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Sellers Searching for the Proverbial Needle in the Haystack
Oh, excuse me, I now see you’re looking for the needle in the haystack. Well, why didn’t you say so? I had no idea you needed another $100,000 out of the sale of your home. Here, wait a minute, let me fix that for you. This is important, I know. You need to net a certain amount of money or you can’t do what you want to do. I get it. Why, we’ll just raise the price by $100,000. Easy peasy. Oh, wait. That won’t work. Because even if we find that foolish buyer: the needle in the haystack who doesn’t know the home prices in your neighborhood, the home won’t appraise.
No appraisal at value = no loan = no buyer.
This means we need to find a cash buyer, and there are fewer of those. Also, the problem with most cash buyers is the fact they tend to be a bit more sophisticated. Not always, mind you, certainly not more so than you, but most of the time. It’s probably how they earned all of that money, you know, by making wise investments and smart decisions based on sound principles. Tell me, do you think a cash buyer will pay $100,000 over market value for your home? Why do you think they would agree to do this?
Now, I know you looked at my CMA. You even acknowledged that it is impossible to get another $100,000 for your home. Yet, I see you still want to accomplish that directive.
Maybe what you need to do is stay put for another year or three? Or, you could rent out the house. Even though I reached into my needle in the haystack files to look for such a buyer, I haven’t been able to find this kind of buyer yet. Nothing but straw. It might take a few more years.
Which makes me totally bummed. My Harry Potter wand is broken. I can’t grant 3 wishes today. Your Magic Eight Ball says better luck next time. You may fare better to polish up your skills at Blackjack than you would hoping to sell your home for more than it is worth. Here is a tip: double down on 10s or better.
Do you know that the National Association of Realtors reports 87% of home buyers used an agent last year to buy a home? Our buyer is very likely to be represented by another agent. That agent will tell the buyer your home is overpriced, and then what can we do? Shoot him? You can’t just shoot people at random anymore, even if it easier to buy a gun than a stick of gum.
Much as I would like to, I also don’t write the rules about Sacramento real estate. We all wish our market was like the Bay Area but it is not. All real estate is local, and our Sacramento market is slowing down. At least you will get the straight story from me, even if it’s not what you want to hear.
Do Sacramento Buyer’s Agents Push Up Home Values?
Here is a new dig about real estate agents that I haven’t heard before. A potential seller of a home in Land Park called to talk about her overpriced home and how it got that way. During the conversation about how and why she paid too much for it — which I’ll get to another day in another blog — she mentioned that she was trying to buy a home in East Bay. When I mentioned I have a close friend who works in her targeted city and she might want to contact that agent to see homes, the caller threw out this crazy idea.
What I believe she was saying is that she doesn’t trust real estate agents, which is too bad. Because there are many excellent real estate agents in the business, and not every agent should be painted with the same tainted brush due to a few bad apples. This home buyer was reluctant to work with a Sacramento buyer’s agent who is a neighborhood specialist, i.e. an agent who works and lives in the neighborhood. Her feeling was the agent would try to drive up prices in the neighborhood by making her pay more for a home.
In other words, she believed the agent would not in good faith negotiate on her behalf in order to make the agent’s own home worth more. What? First, I told her, understand that agents are highly unlikely to try to push her to pay more to increase an agent’s own home value because they’re just not that diabolical. Second, comparable sales are good for only 3 months and unless a person is selling her home within that 3-month period, that sale won’t matter one little bit. A home that sold last year has no bearing on home values this year. Not to mention, one home sale does not increase the value in any given neighborhood.
What buyer’s agents want first and foremost is to make their buyers happy. They want satisfied buyers, buyers who are thrilled with the purchase of their new home and with the agent’s performance. Also, because they are home buyers who someday will be a seller, and the agent wants to eventually list the home as well. Agents want clients for life.
Buyer’s agents who are REALTORS have a fiduciary to the buyer and must hold that buyer’s interests above their own. Not only that, but Sacramento buyer’s agents want to get paid. They want to close the transaction but not at all costs. They are more focused on bringing together a buyer and seller on price than on manipulation of said price. A Sacramento buyer’s agent will do everything in her power to represent the buyer to her fullest and best abilities. Moreover, that neighborhood specialist will probably know more about the neighborhood than an out-of-area agent, which would be to her advantage!
A client called a few days ago to ask if I remembered her. I recognized her voice immediately. I also have Caller ID (ha, ha). She bought a bank-owned home in College Greens 5 years ago, and today it is worth considerably more than she paid for it. Location is everything, I reminded her. She bought in an excellent neighborhood and on a highly desirable street. She was just calling to say thanks for the holiday card. It was delightful to chat with her.
That’s the kind of happy buyer I want. It’s the kind of happy buyer just about every Sacramento real estate agent is after.
