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Don’t Make This Sacramento Home Seller’s Mistake
Nothing speaks louder than real-life stories of home seller’s mistakes in Sacramento real estate and, in some cases, it’s pretty tragic. Further, being an optimistic person who tends to focus on just the good stuff, I don’t ordinarily talk about the home sellers who “go south” (no offense to you Southerners) but sometimes the stories ought to be expressed.
I share this particular story in hopes that some other home seller in Sacramento will be spared. First, let’s set some misconceptions aside. In today’s Sacramento real estate market, often the first offer is the best offer you’ll ever get. You should negotiate with that offer and not shrug it away because you didn’t like the sales price. Sellers can harbor futile hopes that another buyer will pay more but that and a quarter won’t buy a Starbucks. The first offer you receive might be the only offer you will get.
Second, after you hire the best Sacramento real estate agent you can find, you should stick with that agent. Don’t listen to those who will try to persuade you that you can pay less and get more. Where in the world does that philosophy work? You tell me because I’ll go to that store. There is always a tradeoff.
A seller begs to go on the market. Needs to sell because she is getting a divorce and cannot afford the house payments. She has equity. The problem with her home is she bought it thinking she was moving into a certain neighborhood, a desirable neighborhood but, for whatever reason, she was misled. She bought a home in a neighborhood that was not so desirable, yet still close to the more popular area.
These types of homes on the outskirts are very difficult and challenging to sell at prices within the skirts. Although an appraiser who is unfamiliar with the neighborhood will use comparable sales in the more desirable area, buyers often won’t make offers in that price range, and therein lies the problem. Besides, there are real estate agents who know the boundaries of neighborhoods, even if the buyers do not. A home on the outskirts could be worth $25,000 up to $100,000 less than other homes located within that 6-block radius.
This seller received an offer that would have paid off her mortgage, all of her closing costs and give her a little pocket change. She refused the offer. She was indignant. A short while later, she asked to cancel the listing. Big home seller’s mistake. I will always cancel a listing for a seller, though. I am not one of those agents who hangs on to the listing with her teeth and makes everybody angry. I just let it go. Besides, people have their reasons. Maybe they no longer want to sell. Or whatever.
Which is what this seller told me. However, soon after the listing was withdrawn, it was back on the market with another agent. The seller said her ex-husband wanted to hire a different agent, but it was difficult now for me to trust anything she had to say. The relationship between a listing agent and a seller is a fiduciary and built on trust. If the trust is gone, the relationship does not exist. She also mustered the nerve to ask if I would give her my photographs because she did not like the photos taken by her new agent. What?
In any case, her home is now pending as an approved short sale. She could have walked away scott-free but chose this path herself. It makes me wonder why people do this. I take no pleasure in her misfortune. In fact, it breaks my heart. I hope it never happens to you. Because you know what they say, you can learn from your own mistakes, but it’s much better to learn from somebody else’s. Don’t make these kinds of home seller’s mistakes.
How to Keep a Home on the Market in Sacramento After Offer Acceptance
I am finding that overall, many buyers are not very committed in our Sacramento real estate market. That’s a good reason to keep the home on the market after going into contract. Part of the reluctance to commit, I’m supposing, comes from the fact they feel pressured with multiple offers happening on such a large number of homes, and it’s frustrating that they have very few homes from which to choose. This is a scary market for first-time home buyers. We’ve never had a market like this in my lifetime before in Sacramento.
We have low prices but they are moving upwards quickly in some neighborhoods. Interest rates are historically low, around 3.75%, which is just incredible. A buyer’s purchasing power is immense. They can buy twice the home for half the money today, as compared to 7 years ago. But they have also witnessed first-hand the crash of the real estate market, and some of them feel very uncomfortable navigating in unchartered waters. It’s not unusual to go into escrow one day and then have the buyer cancel the next. This is why you want to keep the home on the market if at all possible without immediately jumping into pending status.
Home sellers in Land Park had this happen to them a while back. They negotiated in good faith an agreed-upon sales price and were relieved and thrilled that their home was sold. But, the following day, the buyers bailed. They didn’t give a good reason. See, that’s the thing, in California, a buyer can pretty much cancel a contract for any reason within the inspection period which, by default, is 17 days.
The next time we received an offer, the sellers were more cautious. The buyers wrote a clean offer, but until they removed the contingencies, the buyers could easily cancel. Their agent wrote an addendum containing verbiage about cancellation that was already preprinted in the purchase contract, and that’s part of what made the sellers worry. Agents don’t always think about how their addendums will be perceived by the sellers when they are trying to appease the buyers. But if the buyers require reassurance about cancellation rights, this makes the sellers understandably nervous. So, the purpose of the addendum backfired.
How to fix it was my quandary. Part of the solution was to keep the home on the market in active status. Once a seller takes a home off the market and then puts it back on the market, buyers begin to wonder what is wrong with the home. Why didn’t the buyers want to buy it? Did they uncover something horrible about the home? Is there a structural defect? When the truth is half the time “back on market” status is just due to flakey buyers: you’ve got the blind leading the blind. It’s much better to keep the home on the market for a while.
In a seller’s market, removing a home from the market takes it out of inventory, and it’s difficult to drum up enthusiasm for the home if it goes back. Especially in a seller’s market, it is much better for the seller to leave the home on the market in active status. However, a Sacramento real estate agent must present a true picture in advertising. This means we have to tell buyers that we have an offer. I accomplished that by adding a Pending Rescission modifier to the active status. In the confidential agent remarks, I suggested that agents write a back-up offer subject to the cancellation of the existing offer.
The sellers received a back-up offer, too. That’s because everybody wants something that somebody else wants. That’s a true principle that applies to real estate.
The sellers countered the buyers that they would leave the home on the market and remove it once the buyers had removed their contingencies. This way, everybody won, and the sellers felt more agreeable to accepting the offer.
If you’re looking for an experienced Sacramento real estate agent who puts her clients’ needs first and foremost, call Elizabeth Weintraub at 916.233.6759.
