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Raising the Sales Price When a Home is Overpriced is a Bad Idea
Raising the sales price when your home doesn’t sell because it’s priced too high for the market is a screwball strategy that some sellers employ for various unknown reasons. Well, if you ask the seller he might say that a home down the street, for example, was just listed at a higher price, which in his mind would justify the price increase, even though it’s the wrong way to look at it. If anything, an overpriced home down the street will make a reasonably priced home sell faster.
Homes that are for sale in Sacramento are not necessarily homes that are for sale. The list prices of those homes are pretty much meaningless and carries little weight if there are no offers. A sales price is an enticement, like bait on a fishing hook, but there is no guarantee a fish will bite it. Not only that, but it might be a plastic lure disguised as a tasty treat. Not every home that has a for sale sign in the yard is a home that is for sale. That’s where home buyers’ and home sellers’ perceptions can slide sideways.
What matters are the pending sales and the sold comparable sales because those are the homes that real home buyers have purchased. Those prices are indicative of the marketplace. They show what another home is worth.
Then, you’ve got condition. A home in poor condition will not be attractive to many first-time home buyers. Investors in today’s Sacramento real estate market want a good deal, and to the investors I talk with and receive offers from a “good deal” means paying less than market value.
Bottom line is in today’s fall Sacramento real estate market, when you’ve hauled in a big fish and it’s flopping about in the boat, the thing to do is knock it over the head. You don’t throw it back in the water when you plan to eat it. You don’t say you need to catch a bigger fish if it meets minimum catch guidelines. And you don’t raise the sales price because you don’t have any offers.
Give home sellers enough time, and they’ll come to that conclusion on their own. The thing is they generally end up paying for those decisions.
Why the Time to Buy or Sell a Sacramento Home is Now
Clients have been asking lately if the end of summer of 2014 is a good time to buy or sell a home in Sacramento, because they are wondering whether prices will continue to rise. If we have collectively learned nothing from the market crash years of 2006 to 2011, it’s that prices will not always continue to go up. I’ve been advising clients all year to sell now or buy now and to not wait until 2015, and that’s not just because I’m a Sacramento real estate agent who stands to make a buck or two.
It’s because I watch and analyze the market. I sell a lot more homes than your average Sacramento agent, and I see first-hand a lot more activity than your average agent. It doesn’t matter all that much to me whether home prices go up or home prices go down, like that Eddie Murphy movie, I will still be in business. People are yakking that Sacramento home prices have risen only 8% and lamenting that figure instead of rejoicing. I am very happy with the market prices lately because they’ve made huge gains over the past 2 years. Enough so that many homeowners are pulled out from being underwater — no more short sales, thank goodness — and scores of Sacramento homeowners are able to sell and move up.
All of a sudden, like an overnight magical fairy-wand tap on our chimneys, many sellers have an additional $100,000 of equity that they didn’t have a few years ago. Even sellers who bought a home in 2010 and 2011 are able to sell now. All of those foreclosure buyers and short sale buyers are morphing into equity sellers in this new Sacramento real estate market. Interest rates are incredibly low, and I can tell you this, they won’t stay there forever. You can get a loan around 4% right now, and that gives you heart-pounding savings. Don’t be crying a few years from now when interest rates are up to 5% or 7% or worse.
Once rates begin to edge up — and interest rates absolutely will rise — watch out, because Sacramento home prices will feel the affect. The impact of interest rates on the rise is huge, for example, each 1/2 percent interest rate increase can lose a buyer roughly $25,000 of purchasing power. What do you think that kind of rate increase will do to home prices in Sacramento? It will suppress prices a bit, sure, but you’ll lose more disposable income through the interest rate increase. Overall, your payment will be higher than it will be today.
You’ve got a window of opportunity right now to sell a home in Sacramento and capture the momentum of our upcoming fall market in Sacramento — which is the second hottest real estate market in Sacramento. It’s also an excellent time, due to low interest rates, to buy a home. Are you in or you are you out? Call me, Elizabeth Weintraub, at 916.233.6759.
How Soon Should You Call Your Sacramento Agent?
A potential seller called yesterday to ask how far in advance she should talk with an East Sacramento agent about putting her home in Elmhurst on the market. She didn’t want to jump the gun or make too many plans before they were ready to sell, but on the other hand, she wanted to be prepared for the sale and have some kind of idea how much she might net from the sale.
One of the things she expected to do was replace a deck because she thought the buyer’s lender would force the repairs. See, the thing is unless it’s attached to the house, it probably won’t be considered for the pest report. Besides, a seller’s opinion and a buyer’s opinion might differ, so this is where consulting a local real estate agent comes in. An experienced agent’s advice can be invaluable.
It’s never too early to talk with an agent. I am working with some sellers months in advance of selling a home in the Sacramento area. Some homes are occupied by tenants, and it’s almost always better to show that home without a tenant in it, so we wait for leases to expire. Other sellers have personal family situations that make home selling at the moment difficult but easier down the road, not to mention, there is such a thing as timing the market in Sacramento because our spring and fall markets are the strongest.
