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What Sacramento Buyer’s Agents Want to Know
As a listing agent in Sacramento, I hear almost immediately from a lot of buyer’s agents when any of my new listings hit the market. Ding, ding, ding, my phone rings, one call after another. Especially if the listing is priced well and a turnkey home. The first thing agents want to know is if it’s still available, even if it’s only been in MLS for 30 minutes. That’s not as unusual as it may sound because my photos look enticing, the marketing verbiage is attractive and, in our competitive market in Sacramento, sometimes buyers don’t view the home before writing an offer. With digital online signing services such as DocuSign, buyers can quickly sign an offer within minutes for submission.
Of course, I check the Supra lockbox online showings to determine if the agent representing the buyer has entered the house. But that doesn’t tell me if the buyer was with the agent at the time. The buyer could live in San Francisco for all I know, but I can get a clue from the address on the buyer’s preapproval letter or earnest money deposit check. I can also just ask the agent. This is part of the information I pass on to my sellers as together we analyze the purchase offers.
The second thing buyer’s agents want to know is how much their buyer must offer to buy the home, on top of how many offers we have received. I will answer the third question but not the second, unless the seller instructs me to do it. And since it’s not really in the seller’s interest to disclose how high a buyer needs to go, few sellers will give me the go-ahead, yet buyer’s agents will still ask about it. They need to study the comparable sales and act accordingly; do their job.
Buyer’s agents will say: My buyers really wants to buy this house, so tell me how much they have to pay to get it. Well, I don’t know because it’s not my house. That’s the seller’s decision, and the seller probably doesn’t even know. If there is financing, the home needs to appraise. Moreover, if I tell that buyer’s agent how much everybody else offered, then I have to go back to all of those other agents and tell them how much the other buyers have offered. I can’t treat one agent with preference over another agent. They wouldn’t like it if the tables were turned and it was done to them. I am a REALTOR, which means I have to abide by the Code of Ethics, and I must treat all parties fairly.
It’s not just a made-up code that nobody follows.
The Waiting Period for Multiple Offers in Sacramento
How many purchase offers does it take to sell a home in Sacramento these days? Maybe a better way to put it is how many days should a seller wait to accept an offer after receiving the first purchase offer?
An agent in San Jose called Thursday afternoon about a listing in Elk Grove that went on the market on Monday. I informed her the home was pending. Wha? She was shocked. She stuttered, “Bu bu bu but, it was ONLY three days — THREE days!!” What can I say? Indeed, some agents have been sleeping under a rock. Another agent called to say her clients had finally looked at the home Wednesday night and went home to sleep on it. When they woke up Thursday morning, they decided they would like to make an offer. Except now the home is pending. How is this my fault, I want to know?
If a person is seriously searching for a home to buy, that person receives listings directly from MLS through their Sacramento real estate agent, and they study those listings every single day. Buyers can opt to receive listings more often than once a day as well. Then, when they find a home, they need to be Johnny-on-the-Spot, run over, inspect and write.
The problem with most purchase offers is the offer itself is good for only 72 hours. So, if a seller receives an offer on Monday, to keep the offer alive, a seller needs to respond by Thursday, typically by 5 PM. Although, few homebuyers want to wait 3 whole days for an answer. It makes them antsy and agitated. I mean, what if it was you? Would you want to wait 3 days for an answer?
Usually the first day or two, offers come in from buyers who have not viewed the home. Many of these types of buyers are investors, with the bulk hailing from the Bay area. These people are hopeful that if they are the first offer, they will get the home, and that’s not really how it works. If the buyers haven’t seen the home, their offer does not hold as much validity as the offers that arrive on Day #3 and Day #4. After a while, all of the offers are about the same. There will most likely be a lot of cash offers.
Is it worth your time to write an offer on Day 4 when the seller has multiple offers? Depends. What do you have to offer that hasn’t already been offered? It should probably be cash or at least over 20% down conventional, in this market. Because the seller doesn’t really need 50 offers. The seller needs the offer that is the best and the offer that will work for the seller.
Are You Wasting Your Time to Write a Purchase Offer?
Even with the temperature in Sacramento hitting 108 yesterday, people were still outside, running around and looking at homes to buy. What’s a little dry heat to us in Sacramento? Doesn’t slow a Sacramento resident down one little bit. The heat also matches the temperature of the real estate market; it’s so hot your fingers sizzle when wet.
I received phone calls, emails and text messages all day from other real estate agents and from buyers. When I explained that in case they had been living under a rock, or maybe in Stockton, our real estate market is producing multiple offers for highly desirable homes, some of them were displeased. Not every home on the market is popular. Those owners of unpopular homes are unlikely to receive multiple offers. If your home is special, though, or you have a home in Natomas or Elk Grove, look out, because you will get multiple offers.
