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A Private Group Showing is Not an Open House
If the idea just occurred to you that now is a good time for buying a home in Sacramento, you need to talk to a Sacramento real estate agent pronto. I’m not gonna say this is not a good time because I am a real estate agent, and in my playbook it’s always a good time to buy, but it’s not an easy time to buy a home. It’s difficult. Exceedingly difficult. When your real estate agent tells you there will be multiple offers, let me tell you, there will be multiple offers, and some of them will undoubtedly be crazy, wild offers.
Our inventory is very low. There are not a lot of homes to choose from in certain neighborhoods. Even the number of homes in Land Park, for example, are about half the normal. But in neighborhoods like Natomas and Elk Grove, I might run a half-mile to one-mile radius to pull comparable sales and find nothing for sale whatsoever. Everything is pending or active short contingent.
In most situations, we might want to give a wide berth of exposure to try to attract the largest number of offers and the highest number of offers. Ordinarily, an offer is good for 72 hours, unless the buyer changes the time for acceptance. This means if a seller does not respond to an offer within 3 days, the offer expires. It’s no longer on the table. So, what’s a seller to do who wants to maximize exposure? Keep it on the market with instructions to review all offers on a certain day in the future.
In short sale situations, the approach might be different. It all depends on who the seller is and whether the seller is in an emotional state to handle the volume of traffic generated by this type of seller’s market in Sacramento. In some areas, it can be brutal. Buyer’s agents calling at all hours of the night, showing up without calling, parking on the lawn, barging in without an appointment when an appointment is required, this Sacramento real estate agent has heard it all. These are desperate times, but they do not call for desperate measures nor for losing one’s professionalism.
In a short sale, we need one offer at market value. An offer that will appraise as well. An offer from a committed and dedicated buyer. We don’t need 55 offers. Just one that will close. If it’s cash and the buyer is serious, that’s a good sign, too, but it doesn’t mean that a cash offer will win out over a financed offer. Cash buyers can sometimes be distracted by shiny new things. Owner occupants, buyers who want to buy a home to live in, tend to be more committed.
The approach to marketing a home and receiving / presenting offers differs with each situation and is tailor-made for the individual seller. There is no one-size-fits-all. Now, more than ever, the confidential agent remarks in MLS are crucial for a buyer’s agent to read prior to submitting an offer.
We’ve had situations in the past in which the confidential remarks stated showings would be held on a certain day for a two-hour period. Buyer’s agents need to accompany their buyers on a showing. That’s how the real estate business works. Buyer’s agents cannot simply send their buyer over to the property because the buyer’s agent is unavailable on that day. No buyers will be admitted to a seller’s home if the buyer is unaccompanied by an agent. This is not an open house.
My sellers are instructed not to let strangers inside their home. A buyer’s agent needs to produce a business card at the door. If the buyer’s agent sends over an unescorted buyer, we can certainly arrange for another agent to represent an unrepresented buyer or we can send the buyer back home to get her agent. After all, buyers don’t have access to the confidential remarks in MLS. Moreover, it’s important to understand that a private group showing is not an open house.
No Homes for Sale in Sacramento
The real estate market in Sacramento is a little bit like that website depicting reasons why You Will Not Go to Space Today. I could easily create a website about why homebuyers are not buying a home today, except I can’t draw very well. Great Sacramento real estate agent, but lousy artist. I know my limitations.
A guy called yesterday to ask about a Sacramento listing. Said he found it among his list of homes for sale. He was looking on Zillow, poor guy. I don’t know how to get the word out to buyers that looking on Zillow is the wrong place to look. So is Trulia and, if we’re really talking about homes for sale, Realtor.com is not that hot, either. All of those websites are missing listings, showcase expired and sold homes, and they take too danged long to update. If you’re gonna buy a home in Sacramento, you better be getting your listings from a Sacramento real estate agent, either from an agent’s MLS-connected website or, even better, directly from MLS yourself.
You can’t get new listings directly from MLS unless a) you are an agent or b) an agent sends them to you.
