Email Elizabethoffer negotiation tips
Best Tip for Winning the Offer in Today’s Sacramento Housing Market
Winning the offer to buy a home in Sacramento does not need to be overly complicated.
When I see buyers winning the offer in today’s housing market in Sacramento, it’s generally because they have done one simple thing. And I often share this one simple thing with their buyer’s agent when they call to ask if I have any offers. It’s as though they don’t want to write an offer until I do have an offer. Every buyer’s agent pretty much is trying to get “a deal” for their buyers when they should be worried about getting their buyer into escrow, period. It’s hard right now to buy a home in Sacramento. Don’t make it any harder than it needs to be.
I’ve noticed an attitude with my sellers that seems to repeat itself. So I share this discovery with my sellers, and even when I tell them what’s going to happen and why, they are still surprised when it happens. I can accurately predict it because lately I see the same thing happen over and over. This is when a home goes on the market on Friday. The buyer notices we have an open house scheduled for Sunday and quite rightly begins to worry about the winning the offer. The buyer’s focus, though, tends to be on how can we buy the home right now, this very minute, rather than what can we do to ensure we are winning the offer.
Because a buyer probably cannot buy the home right now, this very minute. There is no guarantee the seller won’t take the offer, but when the seller has hired an experienced listing agent like me, for example, I will suggest the seller wait until the open house. The seller is free to disregard my advice, but that doesn’t happen very often. Agents who take fiduciary seriously will want to expose the home to the largest pool of buyers possible, which tends to ensure the highest price for the seller.
However, the one thing home buyers can do to maximize chances of winning the offer is to write the offer the minute they know they want to buy the house. It could be while they are walking up the steps to open the door. It could happen when they enter the back yard or when they get back home. But the second they know they want to buy the house, write the offer. Be the first offer. You don’t have to be the strongest offer if you are the first offer. Because the first offer is the offer the seller will think about all day on Friday, all day on Saturday and all day on Sunday.
Why? Because all of the other buyers will wait until after the open house to submit an offer. They wait because they are concerned the listing agent will “shop the offer.” Well, a good listing agent is shopping the offer when all of the offers are compared to each other after the open house. Doesn’t matter if it happens before or after. Further, there will be last-minute buyers who called their agent brother-in-law in another city to write an offer after the open house, and those offers will be sloppy, impersonal. Yes, the first offer price might be countered to be more in line with the other offers. But the first offer has the edge. Think about it, is all I’m saying. Don’t be afraid to be the first offer.
When Does a Sacramento Realtor Present Offers?
The answer to when does a listing agent present offers should be as soon as possible.
Real estate agents often ask me: when do you present offers? Oh, I dunno, the third Thursday of every month? I don’t really understand that question. I’m not a lady who does lunch. I’m a Sacramento Realtor who sells an absurd number of homes every year throughout Sacramento. In fact, I resent the term lady since it infers that I am to live up to somebody else’s expectations of how I should behave, and I don’t always feel like being a lady. The business doesn’t always call for it. Life doesn’t always call for it.
Speaking of ladies, my husband and I were discussing First Lady causes during our leisurely walkabout a while back through Midtown Sacramento. How many can you recall? Nancy Reagan ran around saying No a lot. Lady Bird planted flowers. Jackie Kennedy gave us style and china, dishes not the country. Michelle Obama, such a class act. When they go low, we go high. What the heck did Rosalynn Carter advocate?
You know what I would take up as a cause if I were First Lady? Kindness. We need more kindness in the world. And not in a killing them with kindness kinda way. We can be kind without resorting to lady-like behavior.
People have forgotten how to be kind to each other. Or maybe our political environment in this country has beaten people into a pulp to the point that they just don’t care. But we are so rude. We don’t hold doors open for anybody, we run through yellow lights and don’t let anybody pull in front of us, and we scream at our children at the grocery store. Please and thank you are words that rarely escape our lips.
The world doesn’t revolve around us. Nobody cares what we’re texting, heads stooped, as we walk into light poles or out in front of traffic without looking. I’ve got news for ya: Twitter doesn’t rule. People can be so self centered. What would happen if everybody took the time today to be nice to just one other person? That would be a worthwhile exercise. Maybe it will catch on.
But as to when I present offers, I do it when I receive them. As soon as an offer comes through my email, I zip it off to the seller. That’s because we’re looking for one buyer. Just one buyer. Not a whole bunch of buyers and a whole bunch of multiple offers. We’re not playing Bowling for Buyers. We want that one buyer who will pay the price at which the seller will sell. The buyer who loves the home more than anything and can prove it.
