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Cannot Get Off the Plane Without a Buyer Cancellation
Welcome to the Sacramento fall real estate market and the increasing likelihood of a buyer cancellation. No sooner did my plane land in Sacramento last night than I received a buyer cancellation. Couldn’t even get off the aircraft without a buyer flaking. Buyers are dropping like flies lately, left and right. One listing I’ve put back on the market four times. Count ’em, four times. That’s just nuts. The seller can’t believe his eyes. And it’s almost never about the property itself as it is about the buyer’s insecurities, confusion and ultimate inability to perform.
Now, I don’t hear these sorts of stories from my team members. On the Elizabeth Weintraub Team, I take the listings and my team members work with our buyers. Every once in a while they might work with a buyer who freaks out over a repair and elects to cancel, but it’s not happening at the rapid pace for them as it is on my listing end. So, that makes me wonder if other buyer’s agents aren’t qualifying their buyers or providing adequate counseling.
Hate to admit that the art of real estate counseling as taught almost 50 years ago is truly a lost art among many agents in this day and age. Such a shame. Charles Chatham should be rolling over in his grave.
The buyer cancellation I dealt with last night was on a property that took the buyer almost two weeks to decide to buy. Who waits two weeks to figure out if they should make an offer? In a market of limited inventory, rising prices and increasing interest rates? Probably a buyer who is not all that committed to start with.
If we sold real estate in Sacramento like they do in the Bay Area, this stuff would not be happening. When a buyer makes an offer in the Bay Area, typically that buyer receives upfront disclosures and reports to review. They also don’t employ a ton of weasel clauses like we do.
While in Hawaii, I’d been corresponding with Ken Harney at the Washington Post, after he reached out to me. Mostly to talk about why the public can’t view ethics violations at NAR. But also about our squirrelly local real estate market, which reflects what is happening nationally. He calls the Bay Area its “own separate universe,” and he’s right.
We’ll see how things go this weekend. This week has been fairly quiet, and often the first Sunday after Labor Day is busy. Keeping a buyer in escrow is tricky at best. And the real bummer is the listing agent has absolutely zero control over a buyer cancellation. The listing agent doesn’t talk to the buyer, can’t advise the buyer, and needs to remain hands off. Which means the person responsible for the buyer is the buyer’s agent.
Some buyer’s agents don’t even have the decency to call listing agents to discuss. Nope, they just shoot over the buyer cancellation in an email and call it a day.
How a Sacramento Realtor Had to Sell the Same Home Seven Times
No Sacramento Realtor in her right mind sets out to sell the same home seven times. Especially not over the course of the last 5 years. But that’s exactly what happened with this particular home in Sacramento. Yup, I had to sell the same home seven times. The first escrow happened in 2012, and it was a short sale at that time. The roof leaked terribly, lots of dry rot and it was difficult to find a buyer. That was basically the last year in Sacramento for short sales. People were turning to buying homes with equity by then.
Naturally, this meant I had to weed through 3 different sets of buyers, three different escrows, just to get to closing. You get the first buyer just to put the bank on notice that you’re doing a short sale. The second buyer replaces the first when the first buyer runs off to buy something else because they can’t wait. Then the second buyer waits long enough for the bank to respond before that buyer bites the dust. Finally, the third buyer piggybacks off the previous work, and that buyer closes escrow. That buyer was a flipper.
You’d think I would be done with this house, right? The flipper is gonna hire his own agent to sell when the work is finished. But no, along comes a buyer who calls and was dying to see the house. By now, the roof had been replaced, and an addition jumped the square footage from 1,400 or so to over 2,000. We warned the buyers not to buy a flipper, but they did anyway. The sellers had to tent the house prior to closing. So this is how I sold the house 4 times so far. Three more to go.
Fast forward to last fall when the buyers called and needed a larger home for their family. We sold them a home in El Dorado Hills, IIRC. We came on the market in November and went pending almost immediately, within one day. The buyers were madly in love with the house, and everything was going really smoothly. You did not think I would have to sell the same home seven times, but these 5th buyers, alas, were not our buyers. In the end, they couldn’t qualify for a loan.
Back on market again. I pulled a new MLS number to reset the days on market and make the listing more appealing to eager buyers. Because it was close to Christmas, this next go-around took a week to sell to the 6th buyer. We had 2 offers, one from the agent from hell. Fortunately, I don’t work with very many agents from hell, but this one, let’s just say there wasn’t any disappointment when we sent the Withdrawal of Counter Offer because the second offer was better. A well known colleague in my office represented the 6th buyer. What could go wrong?
Plenty, it seems. We never found out really what the buyers’ problems were or why they canceled. After a couple of weeks in escrow, they seemed to have developed cold feet. I rarely point the fickle finger of fate at the buyer’s agent when this happens because I doubt the agent was thrilled with the change of events.
My sellers were simply devastated. I felt their pain, and it made me pretty sad, too. I want my clients happy and excited, not depressed and desperate. I cheered them up the best I could and tried to paint a rosier picture of the future. I assured them, absolutely without doubt, I would sell it again, and it would close the third time. They know I don’t make promises I can’t keep. We pulled a new MLS number to reset the days on market again. Keeping up my sellers’ spirits when the unexpected happens is a huge part of my job. It’s emotional management. Not every agent is good at it.
Sure enough, within 24 hours, back in escrow. The 7th set of buyers, thank goodness, were represented by a strong Team in Sacramento. There were plenty of issues such as why we couldn’t find a building permit. Why the shower floor needed to be torn up. Why several of the pest reports contained conflicting information. But I was able to explain everything in such a way that the buyers accepted the home in its AS IS condition and still agreed to pay list price.
This home closed escrow last week. It’s how I ended up having to sell the same home seven times. I made no money on the first sale because it involved 6 months of work and it was a short sale. I didn’t make much on the second sale because my buyer’s agent got the biggest cut. But I finally got paid on the third sale after 2 failed escrows. This is how an agent can sell the same home seven times and not really make any money. Now that I reflect on it. LOL.
