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When is the Purchase Offer Accepted for a Sacramento Home?
You will find veteran real estate agents in Sacramento who do not know the answer to when do sellers and buyers have a purchase offer accepted? What is the date of offer acceptance? Moreover, what date is the date of the purchase contract? Even Bank of America does not know the answer to this question, but at least it has picked a method by which to determine the date, even if it is incorrect, according to California law.
I had a conversation with a short sale negotiator at Bank of America yesterday about its SSPCA, which is a form used in a short sale. It specifies and references the date of the California purchase contract. This particular negotiator said that bank policy is to pick the date the real estate agent typed the offer, the date that appears in the upper right hand corner of every page of the C.A.R. Residential Purchase Agreement. This date may or may not be the date on which the buyer even signed the offer. It is definitely not the date of the purchase contract, even if it is the date the buyer signed the offer.
But I can see Bank of America’s point of view. It needs some sort of conformity in its short sale processes, thank goodness, and its lawyers probably decided that since the laws in all states are different, and their lazy ass wants to use only one form nationwide, then the lawyers would just make up their own rules. Nobody cares about short sales much anymore.
When it comes to a home buyer in Sacramento, though, the date of the purchase contract is extremely important because it establishes the contingency period date. Purchase contracts contain contingencies for all sorts of things such as home inspections, appraisal and loan approval. Those time periods, typically 17 days by contract default, start the day after the purchase contract is ratified, fully accepted.
The date the contract is fully accepted, the date of contract acceptance, is the date it is delivered to the party named on page 8 in the first paragraph (subject to counter offers, if any). If it is the buyer who is named, then it is the date that the buyer receives the fully executed contract. If the name is that of the buyer’s real estate agent, then it is the date the buyer’s real estate agent receives the fully executed contract. It is “delivery” and receipt of that delivery that starts the clock ticking.
For example, if a purchase contract is signed by the buyer on October 16th, accepted by the seller on October 19th, but not delivered to and acknowledged by the buyer’s agent until October 21st, then it is October 21st that is the date of delivery and the official date of the purchase contract.
Turning a Rejected Offer into an Accepted Purchase Offer
The thing with being unequivocally direct with people is they might think you have *Asperger Syndrome when you don’t. I suspect many successful Sacramento real estate agents display a bit of those symptoms, so it might not be as unusual as one may suspect. Symptoms such as extreme focus on the job at hand, set rituals and methods of doing things, on top of leaving people to sort out the fact that you just hit them between the eyes with the direct truth, can leave others somewhat puzzled. Not everybody appreciates candor.
Sometimes, I use candor in a playful manner, just to joke around with people, but fortunately I’ve got enough social skills to figure out it’s not always appreciated. Is it funny if you make a joke and the other person doesn’t get it? Does a tree fall in the forest? But I generally don’t blurt out NO, for example, to another real estate agent without offering a solution or alternative.
I’m of the mindset that NO doesn’t always mean NO, except in certain circumstances and we all know what those are: such as NO I will not listen to Neil Diamond sing Cherry, Cherry one more time! When a seller tells me NO, the seller does not want to accept an offer, what the seller is saying is YES, the seller would like to sell the home but the purchase offer that is set before her is unacceptable and needs to be altered. It needs to be presented in a different manner.
Yet, so often buyer’s agents will take that NO answer and wander off defeated. What some of them fail to appreciate is they are working with a buyer who wants to buy that home. And guess what? I am working with a seller who wants to sell that home. You would think, wouldn’t you, that between two real estate agents we could figure out how to bring together both parties and put that purchase offer into escrow? Isn’t that what a real estate agent is supposed to do?
Despite what some real estate books might say, we are not mere messengers here to carry out the wishes of our clients. Sellers who prefer to hire an agent who will work in that manner might want to enlist the services of a discount agent, an agent who will plop the listing into MLS and let the seller do the rest. When a seller lists a home with me, I presume the seller wants to close escrow on terms agreeable to the seller. It’s my job, as a full-service Sacramento real estate agent, to make it happen.
*Note: If you want to watch an interesting new crime show on FX about a police detective in El Paso who happens to perform at a high level with Asperger Syndrome, check out The Bridge.
3 Tips for Submitting a Purchase Offer to Buy a Home in Sacramento
Apart from the fact that this Sacramento real estate agent could probably write a book about how to submit a purchase offer, I don’t have that much time in my schedule this morning and nobody has offered to pay me for it. Yet, I would like to address 3 tips that would help a buyer’s agent to get an offer accepted. These are things that if any agent thought about it for a few minutes or looked at it from the viewpoint of a listing agent, they would automatically do. But many remarkable ideas are simple.