We have cutting-edge echnology at our disposal in real estate. You might use Skype to to chat with your kids across the country, but a Sacramento real estate agent will use FaceTime to take an out-of-area seller on a tour of their home. I FaceTimed sellers in Texas yesterday and was able to show them mold in the bath, potential dry-rot on the eaves, weathered cabinets, a cracked tile, overgrown vegetation, and literally walk them through their home in Elk Grove as we talked, without them physically present.
If you’re thinking about preparing your home for sale and want to work with an agent, one of the services we provide is helping a seller get ready to sell. You can call this Sacramento real estate agent, Elizabeth Weintraub, at 916 233 6759. It’s never too early to talk.
Rising Home Prices in Sacramento Knock Out Short Sales
Short sales are soooo 2012. When a reporter called to interview me a few weeks back, she asked if I am seeing appreciation in Sacramento and, if so, how much. How much are homes appreciating? Trying to put a finger on the exact amount is difficult without reviewing the variable stats, but my gut said double digit. I wanted to say in the 20% range but I didn’t reach out that far; although, in hindsight, it would have been accurate.
There are so many ways to show and predict the real estate market in Sacramento. You can look at month-over-month numbers and year-over-year, and compare square-foot costs to closed sales, you can manipulate the crap out of numbers to make them say just about anything you want them to reflect. You can say sales prices are going up because homes sold for more this month than they did last month, but that doesn’t take into account the fact that we have fewer homes for sale or more homes or that sellers are moving up and those are not first-time home buyer numbers, and so forth.
What I am seeing all over the board is the fact that rising prices in Sacramento are putting sellers into positions of equity. These are sellers who would have been a short sale candidate last year but this year they are sellers with equity. While they might have been kicked under the table by buyers in March of 2012, this month buyers are handing them real silverware, placing linen napkins in their lap and popping the cork. Sellers with equity are back.
When I get a call from a seller asking if I will handle a short sale for them, the first thing I do now is establish whether they have to do a short sale. Because you know what? They might not have to do a short sale. Many of these sellers are finding that they qualify for a regular sale. Even sellers who are behind in their payments are finding investors who are willing to make up the back payments, bring them whole and even put some money into their pockets — after all is said and done and closing costs are paid.
Is it obvious to everybody? I wouldn’t be writing this if it were. I see it. I see it even if the comparable sales don’t support it because I have special glasses, the kind that see through walls. Not really, but I do spot certain instances that others can’t seem to see. I know which way the wind is blowing. I sold over $32 million last year, and that’s a lot of homes — I see a lot of action. If you are wondering whether you need to do a short sale or if you can sell with equity, you should call this Sacramento real estate agent, yes, me, at 916 233 6759. I might be able to sell your home without it being a short sale.
And wouldn’t that be a fabulous thing for you? Relief might be right around the corner. Get a jump on it. Call Elizabeth Weintraub at 916 233 6759. I love my job, and I’m happy to talk with you.
Should You Notify the Bank Your Home is For Sale?
Should you notify the bank your home is for sale when you’re selling as a short sale? Clients sometimes confuse my role as a Sacramento real estate agent with that of a lawyer. I have fiduciary with my clients and am their advocate 100%, no doubt about it, but I can’t give them legal advice — even if I know the answer. Because even if I know what seems like a reasonable answer, if it’s a legal answer, it might not be the best answer, and it certainly doesn’t take into consideration all of the finer nuances of law much less the client’s particular individual situation. On top of that, believe it or not, I don’t have a license to practice law.
So, I freely tell clients that if I so much as address what seems like a solution to their dilemma, they should get legal advice and not rely on any of those words that may or may not fall by accident from my lips.
The question I get asked a lot is whether a client should notify the bank that his or her home is for sale. First, think about all the things that can go wrong in the world of business and commerce. How often do you make a request that is carried out in the manner in which it was requested? Probably not very often. Second, consider the fact that if you’re behind in your payments, for example, the department that has mostly likely been assigned the task to get that payment is the collection department. The collection department might be located in a different building, perhaps a different city than the department that escrow or your Sacramento real estate agent would speak with.
These two departments rarely speak to each other or even communicate with each other. They post notes in a computerized file sometimes, but that would take a person capable of accessing the correct file on top of actually reading it to decipher. That’s probably not gonna happen, I mean, let’s get real.
The collection department, if a seller is delinquent, wants the seller to make a payment. The collection department is not likely to say, “Oh, why didn’t you tell me your home was for sale? We’ll just slink away and leave you in peace.” They are like a horse racing at Santa Anita. They just want to get to the finish line, and that’s the focus, to get a payment out of the seller. There is no other focus. There is no human element of caring and compassion.
Why do people want to think that banks are compassionate? Where do they get this idea?
If I stopped making my mortgage payments, I’d immediately change my phone number. I’d notify the bank it’s not allowed to call me at work. In fact, I’d change all of my communication preferences to mail. Snail mail. Through the U.S. Post Office. But I’m not a seller who is delinquent. I’m just a Sacramento real estate agent who will say what the hey; it can’t hurt to call the bank and let an employee know. For all the good it will do. Yet, there is that 1% chance it might make a difference, so, go ahead and call. At least once.
