Pie Crusts and Robot Agents
There is an acronym company doing business as a limited liability corporation and trying to buy homes in Sacramento as a cash-infused investor. There are undoubtedly many such companies and investors vying for homes in Sacramento. But this one in particular canceled an escrow because it didn’t do its due diligence upfront, so I’m wary about them. This particular company has also hired at least 3 different real estate agents in Sacramento to throw offers at the wall. I know this because I have received offers from 3 different agents representing the same company.
You know, not a day goes by, honestly, in which I don’t answer my phone and hear the words: I am a cash investor. I suspect the callers feel I should treat them differently than I would anybody else, but they’re in for a rude awakening. Just like I am a number to them, they are a number to me. I realize they have little vested interest in the property or in meeting the seller’s needs. They probably have not even seen the property. If the escrow demands a special consideration, they are unlikely to provide it. They are not special. Their cash is not “king” to me.
It seems like the REO robot agents are being replaced by the robot buyer’s agents. The tide has changed from robot listing agents who represent banks and asset managers of foreclosed homes to robot selling agents who represent cash investors. These guys comb MLS daily looking for new listings, writing offers, uploading the purchase offers to DocuSign and emailing those offers to listing agents. You throw enough at the wall, something is bound to stick.
As a Sacramento short sale agent, I have to look out for my seller’s interests and help them to choose the most motivated buyer to close their short sale. As a general rule, short sale banks don’t seem to like limited liability corporations (LLCs). I’m not sure why, either. It could be that an LLC is in-your-face about profit, versus a home owner who just wants a roof over her head. In any case, it’s hard to get excited over these cash offers. If push comes to shove, they don’t shove.
You know, short sales involve a lot of frustration. I dodge a lot of whipped cream pies in this business. Speaking of pies and throwing crap at the wall, I’d like to share a story with you. It involves a pie crust. Those of you who have never made a pie crust may perhaps find it difficult to believe that pie crusts do not live in your grocer’s freezer. Yes, you can actually make a pie crust at home out of flour, salt, shortening and water.
The trick is to not overwork the dough. If you massage it and roll it too many times, it will become tough and crumble. I was probably 7-years-old when I made my first pie crust. I thought I had followed the directions explicitly but I was having trouble. It wasn’t sticking together. I blamed it on my rolling pin. After I had rolled out the dough, I tried to fold it into quarters and lift on waxed paper to the pie tin, but it fell apart. I rolled it again. It crumbled again. In a split second of frustration, I hurled it at the wall.
Uh, oh. I could not believe I did that. I was horrified. My mother stopped what she was doing and stared at me. I was in big trouble, and I knew it. My heart started to pound. I might never get to bake again in the kitchen. I might go to bed without dessert. Maybe stand in the corner. But instead, my mother started to laugh. “That’s exactly where my first pie crust ended up,” she said.
Today, I make a perfect pie crust. And I’m a pretty darn good Sacramento short sale agent, too. Just don’t call and tell me you’re a cash investor, because I don’t care.
A Tip for Getting the Edge When Buying Homes in Sacramento
In this Sacramento real estate market, it doesn’t matter how many offers the seller has received. Yet, agents continue to call and ask that question. Why doesn’t it matter? Because any well priced home will be sold within hours if not within days of hitting the market. If a listing agent doesn’t have an offer when the buyer’s agent calls, you can bet an offer is on its way. Maybe 10 or 20 offers are in the works. It just doesn’t matter.
What does matter is how strong is your purchase offer? How well written is your offer? Have you included any special conditions to make your offer stand out among other offers?
I have empathy for buyer’s agents in this market. It’s very tough. A buyer’s agent is but one of many pigeons in the park scrambling for tossed bread crumbs. Sacramento is a seller’s market. Limited inventory. Want to know how many homes are available for sale in the entire county of Sacramento today? I just ran an MLS search and the answer is 1,831 homes. Of those, only 407 are short sales. To put this into perspective for you, in August of 2007, the number of our available homes for sale in Sacramento County was 10,521. Five years ago we had almost 6 times the inventory! Buying homes in Sacramento is very difficult today.
This is a huge drop in the number of homes for sale in Sacramento County. It’s gigantic. It’s like King Kong and Jessica Lange.
It must be even tougher to be a buyer’s agent who doesn’t want to tick off a buyer when the buyer insists on offering less than list price. It’s amusing to receive a low offer accompanied by a note telling us how much the buyer loves the home. They adore this home so much that they want to negotiate on the price. I don’t know where some buyers get the idea that making their offer even less attractive gives them a fighting chance or that a seller would be willing to issue a counter offer. When a seller has received a dozen offers — some cash and above list — the seller tosses lowball offers in the circular bin.
It’s difficult to get your head around the fact that a less-than-list price offer could be considered a lowball in today’s market. For all the home buyers buying homes in Sacramento, do yourself a favor and hire a buyer’s agent who will present the true picture and guide you in the right direction. Otherwise, you may as well go to the park and feed the birds.
