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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.
How Not to Present a Purchase Offer in Sacramento
A real estate agent I first met 5 years ago when I interviewed her for my book, The Short Sale Savior, and later she referred a relative to me whose home I sold in Sacramento, serves on an Education Committee at a REALTOR association in the Bay area. She asked if I would do a webinar for her agents to help them to get purchase offers accepted. I generally don’t agree to do webinars or seminars because I don’t like them. Who am I to tell people what to do? Seminars are ex-husbands’ gigs, not mine. But I agreed because I can’t say no to this person. She is so danged sweet!
Sweetness gets you everywhere in this life. Vinegar, not so much.
I might start with talking about what NOT to do when writing an offer to buy a home. Because I list such a huge volume of homes in the Sacramento area, I see all kinds of offers. I can estimate that I probably receive more than 1,000 offers a year, maybe even twice that amount depending on whether it’s a seller’s market in Sacramento. It’s common today to receive a minimum of 20 to 30 offers for entry-level listings.
The unspoken truth is at least half of those purchase offers are garbage. I’m being generous with that percentage. That’s the part that agents don’t talk about because nobody wants to believe that a buyer’s agent can’t write an offer, yet that’s the first problem with many offers. There is no nice way to sugar coat this. I continually find myself defending the competency of my profession to sellers who can’t believe their eyes at some of the offers we get.
In a seller’s market, a seller and her listing agent can be very selective. Sure, there are markets in which the tables are turned, but our present market in Sacramento is a seller’s market. This means a seller can be looking for the very best offer and might be examining an offer with an eye for a reason to reject it. This is a very different approach than hoping to accept an offer, which is how sellers view offers in an opposite market. Unfortunately, buyers and buyer’s agents give sellers plenty of reasons to reject an offer. If a seller is considering 2 identical offers, one offer may get accepted simply because the other was rejected.
The trick is not to set up an offer for possible rejection. Here are some things an agent and her or his buyer should try NOT to do when presenting a purchase offer:
Clerical Offer Mistakes
- Misspelling of names
- Wrong property address
- No dates
- Missing signatures / initials
- Incorrect mathematical calculations
- Outdated forms
- Missing addendums or supporting documentations
- Sending unnecessary documents / paperwork
Writing FHA or VA offers on listings that do not offer those financing terms?
Sending the offer to the wrong agent or the wrong company or in the wrong format
Not reading the confidential agent remarks / attachments nor following specific directions
Exhibiting hostility toward the listing agent or seller
- Sending the agent a copy of the MLS print-out or list of comparable sales
- Demanding concessions and other unusual terms in the offer
- Belittling the home, the seller and the home’s location
- Yelling and screaming and use of profanity
No cover letter with the offer, hoping the terms and conditions speak for themselves. Often, they do not.
Sending a generic cover letter saying the buyer loves the home. All buyers love the home or they wouldn’t be writing an offer.
Forgetting that all offers look the same. Only the numbers and names change.
The bottom line is don’t give the seller any ammunition to reject an offer. In multiple-offer situations, a buyer should not allow her offer to be automatically eliminated from the competition. Ideally, a buyer wants her offer to be the best, at the least an offer worthy of top consideration. Give it a fighting chance.
How to Buy a Pending Home in Sacramento
Sometimes, a Sacramento home buyer is in the right place at the right time. Or, better put, sometimes their Sacramento REALTOR is in the right place at the right time, and that means having her finger on the pulse of MLS. You’d be amazed at how few times during the day any given real estate agent gazes upon MLS, but that’s where one will find all of the action. Ya gotta cruise the news. If you think you can’t buy a pending home in Sacramento, think again.
Say, for example, that you are a Sacramento listing agent, and you’ve got a buyer who isn’t exactly cooperating. You might think: oh, who would do that in a seller’s market? A person like that would have to have a screw loose. But you would be surprised. Maybe it’s the buyer’s agent who has stopped responding to emails or phone calls. You might be astonished at how many agents struggle with communication issues or simply ignore attempts to reach them. There might be a contractual obligation that needs discussing such as putting an earnest money deposit into escrow, and maybe that hasn’t happened. That’s a warning sign a contract is about to be canceled and you might be able to buy a pending home in Sacramento. Or, maybe the buyer needs to release contingencies, and his 17 days has come and gone. Another warning sign. If you’re that listing agent, how would you get the word out to buyers that a listing might be coming back on the market soon?
Personally, I favor those big lights in the sky myself. Those honkin’ beams. Our days in Sacramento are getting shorter. Maybe with a bat insignia, like Batman. But I don’t have any of those. Can’t remotely run a scroll across the bottom of anybody’s iPhone like a CNN ticker tape. So the next thing that’s available is to do two things:
- If the purchase offer was more than the list price, raise the price in MLS and
- Slip “bring backups” next to the pending status in MLS.
It’s like going fishing. (Increased sales prices tend to gather more attention in MLS than a price decrease.) Minutes after that’s done, low and behold, this Sacramento REALTOR got a bite. I received an email from an inquiring buyer’s agent. She had shown a particular home in Sacramento to the buyer, and the buyer was very disappointed when it suddenly went into pending status, like they’re all doing right now. The buyer wrote an offer as a backup offer. Tip: To write a backup offer a seller can legally sign, one needs to submit a document that puts the offer into backup.
The seller signed the backup offer and issued a Notice to Perform to the buyer’s agent. The buyer failed to perform, so strings were cut and the new buyer slipped into place without this home ever going back on the market. So, if you are a Sacramento home buyer you might ask your buyer’s agent to glance over at MLS inventory several times during the day to see if there are any homes in pending status in which the seller wants a backup offer. This just might be your lucky day to buy a pending home in Sacramento.
