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Are You Working With a Sacramento Realtor?
That is such a simple question, are you working with a Sacramento Realtor, but it is extremely difficult for some buyers to answer. I can see why, too. Because what does it mean? They don’t know. Does it mean they know a Sacramento Realtor? Everybody knows somebody who works in real estate in Sacramento, you can’t turn around in a crowded Midtown bar or slam a grocery cart into the checkout counter at Safeway without stumbling into a real estate agent these days.
Does it mean that you have a relative in the real estate business whom you might call to represent you to buy a home? Does “are you working with a Sacramento Realtor” mean you are beginning to dislike your real estate agent who has been sending listings but never calls or follows up to see if you’re ready to look at homes or offers any other kind of assistance to you? Maybe not. It’s complicated.
Basically, when an agent asks a home buyer are you working with a Sacramento Realtor, it means are you presently working with an agent or about to work with another agent who will write the offer for you? It could also mean have you signed a buyer broker agreement, in which case, even if you’ve changed your mind about working with that agent, you’re probably stuck with that agent and can’t choose somebody else.
When an agent asks if you are working with another real estate agent, just be honest. Explain your situation. Because the agent is asking in a roundabout way if he or she can write the offer for you. If he or she cannot write the offer for you and represent you, then the answer is yes, you are working with another agent. Be aware that Realtors are prevented from interfering with another Realtor’s client.
Sometimes buyers want to work directly with the listing agent because they wrongly believe they’ll get some kind of break or preferential treatment. Not much we can do about those disillusioned people. They tend to get what they deserve, which is not necessarily excellent representation. Don’t go that route. It doesn’t mean, however, that if a listing agent shows you the property that the listing agent won’t want to write the offer because the agent most likely will.
My team members are upfront when they talk to buyers. They say, if we show the home, we will represent you. Do you understand and agree to it? Or, are you working with another Sacramento Realtor? It’s OK, to talk about this, and it is imperative. Otherwise, you might end up in trouble over procuring cause. You can save yourself a lot of time and trouble if the agent who shows you the home is the agent who will represent you.
Discounting an Already Discounted Price for a Home
The thing about selling Sacramento real estate is the landscape and climate continually changes from year to year, the market is never the same. The only thing that manages to hold true is the shape-shifting of the challenges. We Sacramento REALTORS always tackle challenges, it’s the name of the game, they just change form.
A few years ago, it was things like the REDC Happy Thanksgiving short sale, in which the negotiator demanded that the seller stop celebrating with his family and start digging into his file cabinet for documents. On Thanksgiving Day. Today, most sales are no longer short sales anymore in Sacramento. They are regular equity sales with traditional sellers. Not only that, but our market has shifted a bit more toward normalcy, even with limited inventory; it’s more balanced.
Buyers seem to present more challenges. It’s like they are tiptoeing around on little mice feet, afraid of their own shadow. They make offers and then vanish. They don’t respond to counter offers and sometimes their agents go with them into that dark hole somewhere. One agent I have emailed, texted, left voice mails, over and over and nothing. Maybe she is in the hospital?
I am also hearing that some buyer’s agents do not present comparable sales to buyer before advising them on writing an offer. They tell the buyer to name a price. So the buyer looks at the list price and then deducts the (inflated) cost of upgrades and improvements the buyer would like to make. The buyer doesn’t realize the price might be a discounted price and instead might try to discount it further. Not to mention, upgrades don’t really factor in.
I’ve heard buyers sob, I would have to pay $50,000 to install a swimming pool so you need to knock 50 grand off the price. I suspect their agent is dying to say, hey, psst, this home doesn’t come with a swimming pool; get over it. But they smile and suggest that the buyer instead tour homes with swimming pools buuuutttt the buyer wants THIS home AND a swimming pool. I don’t envy buyer’s agents. They know a discounted price doesn’t often work.
Some fixer homes, well, they’re not every buyer’s idea of a new home. Buyers generally want to buy a home in move-in condition. This means the homes that need a bit of work can take longer to sell because they don’t appeal to everybody. But just because the days on market are longer than the flipper homes doesn’t mean the price isn’t right. The price might be just right.
