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Buying a Sacramento Home Subject to a Sunday Open House
Sunday open houses tend to attract buyers in Sacramento.
Dear Sacramento Buyer’s Agent:
Thank you for showing my listing and asking about how the seller will handle offers with a Sunday Open House on the horizon. Oh, and thank you for sharing your buyer is fully qualified through The Internet Lender. I would be remiss if I didn’t share my opinion of The Internet Lender. It doesn’t necessarily mean your buyer is qualified. We’ve all had transactions with internet lenders fall apart because the monkey, excuse me, I meant monkeyfied mortgage loan officer, did not take the time to thoroughly scrutinize the loan application.
Further, these types of internet lenders often end up with out-of-area, and by that definition, non-qualified, appraisers. We all know where the rabbit hole that leads, but I’ll spell it out. Low appraisals. Unhappy sellers. Kicked out into the street buyers. Your buyer might get an edge if she were to get qualified with a local lender, which tends to carry a lot more weight with experienced listing agents and their sellers than an internet company. This is just a suggestion, not a requirement. Unless it is, and we’re just not telling you.
We also expect to receive multiple offers, so a list price offer probably won’t get her the house. We are holding the home open on Sunday, and there is no guarantee the seller will take an offer before the open house, although I will send an offer immediately upon receipt. You never know, the seller might take it. Then again, maybe not. I may advise against it.
My suggestion is you write the offer as though it is already Sunday afternoon, and we’ve held the Sunday Open House. You may want to advise your buyer to put her best foot forward in that offer because she might not get a second chance. There is no guarantee a seller will consider a counter offer. Much of the time in these situations, I see sellers just take the best offer. On page 9 for acceptance of offer, you might give us until after the Sunday Open House for a decision . . . so your offer doesn’t expire, of course.
Moreover, the home is sold AS IS. Although we are not aware of anything wrong with it, you and I both know a home inspection will reveal a bunch of defects. Please be advised the seller will not issue a credit, renegotiate the sales price nor make repairs. It is best if the buyer is prepared in advance to accept the fact there might be a few things he or she will need to later on fix. That is an ongoing fact of life, btw, whether it’s a house or yourself.
Reasons Sellers Might Reject Purchase Contracts in Sacramento
Sellers reject purchase contracts for many reasons during multiple offers.
After receiving a dozen offers for a home in Sacramento, a seller is poised to reject purchase contracts, there’s just no way around it. Sellers might want to sell the home to every single buyer, but that’s impossible. They can pick only one. Of course, it doesn’t mean they can’t send multiple counter offers to every buyer yet, again, that’s not always reasonable. Most sellers tend to pick 2 or 3 offers to counter, which means the bulk of the offers, while reviewed and considered, are unacceptable.
As a top Sacramento listing agent, I see many situations in which sellers reject purchase contracts. I provide guidance, but I do not choose the winning offer, even when the seller begs me to just pick one, I don’t do it. And, yes, sellers have asked me to choose for them. I say the obvious: it’s not my house. I have a 6% interest in the sale but they have 94%, so their opinion is a whole helluva lot more important than mine.
I do realize that sometimes buyers in Sacramento are reluctant to submit an offer when they figure there might be multiple offers. But the way I’ve watched multiple offers work lately, an agent could receive 10 or more offers but only 1 or 2 are competitive. So the odds are if you submit a competitive offer, your offer won’t be among those that cause the seller to reject purchase contracts.
So, why do sellers reject purchase contracts? Let’s look at a few generic situations that could cause such rejection in a multiple-offer situation. I never provide specific reasons for rejection because it’s not any of my business and it is bad risk management.
Offers at list price or slightly above list price by a few thousand. It doesn’t matter if this type of offer is cash or 100% financing. If you truly love the home and see that many other buyers do, judging by the number of cards on the kitchen counter, the number of people crowding the open house, or simply the appeal and price, an offer at list price or slightly above is rarely enough to generate excitement for the seller. One certainly would not offer list price and an hour later send a revised offer to reduce it, under any circumstances, yet people drink the Kool-Aid anyway.
VA offers in which the buyer does not agree to pay for a pest completion nor compensate for certain fees the buyer cannot pay. For example, a VA buyer cannot pay for escrow, which is customarily split 50 / 50. But a VA buyer could split the owner’s title insurance instead to make up for it.
FHA offers with less than 20% down. Particularly FHA offers with 15% down. While a buyer is free to put down any amount, it makes a seller wonder why a buyer would put down 15% when 20% down would eliminate mutual mortgage insurance premiums. One reason is perhaps the maximum loan a buyer can obtain is with 15% down, and that’s all they have. So they can’t pay more than list price nor bridge a gap in an appraisal. Even 3.5% down buyers might have more money available than a buyer with 15% maximum.
CalHFA loans or any type of first-time home buyer programs that provide the funds for the down payment and closing costs, on top of adding an additional layer for a second approval. Sellers wonder who buys a home without any money? How tight are the ratios? Could any little thing cause the transaction to blow up based on thin margins? This is not a judgment on CalHFA loans, btw, which are perfectly acceptable loans for first-time home buyers who need them.
If you take any combination of these reasons sellers reject purchase contracts, it can compound the rejection and cause an offer to fall to the bottom of the pile.
Are You Struggling to Buy a Home in Sacramento?
Team Weintraub is kicking butt and taking names this month. We always do well in Sacramento real estate, but it’s refreshing and even more exciting to excel in a market that is tougher than nails at the moment. It’s super hard to buy a home in Sacramento during a seller’s market. Especially when we have so many buyers vying for the same listings. But the Elizabeth Weintraub Team seems to possess the knack, the expertise and, honestly, just the good fortune, I suspect, to be winning multiple-offer situations.
Part of this could be because we know what is important to sellers and we give it to them via the offers we write for our buyers. We know how to satisfy what sellers want. The reason we know this little fact is because I personally list and sell a ton of homes in the Sacramento area, and I freely share seller expectations with my Team Weintraub members. When you know what sellers want, you know how to write a purchase offer that will give the buyer an edge over all of the other buyers. Plus, everybody knows we perform on our word. We are accountable for our actions.
It also helps to know what a strong listing agent expects, and it starts with a clean offer. No missing pieces, I’s dotted, initials in place, earnest money deposit, proof of funds, and a preapproval letter — not from some fly-by-night place. I swear, the other day I hear from a mortgage broker that his buyer who is about to close escrow has had a short sale a short time ago and now can’t qualify for a conventional loan. Well, I’ve got news for ya buddy, the buyer never could qualify for a conventional loan under those circumstances and that question should have been asked in the interview / application process and, if it was, you should have known Freddie Mac would require seasoning on those gift funds. Ack.
The offer should also be submitted to the listing agent within the time frame for acceptance. Some agents openly invite multiple offers by specifying a time for offer presentation in MLS, but that’s not a practice this Sacramento Realtor endorses because it turns off some agents and buyers. Not everybody is competitive nor enjoys competition like some of us, and I’m not naming any particular name here like myself; but the point is I don’t want to discourage any buyers from writing an offer on my listings. Besides, nothing looks goofier than touting all offers will be presented on Sunday and here it is two weeks later and the home is still for sale.
Every first-time home buyer has a chance to buy a home in Sacramento, even in a multiple-offer situation. The mindset is not to think about all of the other offers and focus solely on what you are able to do. If you want to buy a home and to align yourself with an experienced real estate team like the Elizabeth Weintraub Team, then give us a jingle at 916.233.6759.
