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Should Sacramento Home Sellers Pay for a Pest Report?
Now that the market is shifting in Sacramento, it’s time for sellers to obtain a pest report upfront if at all possible. Our long run of seller’s markets where homes are sold in AS IS condition are pretty much over. Of course, there are listing agents in Sacramento who have their “own way” of doing things and these guys would never take a listing without obtaining a pest report. But I see that under certain market conditions as overkill and unnecessary .
When the markets are hot and sellers rule, sellers can expect buyers to get their own pest reports and to live with the results. Pest reports are for a buyer’s edification only anyway. Unless a buyer is obtaining a VA loan or an appraiser spots suspicious items, a pest report is not required in a real estate transaction. Many unfortunate sellers in a seller’s market were forced by their agents to obtain pest reports and agreed to pay for a clearance because their agents didn’t stop to consider alternatives.
However, the times they are a changin’. We are now in a market where buyers are not as committed to buying a home. They want the best house on the best street in the best neighborhood, and in the best condition. If they can’t get that, they will remain a tenant. Inventory has increased, but only the nicest homes or underpriced homes quickly sell. It’s a bit more stable but with fewer buyers.
For that reason, my advice to sellers is now get a pest report. Whether sellers clear the work is another matter, but my suggestion is to at least pay for a pest report. Because when a buyer obtains the pest report, sellers are stuck with it. Oh, sure, one can obtain a second pest report but the second inspector will probably find more stuff that the first inspector missed. These reports are only as good as the inspector.
There is also the racket of pest companies trying to outsource the pest work at the consumer’s expense. I’ve said for years that pest companies should stick to inspections. Must be political lobbying that lets pest companies also bid on the work. Further, I’ve never read a pest report that didn’t contain padding, sometimes 30% or more. However, sellers are under zero obligation to use a pest company to clear the pest. And pest inspection reports stay on file for 2 years at the Pest Control Board.
When you hire your next Sacramento listing agent, why not hire an agent who understands pest reports and addresses market conditions? Avoid hiring an agent who works solely by rote because that’s the way it has always been done. Unless you like paying more for no good reason.
Crazy Escrows in Sacramento Mean We Stay to the End
Crazy escrows are not uncommon in Sacramento short sales.
Of all the crazy things that could fan the flames in an escrow, this particular case I’m about to discuss was exceptional, but then many Sacramento short sales are unique. This was also a small transaction as compared to selling luxury homes in Sacramento or in Davis — but as a Sacramento Realtor, I really don’t look at the sales price and tally my potential commission or I’d never list and sell half of the properties that I do. Or, as my husband likes to point out, still much more than his paycheck.
The property itself was somewhat unusual in that deferred maintenance and dry rot was evident, among some nice upgrades. That makes it hard to appraise because some BPO agents struggle with repair issues. It’s easy when all the homes within a half mile are similar to each other like those homes in Elk Grove or Natomas, it’s quite another thing when the neighborhood is distressed and the homes are not so new.
We received a few offers during the first 2 1/2 months this home was for sale, but none at the price we needed to gain an approval from the bank. Agents seem to think we should be grateful for their buyer’s lowball offers and send them to the bank on the off chance they might get accepted, and I guess they seem to forget that we don’t work for their buyers. We work for the seller, and if we’re gonna work, by golly, we’d also like to get paid for it, however small that paycheck might be. We’re not interested in hearing why the buyers feel the home is worth less, in many cases we know what the bank expects. Meet it or you don’t go into escrow. Finally, a buyer who would occupy the home wrote an acceptable offer.
Wells Fargo sent us an approval within 8 weeks, which is a little bit longer for Wells Fargo than normal, but it was also a HAFA short sale. We still had the second lender to contend with, which wasn’t budging from its high demand and, on top of everything else and typically par for the course, vandals broke in to steal appliances and wreak havoc. The sellers handled much of the repair though their insurance company, thank goodness. Then we went through 4 or 5 rounds of proposed approvals from USAA until we were down to the last 400 bucks.
I pleaded, cried and practically wept out loud to the negotiator about the sellers’ particular medical condition. Think about the worst health thing that could possibly happen to a human being, apart from maybe cancer, and that’s what the seller was going through. Then February 1st rolled around and the 2015 HAFA short sale guidelines changed, so I resubmitted the package to Wells Fargo and requested a revised approval letter to include the $10,000 relocation incentive to the seller and to pay the second $12,000. It took Wells Fargo another month to release the revised approval letter, which was finally, finally followed by the approval from USAA.
The appraiser then requested a pest report and a pest completion. Fortunately, the buyers agents, super team that they were, stepped in to help the buyer handle it. We were all ready to fund and close when the appraiser went back to confirm the pest work was completed, and she decided, on a whim, to make the crazy escrow even crazier. She noted that the floors were buckling and presented a trip hazard. Bam, the buyer’s agent was over at the home on his knees with a belt sander, fuming and mentally cursing that appraiser, I’m sure. Who knew an appraiser was also a home inspector? There’s a special place in hell for those kinds of people. If the appraiser had a problem with the floors, why didn’t she note it in the first place instead of waiting for the funding and preventing a timely closing?
Yet, close we did. From start to finish on this short sale, over 8 long months, we dealt with hostility from other agents, rejections from the lender, vandalism, inept appraisers, repair requests for the buyer, and yet in the end we prevailed. I don’t give up. As the seller mentioned yesterday when I called to congratulate, that couple would hate to think what could have happened in some other agents’ hands.
The thing is this crazy escrow was gratifying in many ways to me. A first-time homebuyer got a great deal on her first home, and the sellers received their release of liability, plus $10,000 to help ease the transition into a new life elsewhere.