But it doesn’t really matter because there are very few to no homes for sale in Sacramento. The guy who called yesterday was stammering because he could not remember the street address and was frantically searching for it during our conversation. I don’t think he expected me to answer my phone or to answer it as quickly as I did. Hard to say. But as he was stuttering, repeating himself and trying to buy time to find the address, I felt like telling him the home was probably sold, except I didn’t want to offend him; he sounded so sad and depressed. My heart goes out to first-time homebuyers, but if they already have an agent, I can’t help them.
I have new listings coming up this week. First, I will tell my Elizabeth Weintraub team members about them. Then, I will let agents in my office know that we have new listings. Many real estate companies in Sacramento withhold listings from MLS for 72 hours because we can. Lyon Real Estate agents are market leaders in Sacramento. By the time these listings show up in Zillow or Trulia, they will most likely be sold. This is a tough market with so few homes for sale. Almost every day buyer’s agents call and email, asking if my pending sales are falling apart or whether I am taking a new listing.
If home buyers are relying on Trulia, Zillow or Realtor.com to help them find a home to buy, I hate to say it, they are not buying a home in Sacramento today.
The Main Reason for a Preapproval Letter
A stack of 700 francs from French Polynesia sits on my desk. Primarily because I can’t throw them away, and I don’t know what else to do with them. They are pretty much worthless. People who exchange money for a living don’t want them because they are coins. If I were back in Bora Bora, these 7 coins might buy me two diet Cokes. But here? Nuttin’. Just like some home buyer who wants to write an offer without a preapproval letter — that kind of purchase offer would be worthless, like my pile of francs.
Yet, I know that home buyers struggle with the issue of obtaining a preapproval letter. Heck, even my neighbor doesn’t understand why she should get a preapproval letter. She says when she finds a home she wants to buy, she’ll get a letter. This is why she might not ever buy a house, though. Because by the time she finds something to buy, there will be a dozen other home buyers wanting to buy the same house, and no seller in this market will accept an offer without a preapproval letter to accompany that offer. So, my neighbor is at a huge disadvantage. She doesn’t want to hear about the market in Sacramento or how to buy a home in Sacramento. She has her own ideas about how it’s done, none of which are working out very well for her.
After all, she only buys a new home once every 30 years. We Sacramento real estate agents write offers for clients every week. Real estate is our business. We want to help our clients not hinder them.
This is a seller’s market in Sacramento. No inventory. Lots of buyers. This market is very tough for buyers. It’s more important now than ever to get a preapproval letter before buying a home. Not only does it tell you how much you qualify for, which doesn’t mean you have to go for the max, btw, but it assures the seller you have the means to close. It says you are serious and not some lookie-loo. Besides, sellers don’t accept offers without a preapproval letter. The preapproval letter is not for your agent. It’s for the seller.
The question might be where does one get a preapproval letter from? For starters, it should be from the lender where one intends to get a loan. Moreover, it should be from a lender who can perform. The two aren’t necessarily the same. Lots of home buyers want to go to their own bank or their own credit union to get a loan, and that’s probably the worst place to go. The reason is there is no guarantee that their own lender will perform. They all have access to the same bag of money, basically, but some lenders guarantee performance and some do not.
Why is performance important? Because a purchase contract is typically written for 30 days. That means the buyer must close escrow within 30 days of the seller’s acceptance or the contract expires. If your bank can’t close on time, the seller has the right to cancel. And you know what? With prices going up, sellers are canceling contracts that have expired. Yup! I’ve had it happen twice when representing the seller. The other agent’s buyers struggled to close because of this or that or some other thing and asked for an extension. Instead, my sellers canceled. The buyers had no say at that point. The contract time period had expired and it was within the seller’s rights to cancel. Do you want to lose your home because your lender can’t close on time?
You might want to ask your agent for a couple of recommendations. Real estate agents know which lenders perform because they work with those same lenders over and over. In case you’re thinking that agents get kickbacks or some other kind of incentive to recommend a lender, think again. That’s against the law. The only reason for an agent to recommend a mortgage broker or lender is performance. Period.
Know Your Area Before Home Buying
Overwater bungalow at St. Regis Resort at Bora Bora.