What First Time Home Buyers Wanted 40 Years Ago
When it comes to talking about first-time home buyers and what they want in a home in Sacramento, my initial mission is to try not to sound like: you kids get offa my lawn; however, I’m afraid I’m about to fail that objective most miserably. This topic popped up because my sister in Minneapolis — who has absolutely no intentions of selling her home at the moment — is worried that it doesn’t have the things that first-time home buyers desire. It made me stop to think about what I yearned for in my first few homes. So here’s a trip down memory lane for ya, in no particular order:
Electronic ignition on a gas stove. Although I love the smell of sulfur, lighting a stove with a match is a big hassle. You’re always worried the box of matches over the stove might unexpectedly combust and burn down the kitchen. You also need a utensil into which you can deposit said burnt matchstick, and hopefully it’s not into the trash can when the matchstick is smoldering.
A doorbell. Old-fashioned doorbells were hard-wired and worked for years until one day they didn’t work anymore. All of them went ding-dong. The new fangled ones played goofy tunes, which was just plain stupid. Having a doorbell, though, beats listening to some stoner bang on your door yelling, Hey Dave, open up.
A built-in dishwasher. Truth be known, I would have been happy with a portable dishwasher, any place where I could hide dirty dishes and not have them pile up in the sink because I’m too danged lazy to wash them. Sinks used to have washboards that would allow water to drain from freshly scrubbed dishes directly into the sink, but then Rubbermaid came out with dishracks, which I always seemed to forget and leave under the sink when I moved.
Garage door opener. To come home from work on a cold snowy evening and be able to press the garage door opener button on my remote control was pure heaven. It was such a luxury to not have to stop the car, step into a wet snowbank, kick the garage door to loosen the ice and then tug it open, get back in the car, close the door and drive into the garage, narrowly missing the wall. In those days we parked without relying on a tennis ball hanging from the ceiling to tell us when to stop.
Indoor laundry. Apart from grocery shopping, I don’t know if there is any other task I detest more than going to the laundromat. If you don’t own a car, it was even more horrid because it meant you had to haul a basket of laundry, blocks away, filled with stinky clothing and hope you had enough dimes for the dryer.
Multiple phone lines. Coming from a suburban home in the 1950s that had a party-line, having a single line was heaven, but it was even more delightful to have phones in all of the main rooms of the house, including the bedroom. We’re not talking about Caesar’s Palace with phones in the bath here, that was ultra luxurious. If a phone line didn’t work for some reason, Ma Bell would come out and fix it for free.
Dual baths. I don’t know when it became more fashionably correct to say “bath” instead of bathroom, but it’s definitely considered taboo to add the word room to the bath in marketing materials. I lived in so many homes with only one bath, and I have no idea anymore how I managed or if we just peed in the yard and I wiped living like an animal from my memory banks.
Automatic ice makers. My parents used to call our refrigerator the icebox, from back in the day. About once every couple of months, we’d heat hot water on the stove, pour it into metal ice-cube trays and place them in the freezer to defrost it. My job was to hack away at the frozen blob with table knives. Then, I’d refill the trays with cold water to make ice-cubes and try not to slop it on the floor while transporting said trays to the freezer and tripping over a dog.
Air conditioning and central heat. When I bought my first home, I took out a separate loan to pay to remove a gravity furnace, this huge asbestos octopus that took up so much space in the basement, and installed central air and heat. I don’t know how I survived summers as a kid without central air. We didn’t even use window air conditioners, just floor fans and spent a lot of time running through lawn sprinklers. Which brings me to . . .
Automatic lawn sprinklers. Not having to remember to water the lawn, much less grabbing a dirty hose, dragging it across the lawn and hooking it up to a sprinkler. Then, trying to set the sprinkler head while it is spraying its 180-degree direction without getting soaked yourself is a feat in itself. Today the gardeners deal with the sprinkler system if it malfunctions, and I never hear it inside my home with dual pane windows.
I am hopeful this blog will resonate with today’s first-time home buyers. Many home buyers in Sacramento today crave the shiny stainless appliances, the oiled-bronze hardware, the granite counters, the hickory-plank flooring, ceiling fans (without those dangly lights on pull cords), and Wolf ranges which they will rarely turn on, coupled with SubZero refrigerators in which to store leftover pizza. And my job as a Sacramento real estate agent is to help them find and acquire their heart’s desire, whatever that yearning may be.
