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Why Condition Matters When Selling Sacramento Real Estate
Condition of property is one of the big three elements when selling Sacramento real estate— or any home in the Sacramento seven-county region — but it’s often overlooked or dismissed by sellers. They get used to their house the way it is. They might say something like, “Oh, we’ll let the buyer take care of that issue.” Unless the house is pretty much a tear down, or needs such extensive work that we call it a fixer home, a home buyer will not do those repairs / corrective work. End of story. Only an investor will buy that kind of home today. And investors aren’t paying full price this spring.
The three key elements for selling a home in Sacramento are:
- Location
- Condition
- Price
You can have a great price at market value that would apply to a turnkey home in a fabulous sought-after neighborhood, and it still won’t sell because the home is not fixed up. You can have a great price for a good location and a home in move-in condition, and the home won’t sell if it’s located in a bad place like under a freeway or next-door to an apartment building.
If the home needs major work, you should just do the work before putting that home on the market or else adjust the sales price accordingly. If the home is located in a bad location, your sales price also has has to come down and be adjusted for that location. You can’t get top dollar for a beautiful home in a bad location. You can’t get top dollar for a fixer home regardless of its great location.
These are the rules of real estate. I don’t make them up. These rules are not something this Sacramento real estate agent has plucked out of thin air or can bend at will but that’s the way some people react to the news.
The only way you’re getting top market value for your home is if that home has a great location and is in top condition. You need all three elements to command the top of the market, even in a seller’s market.
Buyers want a turnkey home in a good location, and they don’t want to do any work. If you’ve got ugly carpet, you need to replace it or be prepared to be hit with a lowball offer that will far exceed the cost of replacing that carpet.
Picking the Buyer When Selling Homes in Sacramento Could Violate Fair Housing
Regular sellers with equity — and even sellers of homes in Sacramento who end up doing a short sale — can choose their buyer and establish requirements that the buyer must meet. You know why they can do this? Because they own the home and, with some legal exceptions, sellers can decide what kind of person buys it.
This is not to say that a seller can discriminate against any of the protected classes under the Fair Housing Act. For example, a seller could not say I am interested only in selling to a family with kids or to a guy in a wheelchair. You can’t pick a protected class and exclude others or vice versa. This is yet another reason to hire a top Sacramento real estate agent because agents are supposed to know, understand and follow the Fair Housing Act, among other regulations.
I’ve personally had buyers say to me they did not want to buy in a neighborhood in which minorities of any color live and, believe it or not, I have stopped the car and told them to get the hell out. Fortunately, we were still in the parking lot and not on the W / X freeway. They can go find some redneck yo-yo to work with them, but not this agent. Sadly to say, there is always some doofus moron who doesn’t give a flying fig about Fair Housing, but I’m definitely not one of those.
Sellers are allowed, though, to choose an owner occupant, for example, over an investor. I asked our lawyers. That’s almost a moot point as most of the investors have left the market in Sacramento, which leaves a bit of breathing room for Sacramento home buyers now, but it’s good to know. Btw, if you see that sales are down by 1/3rd, it’s because the investors have split. But some are still hanging out, writing lowball offers in hopes that if they throw enough crap at the wall, something will stick.
If you want to ensure the quality of your neighborhood and care enough to please your neighbors when you depart, then you might want to consider selling to an owner occupant over a buyer who will rent out your house. Even if that home needs fixing up, a rental investor is not always the answer. Whenever there is an increase of rentals in a neighborhood, the value of the other homes around it tend to go down.
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.
Multiple Offers: Does it Matter Who Buys Your House?
Depending on to whom you speak, my position as a top Sacramento real estate agent could be enviable or unfortunate when it comes to giving my sellers intelligent advice about multiple offers and helping them to decide who should buy the house. After all, it is the sellers’ decision. It doesn’t matter if the home is a short sale or a regular equity sale, who buys the house is still the sellers’ decision. The seller owns the home and the seller is in control, making all decisions. I’m just that yappy little Yorkie in their corner trying to help them to make the right decision — which is the decision that is best for the seller.
As such, I sometimes slip on my sellers’ shoes, although I don’t walk very far in them. Like those Lady Gaga shoes. I’d probably break my neck trying to walk down the front steps in 7-inch heels. I step into my sellers’ shoes at times because I want to make sure they consider all of the information they need to make an informed decision and not just pluck a number out of the basket of multiple purchase offers.
You might be thinking, what’s the deal? The seller should take the highest offer, end of story. However, please hang on and bear with me; I propose there is more to the story. Whomever buys the house is the person who will take care of that house after escrow closes. After the agents collect their commissions, the seller pockets that big fat check, the keys tossed into a kitchen drawer and, lights out, everybody goes home happy as little clams, who bought the house might matter.
Was it an investor or an owner occupant? Why do you care? Does it matter who buys your house?
You care because it’s your neighborhood you are leaving behind. Your neighbors and probably your friends, the community in which you served, built memories and forged lasting relationships. Some of us believe we have a responsibility to leave the world in a better place after we touch it. One by one we can make a difference in our communities. We can help to transform and improve or we can help to destroy.
Sometimes, it’s as easy as deciding between what you would want for yourself if you were the person left behind. Or, what would you like to see in the neighborhood where you move? Do you want to move into a neighborhood as a homeowner in which half or more of the homes that were once owner-occupied have been converted into rental properties?
There are large groups of non-local investors buying up huge chunks of Sacramento for rentals and they are changing the face of Sacramento. These corporate investors are paying cash and do not always offer market value, either. Lately, I’ve been receiving lowball offers from these groups. Some are brash. I see unreasonable demands. And they are turning our neighborhoods in Sacramento, block by block, into rentals, away from owner-occupied homes, which once reflected our pride of ownership. Do first-time home buyers stand a chance against these cash-rich bullies? Who is helping the little guy to succeed?
Before you sign that purchase offer, think about does it matter who buys your house. You might have a choice. Consider what your mother might say. Then do the right thing.
