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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.
Why Buyers Should Talk to their Sacramento Neighbors
If you think your neighbors don’t matter when you buy a home in Sacramento — or anywhere for that matter — think again. I could not imagine a smart person buying a home in a neighborhood without talking to the neighbors and, perhaps, even asking the neighbors what they think about each other. Some people love to gossip.
My parents didn’t do that when I was growing up. They bought a home and did not talk to the neighbors in 1955 in a brand new subdivision called Heritage Homes, located in the Village of Circle Pines, an isolated area at the time about 15 minutes outside of Minneapolis. Our neighbors, the Palmquists — I vividly recall those horrid people and their hoard of little brats to this day — were absolutely unbearable. Apart from letting their lawn die, throwing trash all over the yard — such an eyesore — and their screaming, yelling and drunken brawls at all hours of the night, the kids were hoodlums who would steal toys in bright daylight right out of our yard. One of the Palmquist kids stuck a water hose into my bedroom window and turned it on full blast.
To try to put a stop to this kind of behavior, I stuffed one of the little Palmquist girls into my red wagon and pulled her out into the field across the street. A field that was converted into an ice rink in the winter but in the summer was blanketed with stickers. After a stern lecture and warning, I removed her shoes, dumped her in the field and left.
Fortunately, the neighbors on my street of homes in Land Park are wonderful. We stop when we see each other outside and talk. It’s a quiet street with very little traffic, only a block long. It’s rare for anybody who doesn’t live here to walk down our street or drive by. It’s like an oasis. There were a couple of neighbors whom some people didn’t much care for and they moved away.
Neighborhoods can change. We’ve been lucky throughout the ups and downs of the Sacramento real estate market that we’ve had only one short sale on our street. Imagine the economic make-up of areas where everybody paid half a million or more for their homes and those very homes are now worth $200,000 or so. That’s assuming, of course, that those individuals who overpaid could afford it at the time they bought.
One of my clients, a seller who had owned a home in an upscale community of million-dollar homes, recently closed escrow. Homes in that neighborhood are now selling around $400,000. He held a liquidation sale the last few days of his occupancy, and some of his neighbors who served on the board of his HOA showed up and tried to stop him from having the sale. They even sent security guards over to his house to stop the sale. They videotaped his wife screaming at their rude behavior, such a mild mannered and sweet woman otherwise. This is what neighbors can do.
You’re not just buying a home; you’re buying a neighborhood. Talk to the neighbors before buying a home.
A Cactus Garden in Land Park
I met with a really sweet seller in Fair Oaks yesterday and, with any luck, we’ll be putting his home on the market next week. It has a to-die for backyard with a park-like view. It could be anything you wanted it to be in your imagination. A woodsy forest, like Sherwood Forest. A redwood retreat along the ocean just beyond the bluff. A plantation in the South, like Tara in the spring. I can’t wait to show you this home next week.
Until then, take a look at my cactus garden in Land Park. The spring blossoms are here. The pear cactus won’t have blooms until next month because the blooms are just beginning to form, but everything else in the garden is breaking out into song. Wait, I can hear Mary Poppins. Hope she doesn’t land in the cactus garden because the wind blew her the wrong way or she’ll have little spines and thorns up her skirt.
I also closed another home in Sacramento yesterday — that managed to drag on much longer than necessary. The mortgage brokers could not figure how to find the loss payable clause for the insurance policy, so they sent an email over and over to a person who hasn’t been in the office during our entire transaction! When I discovered this, they had already been sitting on their thumbs for several days. Some escrows close easily, and others you’ve got to kick and curse to get to the Recorder’s Office.
This particular escrow was a home in the pocket of homes just east of Broadway and south of 4th Street. It’s not Oak Park, and the homes are generally bigger and newer than those found in that part of Oak Park, but sometimes people confuse the two neighborhoods. This pocket of homes off Redding is so small that often there are no comps. The last comp in this area sold around $180,000. So when the seller asked me how much I thought he could get, I wet my finger, stuck it in the air and declared, maybe $200,000, maybe more.
We listed it at $200,000 and received several offers immediately. It sold at $211,000. Then the appraisal came in and, you guessed it, the appraisal was $200,000. Too low. We contested, no such luck. The buyer didn’t have the money to bridge the gap, as many buyers in this price range have limited funds. The seller could have canceled the transaction and sold to another buyer, possibly for all cash so it would not require an appraisal, but the seller was happy enough with the $200,000 price. Not to mention, he has a soft place in his heart for first-time home buyers. He was a first-time home buyer once himself.