The displeasure seemed to manifest from the possibility of multiple offers. I don’t believe that buyers should feel threatened by the fact that other buyers want what they want. It means they’ve chosen a desirable home to buy, and that home will be desirable when it comes time to sell. They shouldn’t really worry about what other buyers are doing; if they want the home, just put their best offer out there. Just write a purchase offer. Don’t try to be cute or to negotiate, if you want the home, go get it. If you play around and take chances, a buyer could lose the home.
One sentence, though, continued to pop up during my conversations with these people. It didn’t seem to matter if they were a real estate agent or a home buyer, they both said the same thing:
“I don’t want to waste my time writing an offer.”
First, as a real estate agent, we are never wasting our time writing an offer. That’s our business; it’s what we do for a living. Writing offers and getting them accepted is how we get paid. Sometimes, offers are rejected. It’s a fact of life. Why, a Sacramento real estate agent can end up with a rejected offer even if it’s the only offer the seller received. Moreover, since about 90% of the agents in Sacramento sell only 4 to 6 houses a year, just how precious is that agent’s time in the first place?
Second, as a buyer, you’ll never buy the house if you don’t write a purchase offer. Saying you don’t want to waste your time writing an offer is like asking for a guarantee. Since when do you get a guarantee in real estate? OK, I know some listing agents who will give you that guarantee, but I refuse to throw my seller under the bus. And that’s what you’re asking me to do when you come to me because I am the listing agent and say you don’t want to waste your time writing an offer through one of my team members. Who do you think I am? Tony Soprano?
If you seriously believe you’re wasting your time by writing an offer to buy a home in Sacramento, then you’re probably wasting your time talking to this Sacramento real estate agent. And if your time is wasted, what does it say about how you feel about mine?
Pricing a Home in Sacramento Ahead of the Curve
Pricing a home in Sacramento ahead of the curve is the strategy a few select Sacramento real estate agents are offering to today’s sellers. It means pricing a home where you think the market is heading and not where the market is now. This strategy doesn’t work so well if the home is difficult to sell or is unique. It works well in areas of high demand where buyers are lined up the minute a home goes on the market — in places like Natomas, Elk Grove and Lincoln.
In Elk Grove today, you can pretty much walk the line of buyers with an order pad and pen, asking each what they will pay for this home in Elk Grove advertised at $185,000. Guy first in line might say $200,000. Tear off a ticket and write $200,000 on it. Woman behind him will smirk and promise she’ll pay $220,000. Tear off a ticket and write $225,000 on it. Couple behind both of them will trump those offers and, my goodness, they’ll pay $250,000. And so it goes. Throw your pad and pen in the air. Nobody has any regard as to whether the home will appraise when push comes to shove. They’re just thinking about their mortgage payment.
Why? Because every $10,000 increment at 3.5% interest equates to an additional $45 per month. If the home would appraise, a buyer could increase an offer by $50,000 and pay only an additional $225, less than, say, an HOA fee. Buyers don’t know how real estate works. They don’t understand that an appraiser will need to find solid comparable sales to justify a price that is $50,000 higher than any other home near it. And if they do understand, they are hoping that when the appraisal comes in less, the seller will lower her price.
A price ahead of the curve might be $225,000. Because in 30 to 45 days, there might be comparable sales at that price. Of course, you won’t get a ton of buyers. You probably won’t get multiple offers. None of that excitement. But you might get 2 offers, and one of those will be an offer you can take. All you need is that one offer from one committed and qualified buyer at a price that will close escrow. If you need more information on pricing a home in Sacramento, call Elizabeth Weintraub at 916.233.6759.
When to Accept a Sacramento Purchase Offer
Sellers today get very excited when they receive an offer but not excited enough to sign a full-price offer for their home in the Sacramento area. Wha? Yes, sellers do not want to take the first offer that comes in. They are savvy and know multiple offers will arrive if they just wait. The problem is a seller can’t wait very long unless her agent specifically states an offer review date in the MLS comments. Some sellers think they can wait as long as they want to accept a purchase offer, but they cannot.
Most residential purchase contracts in California contain a 72-hour clause for offer acceptance. This is by default. It means a seller has 72 hours to respond or the offer will expire. If a seller rejects a full-price offer that meets all requirements, it can be a problem. It can be a problem for the agent, and it can be a problem for the seller.
Agents are required per MLS to state in the comments that the seller has rejected a full-price offer, if the seller has rejected a full-price offer. An alternative is to increase the sales price in MLS to the price a seller will accept. Moreover, once a willing buyer has submitted a full-price offer meeting all the terms and conditions of the listing to a seller, the court typically says the brokerage has earned a commission. It’s not the listing brokerage that usually raises a fuss over this, it’s the selling brokerage, the company that represents the buyer.
Not to mention, just overall, a delay in response to purchase offers can super irritate a buyer to the point that a buyer might withdraw her offer if the seller keeps her waiting too long. While it may be tempting for a seller to wait to see how many other offers a seller will receive, a seller could have a legal obligation to quickly respond to a purchase offer.
