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Buying a Sacramento Home Parked in Shadow Inventory
When inventory is low and the quality of available homes for sale in Sacramento is spotty, it might seem like there are no homes to buy, but that’s because nobody is looking at the shadow inventory. Shadow inventory can be defined as a lot of things — it can be homes that have been foreclosed upon and not yet on the market, or it can pertain to the pending sales, active release, short contingent and temporarily off the market listings, among other select status modifiers.
You might find gold in those listings.
I’ve noticed that some real estate agents are diligently digging through MLS to try to uncover shadow inventory for their buyers. Buyers can’t find these listings on their own, for the most part. Oh, they can find homes that closed escrow a few months ago on websites like Trulia and Zillow, but much of that stuff is dated. Even our own MLS, MetroList, hides the status of some listings down at the bottom on the right-hand side, so buyers get all excited and think homes are available to buy when they are actually under contract.
This is when it pays to get in touch the listing agent to find out whether the agent and her seller might welcome a backup offer. The thing about a backup offer is it guarantees the buyer that nobody else can step in to snatch the home should the existing pending sale blowup. If the existing buyer cancels, a backup offer, properly prepared, would put the second buyer into first position, effectively locking out the competition.
You might wonder how many pending sales blow up? It’s hard to pinpoint exactly but it’s not unusual for some listings to sell 3, 4 or 5 times before they close. Part of that problem is unscrupulous buyers writing more than one offer when they can’t afford to buy two homes. Part is due to tightened lending restrictions. Whatever the problem might be in an existing transaction, having a backup offer can give the seller peace of mind and it can also be a bonanza for a buyer who missed out on making an offer for that home.
If a buyer has not lifted contingencies and the transaction is still influx, it might be a good idea to check out a few pending sales to see if there is an opportunity lurking in the shadow inventory for you.
How to Lose Your Dream Home in Sacramento
There are times in this business when home buyers ignore the essence of time and wrongly believe that they have all the time in the world to decide whether they want to buy a particular home in Sacramento. The constant that is sure to happen, even if a home has been on the market for a year, is the minute one home buyer decides she might want to buy it, so does another. I can’t explain how or why it happens but it does.
It’s not a trick. It’s not a listing agent trying to get more money for her seller. Nothing up my sleeve, I swear.
Such was the situation with a home that closed escrow this month. I first started talking with the seller about this home a year ago. He is retired and volunteers on government issues in Washington, D.C. He had never seen the home, and it has always been a rental property for him.
I inspected the home in Sacramento and found the living conditions to be substandard. The carpeting required replacement, the walls and cabinets needed repair and paint. Bottom line, the only way he could sell that home for a decent price would be to get the tenant out and fix it up. His property management company wasted about half a year to remove the tenant. No idea what’s so hard about giving 60 days to move.
I sent a handyman over to fix up the home and get it ready for market. First buyer in escrow could not qualify for a loan, some little glitch at the last minute prevented him from closing. Back on the market. A few months later, another buyer made an inquiry and wrote an offer through their agent. Although I warned the buyer’s agent that the seller would want list price, the buyer had other ideas.
It took the buyer another week to write a series of counter offers and to eventually end up at the place where the buyer should have been in the beginning. We asked for list price and no concessions. Pretty simple. But the buyer wanted to negotiate. By the time we got to the third offer with the buyer, or maybe it was the fourth offer, I don’t recall, I had uploaded all of the paperwork to DocuSign for the seller.
At that very moment, a full price cash offer arrived for this home in Sacramento. Cash is not always king anymore, but a full-price cash offer does tend to rule.
So, the moral of this story is the seller elected to ignore the first buyer’s final offer, which met all of his demands, and accepted instead the full-price cash offer. Those buyers were so close to buying what they continued to insist was their dream home. They lost it. One minute they were celebrating that the seller was about to accept their offer, and the next they were crying. I felt empathy for them because they were a young family with another baby on the way, but I didn’t represent them. I represented the seller.
Trade Secrets for Listing Photos of Sacramento Homes
I didn’t believe it myself when I heard it, but a seller recently asked me to list his home yet insisted that I use photos he shot with his cellphone. Stuff like the back of his sofa. A shot of the pool with the garden hose lying tangled in mud on the sidewalk. A half-cocked angle of a dark hallway. They were dreadful photos, but apparently some sellers think a crooked roof-line is an acceptable practice when it is obviously not. The guy wouldn’t listen. I threw a few of those awful photos on MLS, his home in Elk Grove withered on the market for a few months, and then he asked me to cancel because “nobody wants to buy it.”
For crying out loud, nobody wants to go see that mess. That’s the problem. You’re not trying to sell the home online; the object is to entice buyers to view the home in person.
Another seller in Elk Grove first couldn’t sell her home before she came to me. She had it listed with another agent, and after looking at the photos, I could see why. I told her I didn’t want to bad-mouth another agent but those photographs were hideous and why didn’t she see that in Trulia or Zillow? You’ve got to wonder about some sellers and why they don’t complain, or at least I do. Then she hit me with the fact they were HER photos — again, shot with her cellphone. What the? I invested my time to take professional photos with my Nikon, color-correct, brighten, and her home sold.
It’s not just the professional photography that sells homes in Sacramento. It’s the type of photographs, how they are tweaked in Photoshop and the order in which they are uploaded to MLS. Some Sacramento real estate agents get it and some do not.
I ran across an article this morning by an agent in Atlanta who gets it. She mentioned that emotion is a quality she injects into her listing photos, and that is absolutely an essential ingredient. It’s something that can’t be taught. It’s a connection to the property. Now, I know that sounds squirrelly and maybe woo-woo but it’s precisely how I shoot photos of homes. I want to take the internet buyer by the hand and gently lead her through the home, showcasing all of its special features and views.