My advice for buyer’s agents is keep your eyeballs glued to MLS. Pendings happen within minutes in this real estate market. Don’t show your buyers a home on Saturday and hope by Sunday morning it is still available. And by MLS, I don’t mean Major League Soccer.
Why Overpricing Does Not Encourage Buyers to Negotiate
Buyers don’t want to make an offer when sellers insist on overpricing.
Overpricing doesn’t matter to some home sellers in Sacramento because sellers who knowingly overprice a home often have a hard time putting themselves into the shoes of a home buyer. No matter how much they try to squeeze size 10 1/2 feet into those size 9 shoes, they are still walking in the shoes of a seller. They make decisions as a seller and hope a buyer will see things the same way, when buyers do not.
When I talk with sellers about overpricing and why they need to reduce the price to a point where a buyer will make an offer, they’ll fallback on an old wive’s tale, which is not true. They will say, but a buyer can just make an offer, right? Any offer, and I will negotiate. They know that right?
No, they don’t know that. And further, they won’t do it. They don’t want to insult the seller or cause hard feelings. They might even believe the seller is stubborn, too stuck on the price, and to try to negotiate would be an embarrassment, not to mention a complete waste of time. Buyers don’t want to feel uncomfortable when negotiating. They just want to buy a home.
I realize sellers have a hard time believing that. But it’s absolutely true. I know it’s true because I’ve seen it happen over and over during my 40-plus years in this business. But some sellers still think it’s a good idea to jump on the overpricing strategy and then cross their fingers that buyers will lowball. This type of thing might work well in a classroom but not in real life, not in Sacramento real estate.
The people who are comfortable writing lowballs are the guys who won’t budge much. They’ll write a lowball on as many as 100 properties a day, hoping one of them will stick. It’s the principle of throwing enough crap at the wall until something grabs a hold. Those are not the guys these types of sellers want to sell to.
If you’re considering overpricing, at least have a plan for a price adjustment if things don’t work out. Generally speaking, if you don’t receive an offer in Sacramento within the first 30 days, you are priced too high.
Never Let Them Tell You No When the Answer Should be Yes
Never let them tell you no, especially when you know they do not care.
Never let them tell you no. Although my husband may disagree with what I’m about to say, that’s his prerogative, but I think of myself as a pretty easy-going and mostly unfazed person. It takes a lot to rile me up. Like most people, I suppose, I do get my knickers into a twist when I’m dealing with unethical behavior, injustice or discrimination. But lousy customer service, hey, I live in California, so I’ve pretty much comes to terms with the fact that we have too many people to serve and underpaid / untrained staff to adequately serve consumers.
In my own business, for example, keeping my clients happy and content is my foremost concern. But larger corporations seem to have lost that intimate touch with the consumer. Well, you see some companies putting more emphasis on making that good first impression by changing the name of their receptionists. They now call them Directors of First Impressions. I wish only they would consider the same service after the fact such as when a customer calls for assistance after purchasing a product. I’m thinking they should change the name of customer service reps to Director of Last Impressions. Because how a customer is treated after the sale is just about as important as the service one receives before the sale, but I’m getting ahead of myself and need to address why I say never let them tell you no.
Years ago I bought a printer for about $300. The supplies, on the other hand, cost about $600 a pop, which amount to four color cartridges and an imaging drum. My printer was humming along nicely until it wasn’t. It sort of sounded like the printer was about to throw a bearing or maybe explode on the spot. What the heck, I kept buying supplies and keeping my fingers crossed it would keep chugging along.
Wouldn’t you know it — the morning I was scheduled to leave on a trip to Austin for an About.com conference — the printer stopped working. I couldn’t even print my boarding pass. It simply refused to print. Thumbed its nose. It cycled through all the lights, moaned and tried to spit forth a document but seemed, well, constipated. I asked my husband to take it apart while I was out of town to see if he could find an object, maybe cat food bits or plant debris, the normal things that fly around my desk, stuck inside.
His prognosis to me later by email was the printer had died a quick and pain-free death. OK, says I, then please buy me a new laserjet because I knew once I returned home, I’d have to hit the streets running taking care of my Sacramento real estate clients. I wouldn’t have time to drive to Office Depot to buy a new printer, dispose of my old one, hook up the new printer and spend several hours reading instruction manuals written in broken English.
My husband is a saint. He performed as requested, and I was delighted to find my new printer already in place and ready to rock-and-roll when I got home.
But then I remembered that I had four cartridges and an imaging drum sitting in their respective unopened boxes in my closet. So, I called HP to order new supplies for my new printer and asked them to pick up and refund the cost of my old supplies. Seemed like a reasonable and logical thing to do, right?
