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Can We Still Keep Looking After We Buy a Home in Sacramento?
Your homebuying days should come to a close when you’ve found a home to buy — which should put a stop to such questions as can we still keep looking after we buy a home in Sacramento? But it doesn’t. Buyers in Sacramento still ask those types of questions. They don’t know. I call it the red shoes syndrome for first-time home buyers. The question nags at them as to whether there is a better home that maybe they just didn’t have a chance to see.
The thing is there will always be a chance to buy a home Sacramento. Maybe not today and maybe not tomorrow. Maybe next year a home will come on the market that might have better suited a buyer’s fancy, but should they wait? That would be a year without a home. The problem is they want the perfect home, and there really is no such thing as a perfect home. There is the grass looking greener on the other side, though.
Home buyers will be much happier if they review their reasons for buying a home in Sacramento. Then consider what kind of trade-offs they will make to find the home of their dreams. Maybe the dining room will be smaller than they had hoped, but if everything else fits their requirements, it’s possible that they should probably buy that home. Especially if it’s in the right location because you can’t move locations.
Homes also tend to have voices, whether a buyer realizes it. From the moment buyers step into a home, they form an impression, but it’s malleable. It can get better or it can worsen. Buyers should not have to talk themselves into wanting to buy a home in Sacramento. It’s much simpler than that. They either want it or they don’t. If they want that home, then the very best thing they can do for themselves is to buy it and stop looking. To continue looking is fruitless and leads to disappointment.
It’s called making a decision. If you “sleep on” trying to decide, it’s possible that you don’t really want the home because you’re taking a risk that you could lose it.
Are You Really Prequalified to Buy a Home?
Just because a buyer is holding a preapproval letter from a lender, it does not mean that buyer is prequalified to buy a home in Sacramento. Of course, the buyer does not understand that because, after all, the lender issued the letter, what could possibly be wrong with it? I don’t have enough time in the day to talk about how many things could be wrong with that preapproval letter, but I’ll tell you this, no seller wants to find out in underwriting that a particular problem exists that should have been discovered before the darn approval letter was issued in the first place.
If you think these kinds of thing don’t happen, then you don’t work in Sacramento real estate. Faulty preapproval letters are almost becoming the norm. Each one is different, so a seller needs to read the letter to figure out if the lender even has a loan application from the borrower. The lender might not. The lender is not required to obtain a loan application in person prior to issuing a prequal letter.
We are presently working with a very sweet couple who hope to buy their first home soon. Like most first-time home buyers, they are filled with the excitement and a little bit of stress over finding a home. The home buying process is very new to them, and they aren’t sure where to start, but they knew enough to go to their local credit union and a major bank to get a loan pre approval letter before calling me.
Hot off the presses from the credit union, that pre approval letter was their ticket to viewing homes — because it meant they could finally write an offer if they fell in love with a home. The major bank was issuing the preapproval letter as well, although it seemed to be delayed by a few days. It takes only a few hours to get a preapproval letter from our preferred mortgage brokers.
Just to compare rates and service, we suggested the buyers call Dan Tharp at Guild Mortgage. He handled the refinance for my home a long time ago, and I’ve referred Dan Tharp for years. Honest, ethical, hardworking, devoted to the mortgage business and extremely smart. He verified the buyers and guess what? They are not pre-approved. The credit union made a big mistake. The buyers verified this with the credit union as well. They didn’t just take Dan’s word for it, although they could have. Because now Dan is helping them to fix that roadblock, and they will be back on the road to home ownership in no time at all.
Just because you are holding a pre-approval letter, it does not mean you are actually pre-approved. Not even if it comes from the biggest credit union in California.
Buying That Perfect Home in Elk Grove
Matching first-time home buyers for a home in Elk Grove with an experienced real estate agent is a brilliant way to pair the innocence of younger buyers with the wisdom of the grouchy. Because an experienced agent will just lay it on the line. Buy the damn house before somebody else snatches it from you, we’ll tell buyers. Why would we be so direct whereas another type of Elk Grove real estate agent might suggest buyers go home and sleep on this monumental decision?
Several reasons. First, been there and done that — painfully watched buyers lose the home of their dreams. It’s not true that every suburban house, for example, looks alike. Homes in Elk Grove differ from each other, sometimes dramatically, including location. Which is the second reason. When a house is special, generally agents can spot it way before the buyer will realize it.
I’ve talked with agents who know that their buyer is making a mistake when writing an offer to buy a home. The buyer either takes too long to reach the conclusion that an offer should be presented, or the buyer often doesn’t offer enough to beat out competition. Buyers don’t seem to get it that if they are out looking at homes, other buyers are, too. If they like a home in Elk Grove, other buyers will like it, too. These agents silently hope the buyer will learn the lesson early on and not get mad at the agent when the offer is too low and unacceptable.
Sometimes, listing agents will suggest a seller set a date for reviewing offers, but that strategy can backfire. It can also cause buyers who otherwise might have paid more not to make an offer. In today’s Elk Grove real estate market, it is better for sellers to deal with the offers as they arrive. If the home in Elk Grove is very desirable, priced right and comes on the market at the opportune time with a huge splash, that home will attract multiple offers without advertising for it.
If you see such a home, don’t go home to sleep on it. Ask your agent to call the listing agent and find out how many offers the seller has received. Write the very best offer that you can, and don’t hope, for goodness sake, that you can offer list price and buy the home. It doesn’t matter if the offer to purchase is cash, either.