The water is very still this morning, unlike the turbulent waves and constant ripples of the past week. I can see the sun barely begin to poke through the clouds. Even the air is hushed. There is some kind of creature rustling the palm fronds over my head. I prefer to think that it is a bird and not a rat. I have not seen a rat. Plus, a rat up on the roof would probably have to be a water rat since my structure was built over the water, and I don’t know if there is any such thing as a water rat in Bora Bora. But there are birds.
I spent several hours yesterday tracking down the types of birds we have seen. Two in particular. I researched them online until I was satisfied that I had located the correct birds. You might wonder why a person would spend an inordinate amount of time on her vacation to do this, and I guess there are two reasons. I like to be aware of my environment, and I am inquisitive. If you are aware of your environment, it heightens your enjoyment of said environment. You feel more connected to it, part of it.
It’s no different than how you might feel about your neighborhood or your home. If you are unfamiliar with a place you might want to move to, then hire an expert who can advise and assist, such as a Sacramento real estate agent to help you before home buying. If your agent doesn’t have the immediate answer, she has the resources at hand to get it for you.
Buying Sacramento real estate is not only an emotional decision for most people, it’s also somewhat logical and based on each person’s individual lifestyle. How will you know if your lifestyle is a good fit for an area if you don’t ask questions of your real estate agent? You don’t really need to know if an area will fit you, you need to know if you will fit in to a neighborhood. Doing homework before home buying pays off. I had a lengthy conversation before I left for my vacation with a fellow from Hawaii. I could sense instinctively that he would most likely be happier living in Curtis Park than in Land Park, and I didn’t draw that conclusion from anything tangible.
I present to you on this page a couple of Chestnut-breasted Mannikins (Longchura Castaneothorox) above. They were brought to Bora Bora from Australia and are not endemic. To the right are Red-Vented Bulbul (Pycnonotus Cafer). One of the bird sites lists the bulbul as one of the top 100 most invasive species as it has established itself in the wild not only in South Pacific islands but all the way to Dubai.
That bird on the roof just flew off and landed on another roof down the way. It is definitely a Chestnut-Breasted Mannikin. Whew.
Sacramento Home Buyers Need a Reality Check
How does a seller today know if she has a real buyer who has made an offer? There are a lot of Sacramento home buyers wandering around who apparently look like a buyer, walk like a buyer, squawk like a buyer but they are not buyers. I wish there was some kind of test we could give them. As a buyer’s agent there probably is, but there is not from the listing agent’s point of view. That’s because the listing agent has no conversations with the buyer and no direct contact. We can obtain a preapproval letter, many of which are useless, and an earnest money deposit, but it still doesn’t mean the buyer is a buyer.
Now, you would think a real estate agent would engage in a lengthy conversation with a potential buyer, but the truth is most do not. A buyer calls an agent, asks to see a property and then writes an offer. In some ways, the agent is an order taker. Doesn’t question. Doesn’t probe. Just writes the offer and keeps her lips zipped.
You know, that’s not the way I was trained in real estate many years ago. I was always taught that we as real estate agents should form a relationship with our clients, counsel and advise them, ask questions, try to do what is best for the client, not just say “press hard, third copy is yours.”
Keeping buyers in escrow is a difficult job, even in a seller’s market. You might think that a buyer would not cancel escrow simply because there are so few other properties available. To cancel is to take a chance on buying nothing for a long, long time. Because there is not much available for sale in Sacramento. Pickings are slim and few between.
There are a lot of Sacramento home buyers but there doesn’t seem to be very many who are actually performing. The fallout rate seems to be much higher than it needs to be. We’ve got a lot of buyers begging for a home but shortly after they go into escrow, they cancel. For no other reason than cold feet. I eye them more suspiciously now. I question the quality of prospective buyers at the moment.
It would be nice if we could put potential Sacramento home buyers into an X-ray machine like the ones at the airport. Step in, put your feet on the footprints, raise your hands over your head and hold still. BZZZT. Nope, you’re not a buyer. You’re not going through Security to escrow. You can stuff your passport back in your pocket, grab your luggage and go home.