Before sending an offer, please review these simple tips:
- Send one PDF
- Don’t send disclosures
- Email in low resolution
There is no reason to send a bunch of different files. Let’s set aside the fact that by sending more than one PDF, a buyer’s agent is taking the chance that a PDF file might not end up as an attachment by oversight or a seller might not open it, and look at what a hassle it is from a receiving viewpoint. First, I have to set up a folder to accept all of the PDFs I receive from a buyer’s agent. I can’t just save the offer to my desktop nor dump the offer along with its supporting documents into the property folder because they will get lost and separated. All separate documents require their own stinkin’ folder. I hate to think what the seller does with the documents.
Second, then each of those PDFs have to be opened to be read. Some require separate applications to open. For example, if a preapproval letter arrives in a Word format, and I don’t happen to have Word open — because it’s not a program I use very often — then I need to sit and wait for Word to open. It’s annoying.
Now, don’t get me wrong, I am very excited to receive an offer for my seller. That is my job: to get a purchase offer. But let’s say it’s a seller’s market, like the market is today in Sacramento, and the seller might receive 5 offers or more. And the offer that arrives in piecemeal is just like most of the other offers. A seller might open only the purchase offer and none of the supporting documents just to note the price and forget about whatever else was sent.
Think of the end user, the seller. Are you making it easy for the seller to read your offer and accept your purchase offer? Are you sending documents that the seller doesn’t need such as disclosures and market condition notices?
To go into contract, sellers in Sacramento need the purchase contract, the agency disclosure, the earnest money deposit copy and the prepaproval letter (or POF). That’s it. No other documents or disclosures.
One last tip, make sure your PDF is not so large that it can’t be downloaded. Some buyer’s agents accept one-page scans returned as JPGs from the buyer. Those JPGs can be such a high resolution that the file becomes too big to email. Downsize it. Look at the MBs before hitting send in your email. If it exceed 5 MBs, that listing agent and seller might not be able to even open your attachment.
Can you imagine losing a home because the seller couldn’t open your offer?
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?
How to Keep a Home on the Market in Sacramento After Offer Acceptance
I am finding that overall, many buyers are not very committed in our Sacramento real estate market. That’s a good reason to keep the home on the market after going into contract. Part of the reluctance to commit, I’m supposing, comes from the fact they feel pressured with multiple offers happening on such a large number of homes, and it’s frustrating that they have very few homes from which to choose. This is a scary market for first-time home buyers. We’ve never had a market like this in my lifetime before in Sacramento.
We have low prices but they are moving upwards quickly in some neighborhoods. Interest rates are historically low, around 3.75%, which is just incredible. A buyer’s purchasing power is immense. They can buy twice the home for half the money today, as compared to 7 years ago. But they have also witnessed first-hand the crash of the real estate market, and some of them feel very uncomfortable navigating in unchartered waters. It’s not unusual to go into escrow one day and then have the buyer cancel the next. This is why you want to keep the home on the market if at all possible without immediately jumping into pending status.
Home sellers in Land Park had this happen to them a while back. They negotiated in good faith an agreed-upon sales price and were relieved and thrilled that their home was sold. But, the following day, the buyers bailed. They didn’t give a good reason. See, that’s the thing, in California, a buyer can pretty much cancel a contract for any reason within the inspection period which, by default, is 17 days.
The next time we received an offer, the sellers were more cautious. The buyers wrote a clean offer, but until they removed the contingencies, the buyers could easily cancel. Their agent wrote an addendum containing verbiage about cancellation that was already preprinted in the purchase contract, and that’s part of what made the sellers worry. Agents don’t always think about how their addendums will be perceived by the sellers when they are trying to appease the buyers. But if the buyers require reassurance about cancellation rights, this makes the sellers understandably nervous. So, the purpose of the addendum backfired.
How to fix it was my quandary. Part of the solution was to keep the home on the market in active status. Once a seller takes a home off the market and then puts it back on the market, buyers begin to wonder what is wrong with the home. Why didn’t the buyers want to buy it? Did they uncover something horrible about the home? Is there a structural defect? When the truth is half the time “back on market” status is just due to flakey buyers: you’ve got the blind leading the blind. It’s much better to keep the home on the market for a while.
In a seller’s market, removing a home from the market takes it out of inventory, and it’s difficult to drum up enthusiasm for the home if it goes back. Especially in a seller’s market, it is much better for the seller to leave the home on the market in active status. However, a Sacramento real estate agent must present a true picture in advertising. This means we have to tell buyers that we have an offer. I accomplished that by adding a Pending Rescission modifier to the active status. In the confidential agent remarks, I suggested that agents write a back-up offer subject to the cancellation of the existing offer.
The sellers received a back-up offer, too. That’s because everybody wants something that somebody else wants. That’s a true principle that applies to real estate.
The sellers countered the buyers that they would leave the home on the market and remove it once the buyers had removed their contingencies. This way, everybody won, and the sellers felt more agreeable to accepting the offer.
If you’re looking for an experienced Sacramento real estate agent who puts her clients’ needs first and foremost, call Elizabeth Weintraub at 916.233.6759.