HP: No, you cannot return your supplies. They were purchased more than 21 days ago.
ME: But, you see, it’s not my fault your printer up and died on me. I bought a new printer from you plus more supplies today.
HP: Sorry, you can’t return the old supplies. It’s our policy.
OK, never let them tell you no.
ME: I’m hearing the word no from you, and that is not the word I want to hear. I want to hear that you care enough to make your customers happy. Right now, I am not happy. I would describe myself as an unhappy customer.
HP: We’re still saying no. But you could sell them on Cragislist. Or eBay. Even if I wanted to refund your money, my computer won’t let me input the return.
(I really liked that reason. It’s the computer’s fault. Hey, never let them tell you no.)
ME: What I hear you saying is, Elizabeth, you were a dummy to buy a new HP printer. You should have gone to XEROX instead. I’m also hearing you say that I should buy supplies for my new HP printer from your competitors, companies that also charge less than HP charges; is that right? You’re telling me that you do not want me for a customer any more, right? Maybe I should talk to your supervisor.
HP: My supervisor will tell you no, too. (Well, put the supervisor on the phone.)
HP SUPERVISOR: No, we cannot refund nor take back your supplies. Look at this way, if you bought a new Mercedes that the dealer filled with gas and, say, it broke down on the road. If you took it back to the Mercedes dealer and asked for a refund on the gas, Mercedes would refuse. This is no different.
ME: That’s where your logical is flawed. Mercedes WOULD refund the cost of the gas because that’s the way Mercedes works. They also give me free car washes and anywhere in the world my car breaks down, Mercedes is there at no charge to me to tow it and fix it. Mercedes believes in customer service, which it appears, HP does not. I need to speak to a person at HP who will refund my money. Who would that be, because it’s obviously not you, and I don’t want to waste any more of your time.
After being transferred to a dozen different individuals, all of whom repeated the HP mantra of NO, I was finally connected to a case manager. I explained my situation and guess what? HP does refund the cost of supplies. If this happens to you, here is what you do:
- Locate the serial number of your old printer, you will need it
- Call technical support
- Ask to speak to a case manager. Nobody else. Just the case manager.
From now on, I am not buying printer supplies more than one day in advance from HP. And I suggest you don’t stock up on supplies from HP either.
But don’t ever be a person who accepts “no” as an answer when you feel you are being treated unfairly. Never let them tell you no.
Negotiating Your Offer in Sacramento
Negotiating your offer in Sacramento is easier if you discuss strategy with your agent.
You will call it negotiating your offer in Sacramento, but the seller will call it justifying your lowball. Tomat-O, tomaTOE. I spot all sorts of offers to buy a home come across my desktop. The offers are accompanied by all kinds of reasons, too, but most of those “justifications” are inconsequential. In some ways, it would probably be better for a buyer’s agent not to supply any justification at all. They could just tell the truth. They could say my buyer just wants a discount. But that’s too novel of a concept. That’s not negotiating your offer in many people’s minds.
There are also obvious ways that negotiating your offer can backfire, though. For example, a buyer who claims her offer is at her maximum sales price for which she is preapproved, is somewhat useless information. I expect these types of buyers figure they can tug on a seller’s heart strings, and that a seller will care that they cannot afford to buy the house. Further, if a buyer’s ratios are that tight, any little thing she does to affect her credit report between signing the contract and closing could cause her loan to blow up. In addition, any small oversight by the lender could cause the loan to go sideways. It doesn’t make the buyer appear as a good credit risk.
Further, don’t discount the power of the Internet. Sellers and their agents enjoy access to Facebook, LinkedIn and a host of other websites that popup in Google searches. If the buyer works for the state of California, that buyer’s salary is public information, easily accessible online. Many buyers in Sacramento work for the State. It’s hard for a seller to believe a buyer is at her maximum, for example, if her annual salary exceeds half the sales price.
Sometimes buyers will say the home needs work, and they want to discount the price based on the projected dollar amount of their imaginary improvements. Sellers don’t care what type of upgrades the buyer hopes to make. Sellers base their asking price on the comparable sales. Generally the list price already accounts for condition of the property. Making a lowball offer because the home needs work is not a justification when the home is priced accordingly.
Negotiating your offer based on the comparable sales is generally your best solution. It’s the logical solution. Agents who lay out that scenario will often get the attention of the seller. Otherwise, buyers are left with the bad strategy of starting low, splitting the difference and getting stuck with no right of renegotiation. The worst that happens is the buyer ends up with no home at all. It’s a good idea to listen to your agent when it comes to negotiating your offer in Sacramento. That’s why buyers typically hire an agent.
