Email Elizabethhome buyers in sacramento
A Second Chance for Cold Feet Home Buyers in Sacramento
The Sacramento Regional Transit Light Rail passes between Ella Dining and Brasserie Capitale.
When one door closes, another opens and gives home buyers in Sacramento a second chance. I admit that I was a bit bummed yesterday when a previous client bailed on listing his home to sell to some stranger he met in the street, on top of They Might Be Giants canceling the show in Berkeley, but I solved that disappointment by focusing on other things. Things you can’t change you need to let go of, immediately. Especially in Sacramento real estate. But that thinking does not apply to canceling a transaction because home buyers in Sacramento have cold feet.
It makes me wonder if buyers who have canceled transactions for my sellers over petty issues later regret those actions. We are closing an escrow next month that I had to sell twice because the first set of home buyers in Sacramento elected to cancel escrow. They expected the seller to replace the entire fence, which was not only unnecessary but an odd request to receive.
Other buyers who canceled a transaction a few weeks back decided yesterday that they should now buy that home. This could be a dilemma for the agent. I mean, what do you do when the buyers have canceled once? Do you give them a second chance and hope they don’t do it again? Probably not. Not without some sort of assurance or guarantee that the same situation won’t repeat itself. However, due to limited inventory in Sacramento, once buyers are in escrow, most buyers would do just about anything to stay there. If these home buyers in Sacramento understand our market.
I thought about that last night as I poked my lobster carbonara at Ella Dining Room and Bar downtown. Mustered all of my strength to twirl the hand-cut chitarra pasta around the butter-poached Maine lobster on my fork, dribbling with spring peas, which included a tasty bit of pancetta accentuated by spicy black pepper and stuffed it into my mouth. My team member and I advised the home buyers in Sacramento to sign a contingency release and include a Request for Repair for the already agreed-upon work to get back into escrow. We apologized profusely. These home buyers in Sacramento were ready to move forward and deeply regretted previous actions.
You don’t see that happen very often. Buyers who come to their senses. Or, sellers willing to take them back. But the sellers granted these home buyers in Sacramento a second chance yesterday.
I also tasted my husband’s artichoke and mascarpone tortellini. His dish featured a bluefoot mushroom so meaty and thick I forgot for a moment that I was eating a fungus. Between our appetizer and first courses, we were almost too satiated to finish our main courses. I’ve included a few photos below, just in case you’re getting hungry reading. I paired the lobster carbonara with a Patricia Green pinot noir from Willamette Valley in Oregon. I’m seriously enthralled with wines from Oregon lately, including the Hood River.
This was a nice ending to a day that started out pretty crummy. And our second chance home buyers in Sacramento are back in escrow.
Lobster Carbonara served at Ella Dining Room and Bar for Whole Hog Month at Ella in March 2016.
Artichoke and Mascarpone Tortellini served at Ella for Whole Hog month of March 2016.
Photos © Elizabeth Weintraub
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.
Three Things About the Sacramento Housing Market
As a blogging Sacramento agent, I try to narrow my blogs to a singular thought, but I have 3 things that keep popping up over and over in unison about home buyers in the Sacramento housing market — which, if I don’t discuss these 3 observations in one blog I might never get around to it. The first is the problem in Elk Grove. I’ve lost count of the number of offers I’ve negotiated for my last bunch of listings in Elk Grove that have fallen out and had to be sold a second, third or fourth time.
These buyers go into escrow and then immediately cancel, which tells me they are writing multiple offers when they can’t afford to buy each of the homes. Where do they get this idea? Do their agents encourage this kind of unethical behavior? Our market is not so hot that they need to do it. They can make an offer on the home they want to buy and probably buy it without competition.
I’ve seen some agents write into the offer that the buyer is making multiple offers, and I want to hug these guys. I’ve had other agents include an addendum that says the buyers are absolutely not writing any other offers and will wait for the offer negotiations to reach a conclusion before doing so. You guys can dance on my grave if you want.
The second thing I’ve noticed about the Sacramento housing market is VA buyers are becoming ubiquitous. I’ve always said if you want to buy a home with a VA loan come over and sit down next to me, and my sellers will gladly cooperate. I love love love VA buyers. Once you get a VA buyer into contract, they close and they don’t go wandering around open houses wondering if they’ve made the right decision. They understand what a commitment means. You can count on a VA buyer. They have integrity.
The third thing about the Sacramento housing market is about home pricing under the next price point. By this I mean pricing a home at $499K instead of $505K, for example. It could go one of two ways. Pricing at $499K might mean that home buyers will fight over it and bid up that price. On the other hand, a buyer might also lowball that price. They probably won’t offer $499K, though. It will be higher or it will be lower, and it’s not always easy to predict which way it will go, regardless of the home’s beauty and desirability.
In super hot seller markets in the past, a $499K listing would almost invariably sell for more. In buyer’s markets, it will fetch less. In this market, though, an agent can’t always accurately forecast because this is a fairly balanced market with no leanings either way, although our inventory is still relatively low. Inventory will get lower as we edge closer to Thanksgiving, but that’s a blog for another day.
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.
Where Do Buyers Come From for Homes in Sacramento?
When greed and the need for shelter love each other very much, buyers for homes in Sacramento pop outta nowhere. Well, that’s the answer my husband came up with when I posed the question to him — where do buyers come from for homes in Sacramento — but he enjoys making me laugh. On the other hand, sometimes sellers think we real estate agents hide buyers under our beds. I’ve heard sellers say that they did not want to list their home, per se, they just want me to bring them a buyer. Buyers come from listings, they aren’t under my bed.
It’s true that we have some buyers who will wait forever to find that special deal, but typically what these buyers want is a home under market value. They often don’t want to pay list price for homes in Sacramento, and they don’t want to pay what the home is actually worth. They often want to steal the home. And every so often, I run across a seller who wants a buyer to steal her home, and I put the two of them together, but that is not the norm. It’s not really how homes in Sacramento are sold. It’s not how Sacramento real estate works.
Our listing agreements contain a big ol’ paragraph about why pocket listings are not in the seller’s favor. Sellers ask me when they see that paragraph if they should be a pocket listing because they don’t understand the verbiage. I realize C.A.R. thinks they are doing a service for sellers but instead it’s complicated and convoluted, like anything becomes when a committee is involved in the decision. When I explain pocket listings to sellers, which I shouldn’t have to do because I don’t take them or believe in them under ordinary circumstances, sellers then ask me why anybody would ever do it. Mostly because they’re bamboozled, I guess.
And then they want to know whether I have a buyer for the home.
We Sacramento listing agents get buyers for a home after an agent lists the home for sale. The agent looks for a buyer when the homes goes on the market. Often, the buyers might find another agent to represent them, but we are actively looking for buyers every single day. That’s what listing agents in Sacramento do. We dangle that beautiful listing in front of the eyes of every single buyer we can find. It’s like fishing. When we get a bite, we reel ’em in and toss ’em into the escrow boat.
