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Sacramento First-Time Homebuyers Now Have a Fighting Chance
Compared to a few years ago, first-time homebuyers in Sacramento now have a fighting chance to buy a home without a ton of competition from cash investors. They just have each other to compete with, yet some of them are going about it the wrong way. The wrong way is when the buyers refuse to take their agent’s advice. They might say they listen to it, and then they do things their own screwed-up way. When the offer doesn’t get accepted, though, they tend to blame their agent instead of themselves.
This is nuts. My heart goes out to buyer’s agents who end up writing offer after offer that gets rejected because buyers are hung up on the wrong things. Like list price, for example. List price can be meaningless. It’s a measurement. It’s the comparable sales that matter. But people get attached to personal agendas, mantras and odd beliefs, not to mention our favorite sidekick: fate.
Homebuyers last week told me they had a specific price point in mind, but they were looking at an Elk Grove home priced higher. This home had been on the market for only a few days and they wanted to offer less than list price because it didn’t fit their plan to pay slightly more. Well, a reasonable person would say: stop looking at a home you can’t buy at the price you want to pay. But reasonable people aren’t necessarily buying real estate. The fact is a hesitant buyer needs to conform because some other proactive buyer will conform. These buyers reconsidered, conformed and they got the house, over a full-price cash investor.
This market in the spring of 2014 in Sacramento is different than previous markets. We no longer face stiff competition from cash investors. Of course, we Sacramento listing agents still receive full-price cash offers and a few lowballs from investors, but for the most part, the market is made up of first-time home buyers and move-up buyers. I counsel my sellers about choosing between an investor buyer and a buyer who will occupy the home. Does it matter who buys your house? You bet it does. And sellers can legally choose to sell only to an owner occupant.
Not surprising to real estate agents, a story in the Sacramento Bee says homeownership in Sacramento has fallen to a 40-year low. That’s not surprising, given the number of sellers we observed who said yes to the cash investors over the years and no to the first-time home buyers. But now the tide is reversed, and we still have a fighting chance to take back our neighborhoods, providing first-time homebuyers step up to the plate.
The kind of purchase offer a buyer makes can mean the difference between buying a home and not buying a home. Here’s my general advice: Study the comps, listen to your agent and, if the home is on the market for only a few days and the price is justified, pay it or somebody else will. A more savvy buyer will probably pay more than list if the deck is stacked against them. If the home is super desirable, a hot commodity and you’re an FHA buyer or a VA buyer, you’re just not as desirable to the sellers as the conventional buyers, so step up your price and terms or you’ll fall to the bottom.
Hey, agents don’t make the rules. The market dictates.
An Accepted Purchase Offer in Sacramento is Only the Beginning
When buying or selling a home in Sacramento, the parties often don’t realize that it’s hardly over when both sides sign an accepted purchase offer; in fact, the process is just beginning and anything can go wrong. This is where FSBOs (For Sale By Owners) tend to struggle and where real estate agents with less experience can mess up as well.
Think of this point in time as that scene in the Wizard of Oz when Dorothy, all freshly scrubbed and sporting her sparkly ruby slippers, is merrily laughing and singing with her gangly companions, setting out from Munchkin Land to skip down the Yellow Brick Road, just before Glinda vanishes in a puff of twinkly fairy dust. Everybody is happy and excited, looking forward to arriving in the magical Emerald City. They have no idea what lies in store for them.
And neither do most Sacramento home sellers and buyers.
This is when your Sacramento real estate agent can make a world of difference to you. Selling a home in Sacramento is a lot more than just finding a buyer. It means qualifying the buyer, thinking ahead and predicting what could happen, and taking steps to prevent the trees from strangling you and throwing apples at your face. It means fighting off the winged monkeys.
And, if it’s necessary, making it snow.
Keeping everybody on the path to closing. And happy. It’s not the money, either, because a commission check can lose its luster fast if the seller or buyers are unhappy when it’s all over. This is no easy feat. But it’s what I do every day, and I believe I do it well. Going into escrow is just the beginning. If you’re looking for a veteran Sacramento real estate agent, please call Elizabeth Weintraub at 916 233 6759.