For example, I listed a lakefront home in Elk Grove, and shot a photo of the lake as viewed from sitting at the dining room table and also while rinsing dishes at the kitchen sink. I walk the buyer through the home, into the entry, the view of the clerestory windows, through the living room and into the kitchen. Photos are interspersed throughout with views of the lake because the entire reason to buy this home is to live on the lake.
I want the first photograph in MLS to entice, and I try to arrange the order so the buyer will feel inclined to click through all of the photographs and be left with a lasting final impression of arousal — which doesn’t mean inserting a photo of the trash cans. It’s just like writing. If you don’t capture the reader in the first sentence, she won’t read the next paragraph or even your entire article. If you’re looking for a Sacramento real estate agent who cares deeply about her photos of Sacramento homes, call Elizabeth Weintraub at 916.233.6759.
How to Sell a House With a Bad Roof Without a Loss
Just because your home has a bad roof is no reason not to put it on the market in Sacramento right now, because this Sacramento real estate agent can sell your house with a bad roof without a loss to you. Believe it. I can get a brand new roof installed for you. No fuss, no muss, no upfront cost. Overcoming challenges and working around issues is one of my specialties. You don’t have to pay for this roof out of your pocket, either. There is no credit inquiry. You can have bad credit or no credit.
How does this miraculous thing happen? It happens because I have established relationships with roofing companies who know that when I list a home for sale, that house will sell. These roofing owners have confidence in me and my abilities to sell homes in Sacramento, not to mention, my track record speaks volumes. I don’t sell one house every 4 months like most agents — I close an escrow on average every 4 days.
The cost for your brand new roof will be paid from the proceeds of sale at closing. The roofing companies will wait to get paid. It doesn’t cost you anything extra, either. You’re not paying for the zero interest, and you’re not even signing an agreement. The bidding process is competitive. You are free to discuss costs and get other bids yourself as well.
It doesn’t get any better than this. It’s just one out of many services I offer my sellers that other real estate agents probably haven’t even thought about. If you have a bad roof, I’ll take care of it.
I just closed on a home in Carmichael a few days ago that had a bad roof. It was a trust sale, and the executor had never lived in the home. The roof was at its end of life, and there was quite a bit of dry-rot that I could view from the ground. The seller did not want to put any extra work into the home and preferred to sell AS IS. However, an AS IS sale would cost him a lot MORE than the cost to replace the roof. It actually saved him a lot of money to replace the roof during the sales process. Buyers don’t know how much a roof costs. Buyers might want to ding the seller’s price by $40,000 to $50,000 sometimes, when it costs less than $10,000 to replace an average roof.
Plus, now we could market the home in Carmichael as having a brand new roof! The roof over a buyer’s head is very important. A roof over your head is a reason to buy a home. If the roof is in excellent condition, it can protect everything else in the home. Not the very least of which, for a seller, a new roof protects the seller’s bottom-line profit. If your home was built prior to 1990, you probably need a new roof. Call Elizabeth Weintraub at 916 233 6759 for help in selling your house, bad roof or not.
How Not to Flip Your Sacramento Home
Can you make $100,000 profit on a Sacramento home you bought last summer and flip it? To clarify the answer further, let’s say the home was purchased at market value, the price at which most homes in Sacramento sell. Forget about the fact that the home abuts a gated community, and it’s not actually located in the gated community but instead is situated on a busy street with traffic. The caller wanted to know if she could make $100,000 profit, darn it, she wants to flip. Flipping the home is her goal because she and her husband no longer want to own this house.
Why don’t they want to own the house they bought only last summer? Because the work commute to San Francisco is too long. The sellers underestimated how gruesome it would be to drive 2 hours each way every day to go to work. So, now it is imperative that they make $100,000 profit and dump what they view as a bad decision. They’ll just flip it. They watch cable TV.
I tried to explain to the seller — without looking up the sale of her home or anything about it — that our market experienced its big appreciation in 2012. The first half of 2013 brought more appreciation and we saw another leap. But we’re pretty much done jumping around at the moment, and the market has been fairly stable since last July. I wondered what she thought would make her home worth $100,000 more than she paid for it, plus the costs of sale to flip it.
To get the answer, I go where I usually go when I’m looking for horribly bad property information that is widely available to the unsuspecting public — which is Zillow and its Zestimate. Believe it or not, this time Zillow wasn’t that far off on value, maybe by only $20,000, so it wasn’t Zillow’s fault. I pulled up listings in MLS to see what else was for sale in her neighborhood because sometimes it’s another home for sale in Sacramento that makes sellers think they can get more for their home. Hey, it’s down the street and on the market . . .
They don’t always realize that people can ask whatever they want. They stick any old price tag on it and find a real estate agent who is willing to list that home for sale. Sometimes, believe it or not, that Sacramento real estate agent could even be me as I don’t always turn down overpriced listings with potential — because those homes could sell someday for less, and I’d like to be that agent when they sell. It’s not my home. I do inform my sellers if I believe the price is too high, but it’s always their call because it’s their property.
Sure enough, I found a home for sale that is listed at about $100,000 more within a half-mile radius. It has a ton of upgrades. Quiet street. Nicer location. Bigger property, single level, and in fact wasn’t really a comparable sale at all in the world of Sacramento real estate. The potential seller who contacted me had a solution for this though, she could put in $50,000 to remodel her home and then she could make $100,000. Is she a professional flipper? Don’t think so.
And this is what HGTV has done to the minds of otherwise normal people.
The difference between me and the other two real estate agents she called? I talked to her. But my name would be mud if I encouraged her, and that’s just not the right thing to do. It means I won’t get the listing, but that’s how it goes.