Let’s just put it this way. You would be amazed at how many buyers in the $500K and up market are paying cash right now. They are not screwing around with non-conforming loans or whining about fluctuating interest rates. They are offering to pay all of the seller’s closing costs and paying over list price, when the home in Elk Grove warrants it. (That “when” is the important factor. Most homes sell for less. Look to your agent for guidance.)
If you know that you can put your lips together and blow to whistle, you are savvy enough to buy that home of your dreams. Just do it.
Flippers Rule in Some Sacramento Markets
June is shaping up to be a pretty good month for my real estate closings. I’ll probably have more sales close in June than any other month this year. I just closed a regular home sale in Curtis Park. This was a beautiful brick home in the St. Francis Oaks subdivision. Everybody who saw the home said pretty much the same thing about it: it was gorgeous but it wasn’t updated enough for their tastes. So, it sold to a flipper. I am seeing many homes in Sacramento sell to flippers nowadays, which is a stark contrast to 5 years ago.
It’s a challenge to negotiate between the two parties, to give a flipper enough room for a profit and to give a seller enough money to make the seller happy. But that’s a challenge I tackle day-in and day-out. My seller’s happiness and satisfying my seller’s goals is paramount to me.
It’s rare to sell a home in Sacramento over $300K without updates to a first-time home buyer. Like I’ve said many times, it’s the Sacramento flippers who originally focused on foreclosures who are to blame for the changed attitude of today’s buyers. There are tons and tons of rehabbed homes that have been resold. I’m not saying there is anything wrong with it because flippers have taken older, abandoned homes in disrepair and turned them into turnkey homes for first-time home buyers. That’s a good thing.
Sacramento flippers are actually good for neighborhoods. They revitalize downtrodden areas. Goodbye boarded-up homes, hello sparkling new stucco and shiny gutters. But they also shape buyer’s expectations, often unrealistically.
It’s no longer enough to buy a home with good bones and potential. Buyers don’t want those homes. Not when they are tempted by all the rehabbed inventory on the market. So the only surefire way to move homes without updates, which are now called fixers, is to sell them at a discount to compensate. The problem that arises for sellers who want to fix up their own homes is a seller cannot compete with a flipper. Because the average seller can’t buy materials at wholesale, nor do most ordinary sellers have access to low-cost rehab crews.
If a seller improves a home for resale, the seller is quite likely to lose money on the sale. A seller doesn’t generally enjoy the profit margins that flippers possess. So, that means the homes that need updates are more often than not sold to flippers.
Last year my database held very few flippers. Not so today.
How Sacramento Flipper Homes Are Changing the Market
On our way home from the Tower Theatre in Land Park yesterday, my husband and I stopped at the Target store on Broadway. I didn’t want to go in, but he made me. I don’t enjoy the Target shopping experience like he does and, besides, they moved everything around since I was last there back in the Stone Ages. We walked by the Mother’s Day card aisle. This was the middle of afternoon on Mother’s Day. It was crowded with people looking at Mother’s Day cards. I wanted to stop, thrust my hands to my hips and yell in a very loud voice: REALLY? You can’t get it together before Mother’s Day? You wait for the last possible moment?
I refrained because I know that other people are not always organized, we all lead busy lives with not enough time for the essentials, and I should not be judgmental. Or, maybe I felt that way because first-time home buyers in Sacramento are developing such high expectations that I want to strangle some of them. Buyers are pretty darned judgmental. Don’t get me wrong, Sacramento home buyers have a right to be judgmental, it’s their home, but some of those judgments are being manipulated.
I know this because 4 or 5 years ago, a buyer would walk into an older home in Land Park, East Sacramento or Curtis Park and ooh and ah over the architectural features and original detailing. Buyers loved to caress the stained wood doorways, tug on the tassel lights, admire the basket-weave tile in the baths. Now, they walk into the kitchen featuring an original washboard sink and blurt, “Whoa. This is not Elk Grove. Where are my granite counters?”
And you know where they get this idea? From the investor flippers. There are so many flipper homes in our marketplace right now, tearing the guts out of homes, stripping these historical legends down to the studs, and pouring in cheapass materials, installed by cheapass labor. Buyers don’t know if there are a swarm of termites in the kitchen walls, and they don’t care because they are loving those granite countertops.
If you are buying a flipper house, be careful. There are many flipper homes in Sacramento in 2013. Some of these homes were ruins that investors picked up for pennies at foreclosure auctions on the courthouse steps. These types of homes could have sat untouched and vacant for years. You don’t know if there is mold in those homes or if they were flooded, vandalized or smeared floor-to-ceiling with feces. I’ve sold some of them in that condition, and I know what they look like.
Throw on a coat of paint, refinish the hardwood, stick in the Ikea cabinetry, replace all of the appliances with low-end new and voila, you’ve got all these flipper homes ready for the market. Because first-time home buyers will buy the bells and whistles.
The flipper syndrome affects our Sacramento marketplace because the landscape of our marketplace is changing. If your home doesn’t have updates, it’s considered a fixer and first-time home buyers will pay a lot of less for it. We can thank the flippers for that attitude.
If you’re looking to buy or sell a home in Sacramento, call Elizabeth Weintraub at 916.233.6759.