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.
Can We Still Keep Looking After We Buy a Home in Sacramento?
Your homebuying days should come to a close when you’ve found a home to buy — which should put a stop to such questions as can we still keep looking after we buy a home in Sacramento? But it doesn’t. Buyers in Sacramento still ask those types of questions. They don’t know. I call it the red shoes syndrome for first-time home buyers. The question nags at them as to whether there is a better home that maybe they just didn’t have a chance to see.
The thing is there will always be a chance to buy a home Sacramento. Maybe not today and maybe not tomorrow. Maybe next year a home will come on the market that might have better suited a buyer’s fancy, but should they wait? That would be a year without a home. The problem is they want the perfect home, and there really is no such thing as a perfect home. There is the grass looking greener on the other side, though.
Home buyers will be much happier if they review their reasons for buying a home in Sacramento. Then consider what kind of trade-offs they will make to find the home of their dreams. Maybe the dining room will be smaller than they had hoped, but if everything else fits their requirements, it’s possible that they should probably buy that home. Especially if it’s in the right location because you can’t move locations.
Homes also tend to have voices, whether a buyer realizes it. From the moment buyers step into a home, they form an impression, but it’s malleable. It can get better or it can worsen. Buyers should not have to talk themselves into wanting to buy a home in Sacramento. It’s much simpler than that. They either want it or they don’t. If they want that home, then the very best thing they can do for themselves is to buy it and stop looking. To continue looking is fruitless and leads to disappointment.
It’s called making a decision. If you “sleep on” trying to decide, it’s possible that you don’t really want the home because you’re taking a risk that you could lose it.
Sacramento Home Buyers Ask: Why Wasn’t My Offer Accepted?
It pains me when I see a purchase offer to buy a home arrive in my email and I instinctively realize the buyer will be asking her agent: why wasn’t my offer accepted? In the mind of many Sacramento home buyers, they did everything right. This particular home buyer found the home she wanted online all by herself — it fit her parameters exactly. She fell in love with the photographs and knew before she ever stepped foot inside that house that she wanted to buy that home.
Visiting the home in person solidified those feelings and thoughts. Yes, she should definitely buy that home. She is qualified and has her pre-approval letter that confirms it. The buyer may have provided proof of funds from her checking account. She has delivered an earnest money deposit with her offer. Everything is as it should be. All the stars are aligned, and this is her home. She even offered list price. She did exactly what was asked. All that’s left to do is to figure out where to put the sofa.
Ack. The seller accepted a different offer. Why didn’t she get this house? Why did the seller reject her offer? What is wrong with her Sacramento real estate agent? These are the thoughts running through the buyers’ mind. Do you want to know what the problem is?
First, it’s probably not the real estate agent. I imagine the real estate agent told the buyer that Sacramento is experiencing a limited inventory market, there is not much for sale, and there is intense competition, especially for entry-level homes in good condition. This means many Sacramento home buyers must write a better-than-normal offer. It could entail a higher price, paying more of the closing costs or giving the seller extra benefits, among other home buying offer tips.
I know that buyer’s agents explain this to their Sacramento home buyers. But somehow, that advice seems to fall on deaf ears or for some other reason the buyer does not agree nor understand. An agent can tell a buyer they need to offer more than $300,000 for that listing at $295,000, and some buyers will still ask, can I offer $250,000? These are not true buyers who say those sorts of things; these are people who are mentally deranged, which means yes, they are buyers from another universe and don’t operate in our world.
Working with a veteran real estate agent can also help improve a buyer’s chances of getting an offer accepted. Listing agents know the agents who perform and agents gain a reputation in this industry — good reason not to rely on your cousin’s aunt who happens to have a real estate license.
It’s generally one of three reasons why a buyer’s offer is not accepted: the buyer or the agent or both. Which is your reason? Because it’s not the Sacramento real estate market. We all must adjust to the market. If a buyer conforms to the market, the buyer will get her offer accepted.