It closed at $200,000, and a new family is very excited. It’s very hard to find a nice home in the $200,000 price range that is close to downtown and in an established neighborhood where the neighbors all know each other. Another happy ending for this Sacramento real estate agent and all involved.
Hope you like the cactus flowers! Welcome to Spring in Land Park.
Some Agents Are Dealing With Offer Rejection
A frustrated home buyer in Orange County called to ask why I thought that her offers weren’t being accepted and often, in many cases, were unacknowledged. I don’t know why she called an agent in northern California. Now, I don’t know the Orange County market because I haven’t worked in that area since the 1980s. I primarily sell real estate in Sacramento. But if that market is anything like Sacramento, entry-level housing is hot, hot, hot. Which means multiple offers. This buyer is trying to buy a short sale.
I asked the buyer if her agent had any experience working with short sales. The answer was no. I pointed out that some agents refer their clients to an agent with experience in exchange for a referral fee.
“But,” she moaned, “We’ve been writing offers since January; that’s when we moved in with our parents.”
Four months is a long time to be hitting a block wall. “If you don’t talk to your agent about this,” I answered, “You’ll still be living with your parents in September.”
That’s all the help I could offer because I cannot advise nor interfere with another agent’s transaction. It’s against the Code of Ethics.
I also received an offer from an agent on a Sacramento short sale listing after disclosing that multiple offers were coming. The agent offered list price and asked for the following:
- 3% concession to the buyer
- home protection plan
- pest report and completion certificate
- 2-year roof certification (which may require repairs)
- seller to comply with FHA requirements
I asked the agent why would she include all these things that the bank is unlikely to pay for? On top of which, with multiple offers, I can pretty much guarantee that every other offer will exceed list price by thousands, if not tens of thousands. Once the bank receives the estimated HUD-1 — even if every offer was identical in price — this agent’s offer would fall to the bottom of the pile because that net will be much lower than all the others.
The agent responded rather curtly, “Because we expect to negotiate those things with the bank.”
It’s not my place to tell another agent how to conduct her business, so I refrain from offering suggestions under these circumstances. The point is the bank will never negotiate with her buyers because those types of offers are rejected by the seller. Who wants to sit in escrow for 8 weeks with a buyer whose offer will be rejected or renegotiated? We want an offer that will be accepted first go around.
Bidding Wars to Buy a Home in Sacramento
A potential home buyer called yesterday to talk about buying a home in Lincoln. Lots of buyers gravitate toward Lincoln because it’s newer and often more affordable than Roseville, although it’s a bit further out from the core of Sacramento. He wanted to know what the market was like in Lincoln. The real estate market in Lincoln is the same as anywhere else in Sacramento right now, mostly a seller’s market. Limited inventory. Too many buyers. Crazy bidding wars.
This fellow said he did not want to get into a bidding war. Hey, I did not want my car to stop in the middle of the freeway the other day either but it did. All the lights on the dashboard came on and it just stopped running. Fortunately, I was in stop-and-go traffic, coming back to Sacramento from Roseville, one of the few times I was grateful for the slow down in traffic. And now that I think about it, my car is not even 2 years old, and I better take it in to have it checked out or I could die next go around if it happened again. This is how busy I’ve been — not enough time to think about why my car died on the freeway, of all places.
The point is we deal with what’s at hand, and right now, we have a seller’s market. This means that some first-time home buyers will not buy a home. Because there are not enough homes for sale to feed the demand. There is not enough for everybody, no. No sense griping or complaining, it’s just the way it is. If you want to buy a home, you might end up bidding for it against one or more buyers. It’s not the fault of your Sacramento real estate agent, so don’t blame her.
Is it a good time to buy? You betcha. Interest rates are so low it’s almost laughable. It’s as though you’re getting money for free. Prices are still low, even though they are edging upwards. Do you want to wait until interest rates reach a point where they double? Do you want to be priced out of the market or have to settle for a home you don’t want? A little competition doesn’t kill you. What can kill you is to sit back and watch all of this action without participation. Or, not taking your car to a mechanic, as in my case.
So, the worst happens and you pay $5,000 more or $10,000 more or whatever amount more than the seller asked. The list price is not all that important in today’s market. The market value carries a lot more weight than a silly listing price. And what difference will it make a year from now or two years from now?