Which Sacramento Home Buyers Get the Short End of the Stick?
For years, first-time home buyers in Sacramento were getting the short end of the stick, and in many ways, they still are. That’s because sellers and listing agents tend to prefer the so-called stronger buyers, which would be the home buyers with cash or those obtaining conventional loans with substantial down payments of 20% or more. Me? I don’t really care as long as the buyer can close escrow, and therein lies some of the problem.
Can the buyer close escrow? I’ve had some CalHFA buyers flake out at the last minute, due to some sort of snafu or tiny change in their financial situation. These are buyers who might not have a down payment and need down payment assistance and, if they don’t have money for a down payment, they might not have any money for closing costs either. Is that a crime? No, Sacramento home buyers can still get 100% financed loans and sellers can agree to subsidize their closing costs.
But the rules to qualify are still stringent for Sacramento home buyers with marginal assets. Then there are problems that could arise if the lender calls for repairs. If the seller doesn’t want to make those repairs, it can fall to the buyer to complete them. If the buyer doesn’t have any money, that’s kind of a tough situation. It doesn’t mean the CalHFA buyer can’t buy a home, but it could be a long road, with many rejected offers before finding a seller who will cooperate.
VA buyers fare slightly better because they aren’t receiving secondary financing to fund a down payment, the twist is they are just not required to make a down payment. Some see VA buyers as better credit risks because the bar seems to be set higher. Again, though, there are sellers who are reluctant to sell to a VA buyer, but that’s generally due to being misinformed. They think it will cost more or some crazy notion. I love to be in escrow with VA buyers on my listings because I’ve never had any of them fall out, and they all close escrow.
Can’t say that about CalHFA Sacramento home buyers buyers. But that doesn’t mean I would ever advise a seller not to take an offer simply because the buyer was obtaining down payment assistance. Everybody deserves to achieve the American Dream.
Why Your Mortgage Lender in Sacramento Matters
Out of the 7 closings this Sacramento real estate agent is working on this week, only 2 transactions, according to the mortgage lenders, are closing are time, which makes closing delays pretty much par for the course for this week. Why? Because of the mortgage lenders. A few of the escrows are delayed because the buyers could not qualify for a conventional loan and were informed at inception that they should choose FHA but instead opted for conventional. Or, at least that their mortgage lender’s story and the guys are sticking to it. In others, everybody else thought somebody else was doing a job that nobody else was doing. Total cluster-you-know-what.
It’s also possible that the buyer’s agent felt the buyer didn’t stand a chance in hell of getting an FHA offer accepted upfront so the agent wrote the purchase contract with conventional terms and obtained the preapproval letter showing conventional financing, figuring who gives a rats if the transaction doesn’t close on time. But most buyer’s agents aren’t that devious. I suspect the truth of why some mortgage lenders can’t perform lies somewhere in between.
When a buyer runs past the closing date, the contract has expired. The seller has the option to cancel the transaction. The seller is not obligated to give the buyer more time to close the escrow. A lawyer might argue on behalf of the buyer and say the buyer invested money for the home inspection, paid for a pest inspection, perhaps other reports, and showed a good faith effort to close. She might say it’s not the buyer’s fault that things were delayed in underwriting or the mortgage lender messed up.
But that’s a tough argument if the contingencies haven’t been released, and the seller might believe the buyer is in breach of contract. The seller might give the buyer a Notice to Perform and then cancel. And let’s face it, many first-time home buyers barely have two nickels to rub together, and they can’t afford to hire a lawyer. So, they better choose a mortgage lender who can properly advise them and then follow that advice.
Here is my advice for home buyers today. For crying out loud, mortgage lenders all have access to pretty much the same ol’ bag of money, and you’re not gonna save 1/2 point here nor there, so pick the mortgage lender in Sacramento who can perform. Pick the company that won’t lead you astray. Pick the loan officer who will have your back. Don’t go with the guy who dishes out apologies when you’ve lost the house.
In all of my years of working with and referring business to Dan Tharp, this mortgage lender in Sacramento has never disappointed.
