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Why Selling Sacramento Homes to Neighbors Can Be More Difficult
Selling Sacramento homes to neighbors can sometimes mean lower values.
The longer I’m in the real estate business in this town, the more I see why selling Sacramento homes to neighbors can be difficult. For starters, let’s say the neighbors already own a home. They want to sell and buy a bigger home in the same neighborhood. Of course, when their home goes on the market, it’s worth a lot of money, so much money that even Trump would have a hard time describing how much money that home is worth, and if he isn’t the worst liar in the world I don’t know who is. I got a big kick out of Jack Ohman’s editorial cartoon yesterday: excuse me, I have to take this call from Winston Churchill, heh, heh.
I’ve been so busy selling homes that I haven’t paid attention to the value of our own house. Like the shoe cobbler’s kids going barefoot. A lender appraised our home in Land Park yesterday for more than double its original sales price. My immediate reaction was we need to dump this house and move out of the state. Which is what we did the last time this happened, now that I think about it. The problem is there are not very many places we can go to in California that will allow me to continue selling Sacramento homes. So I think we’ve gotta stay put.
It got me to wondering, though, how many people would buy back their homes at today’s values? Would you, if your home suddenly doubled in value? Would you buy your neighbor’s house if it were similar? See, I’m finding that selling Sacramento homes to neighbors is a lot more difficult because they live in the neighborhood. They are too close to the way things used to be or the way they think things are. It’s a commonality that prevents some neighbors from seeing value.
Almost every time that I receive a lowball offer from some potential buyer, it’s a neighbor. Somebody who doesn’t see the value in the home. And then invariably we sell to a buyer from another neighborhood, possibly a buyer who wants to move up into an area they perceive to be better. All those reasons that make a certain neighborhood more valuable than another, like, say, conforming homes, better school districts, pride of ownership, desirable location, those things are readily recognizable by a buyer from outside of the immediate vicinity but not necessarily afforded a lot of credence by those who live there.
Perception often lies in the eye of the beholder, yet even if you’re Donald Trump, it doesn’t alter facts. It’s a challenge selling Sacramento homes in this market because of low inventory, as readily available comparable sales might not be present over the past 3 months. To determine value, you’ve got to rely on principles of substitution, and not every agent knows how to compute those values. They are trained to look in a half mile radius and if they can’t find a comp, they give up.
I recall a sale in Davis for about $1.5 million a while back, and all the agents I spoke to in Davis said it could not be done and the value was not there. When I sold that house at list price, they wanted to know if it was a neighbor who bought it because no such neighbor would do such a thing. Yet, it sold for cash. To a buyer who recognized the value. A buyer from the vicinity but not directly in that neighborhood. I saw the same thing happen with a couple of luxury sales in Riverlake, too. It’s like some close-knit communities seem too close.
Just throwing it out there for consideration. Just because a neighbor can’t recognize value doesn’t mean it doesn’t exist.
Highest Sales Price $1,085,000 Closes in Riverlake Sacramento
Pool at 774 Still Breeze in Riverlake Community in the Sacramento Pocket
There are many ways to sell a luxury home in Riverlake, Sacramento, that involve overcoming objections to a low appraisal, which is why I employ different strategies for my escrows depending on the circumstances at hand. It’s a custom-designed strategy, I guess you could say. I won’t sugarcoat the process and say it’s completely stress-free for sellers, but like childbirth, I think they focus more on the end result after it’s over.
I recently closed two waterfront homes in Riverlake, almost directly across the water from each other. The first home was in Cobble Shores and smaller than the second home in Stillwater. The views were different as well as the home in Cobble Shores enjoyed a north facing view of the water and the back yard of the home in Stillwater faced south. Personally, I prefer the south-facing view.
I spent a lot of time working on the sales price before I met with either of the sellers. Most sellers already have an idea of how much they want for their home, but they also appreciate hearing my opinion of value and how I arrived at that number. I’m generally very close to market value, closer than they are. I take into consideration market movement, buyer desires, the emotional portion, and then temper it with reality of the closed comparable sales. Having a good story ready for the appraiser is always important.
Sure enough, the home in Cobble Shores at Riverlake sold at list price of $895,000 within 6 days. That’s a good length of time to be on the market. Enough time to let everybody know the home is for sale and to give all buyers a chance to bid. The home in Stillwater at Riverlake was more expensive, more than $1 million, and we had a decent amount of showings, even without a lockbox. It was an impressive home that captured the waterfront lifestyle in just about every room.
The sellers interviewed a fair number of agents to list their home and settled on Elizabeth Weintraub. I felt a kinship with them, and maybe that’s what pushed them to list with me but it could also be my analytical mind. I constantly think about my listings and don’t run on autopilot; and I focus on selling, no matter what it takes. I scrutinize every single detail. I’m fanatical that way.
Sure enough, we sold the home in Stillwater at Riverlake Sacramento, after 9 days of showings and, sure enough, as I predicted, we received a low appraisal. I sensed that the appraiser used a particular pending sale’s square footage, applied the number to the square footage of my listing and came up with a value that did not really take into consideration its top-of-the-line upgrades. The appraiser also used homes 15 miles away on the Garden Highway. I suggested the sellers hire their own appraiser, because even though the buyer’s lender would not accept the appraisal, it would prove a point.
The new appraiser just happened to be the appraiser who originally appraised those homes on the Garden Highway, so she immediately eliminated them from the appraisal because they did not apply. She came up with an estimate of value much higher than the original appraiser, using homes closer in proximity and employing the principle of substitution. After much negotiation, we settled on a higher price with the buyer bridging the gap in cash. The difference in cash paid for my full-service commission and then some. It sold at $1,085,000, the highest price we have seen in Riverlake.
If you are looking for a Sacramento Realtor who is willing to do what it takes to sell your home, give Elizabeth Weintraub a ring. Selling your home is not just a job to me; it’s a passion, and I do it well. 916.233.6759.
