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When Is a Good Time to Reduce the Sales Price in Sacramento?
The best time to reduce the sales price in Sacramento is pretty much never.
An agent from a real estate website asked when is it a good time to reduce the sales price, meaning if a home doesn’t sell within a certain time period, at which point should a seller drop the price. Trying to establish set guidelines is pretty much impossible because every home is different and the temperature of your local real estate market varies with the seasons, among other criteria.
For example, some homes are simply more difficult to sell than others. Sacramento homes in challenging locations are hard to sell, like homes that back up to a school or a basketball court. Sacramento homes without updates in an area of remodeled homes makes them difficult to sell. Sacramento homes with weird layouts, white appliances, old carpeting, no first-floor bedroom or full bath, tiny yards, deferred maintenance . . . you get the idea. And let’s not even talk about short sales in Sacramento, which fall to the bottom of a buyer’s wish list since most need to sell at market value but take 3 times as long to close.
I’ve sold homes that have been on the market for 90 days at list price, and we never reduced. Sometimes it takes the right buyer. I never discard a home as “impossible to sell” especially when the seller loves the home because it means there is another person somewhere else who will also love it. I just need to find that person and appeal to that buyer. Nobody is that unique.
However, in today’s Sacramento real estate market at this particular period of the year, a good time to reduce the sales price is NEVER. When buyers see a price reduction, the immediate thought that pops into buyers’ heads is “how much lower will they go?” They think a seller is desperate and maybe the seller is. They show no mercy and head straight for the jugular with a sharp knife.
The best way to reduce the price is to take the home off the market and put it back as a brand new listing. You hit the market just right, at the right time with a new set of buyers, and BINGO. The home sells. It’s a bit more work for this Sacramento Realtor, transferring documents, photographs, lockbox settings, so forth, but it works. If it didn’t, I wouldn’t advise my sellers to do it.
Perhaps a better question to ask is not when do you reduce the sales price but when do you reassess the marketing, the length of time on the market and make adjustments? At least monthly. Certainly, initially, at the 21-day mark. Some homes just take longer to sell.
Are Open Houses in Sacramento a Good Idea When Selling a Home?
Open houses tend to attract buyers in Sacramento.
Is it worth it to hold an open house when you’re selling a home in Sacramento? If you watch HGTV, the answer there will be yes, because without an open house, how can they kill time between rehabbing a junk pile and shoving it down?the throat of some unsuspecting buyer? Open houses in Sacramento are something agents do generally as part of the Sacramento real estate services offered, but if a home was never held open, it would still sell.
Out of many of the studies that have been focused on open houses in Sacramento and the results, the acceptable percentage of homes that sell at an open house are less than 5%. However, it doesn’t take into consideration the number of buyers who might have viewed the home at an open house and a few days later wrote an offer. I suspect if that number was included, the percentage might jump to 10 or 15%. Which is still a decent enough number to continue holding open houses.
I have a client who does not want us to host any open houses in Sacramento. He straight out said he doesn’t believe in them, and he implied that its sole purpose is to bring the open house agent a bunch of buyers to whom the agent can sell a different home. Yet, it doesn’t hurt, either, I pointed out. Why throw away that 5% or 10% chance of finding a buyer? It just might happen. Turns out he is not diametrically opposed to open houses after all.
Buyers often buy a home on impulse. You would think they would buy a home the way you or I might do it — by agonizing over every single detail, filling out mounds of paperwork to obtain preapproval, sifting through homes online, one photo after another until our eyes bulge out of our heads, watching video after boring video of four walls and a roof, but no. Some people will be out driving to an errand on a Sunday afternoon, pass an open house and say to themselves, hey, it’s a roadside attraction, let’s stop and take a peek.
Next thing you know, they are salivating and asking if they press hard whether the third copy is theirs. This is absolutely true. They can’t whip out that checkbook fast enough to write an earnest money deposit. It can happen to anybody. It could happen to you.
Is This a Good Time to Sell a Home in Sacramento?
Right now is a good time to sell a home in Sacramento.
The thing about selling a home in Sacramento is if it is urgent to sell, whether now is a good time to sell a home in Sacramento is not a question some sellers ponder. If there is no urgency, though, a seller is more likely to ask that question, and with good reason. There are good times and not so good times to sell a home, but none of those situations make the sale impossible, unless you’re underwater and don’t want to do a short sale.
Over the past decade, we have weathered a horrific time in Sacramento real estate and throughout the nation. From 2005 through 2011, sales were depressed and prices fell. Now, much of the turbulence has passed and the market has been on an upward motion ever since. The big price increases are pretty much over for a while, and not every seller is out from underwater, but many who bought in 2007 and forward are making out OK.
The National Association of Realtors just released the REALTORS Confidence Index for July 2015. I participated in that survey so I received an advance copy prior to publication. Although all real estate is local, the story is pretty much the same across the country:
- low inventory
- harder for buyers to qualify for a loan
- problematic appraisal issues
- delayed closings, and
- the looming interest rate increase on the horizon gives buyers pause.
Here are some of the facts released in the Realtor Confidence Index report, which I hope you will find interesting:
- The days on market for May to June in California are mostly under 30, whereas the days on market in Maine are over 90.
- The outlook for the next 6 months in California for selling single family homes, townhouse or condos is strong.
- Buyer traffic in California is strong; whereas seller traffic is weak. This is one sign for a seller that it’s a good time to sell. Easier to sell, but harder to buy. Contingent sales may be more prevalent in California as a result.
- The median price change over the next 12 months in California is forecast at 3% to 4%. The two states predicted to see the highest median price changes are Colorado and Florida, from 5% to 6%.
- Regarding distressed sales, nationally, foreclosures made up 5% of the market and short sales dropped to 2% of all sales.
- Cash sales are still strong at 23% of all buyers, but an interesting fact is 75% of those cash investors are foreign internationals. My mother learned to speak several Chinese dialects, and I wish she were around now.
- The rental market is on a strong upswing, and it’s cheaper to buy a home than it is to rent. Good time to buy and hold.
Overall, I’d say this is an excellent time to sell a home in Sacramento, especially since we are heading into our second strongest season in the area, which starts right after Labor Day. As long as interest rates don’t jump, the market will remain fairly steady into next year.
We desperately need more homes to sell. Call Elizabeth Weintraub at 916.233.6759, if you’re thinking about selling a home in Sacramento. I am a top producer with more than 40 years of experience.
Zillow Zestimates and Why Home Sellers Need Realtors to Price a Home
How accurate are the Zillow Zestimates for a Sacramento home seller?
If you would like to hear something hilarious about Zillow and Zestimates, consider this. When I asked a new agent in my Midtown Lyon office what he thought about a listing I had placed on Lyon broker tour a few months back, he said that he believed we had priced it too high. When I asked him to explain how he came up with that idea — because when an agent is still in training, you never know what process they use to determine value — he said he looked it up on Zillow.
My mouth fell open in shock. I’m afraid I gave him a lecture, probably a speech he was not expecting, about how no professional real estate agent anywhere in the country ever in a million years would rely on a Zillow Zestimate, and if he wants a future in the Sacramento real estate business, he needs to learn how to estimate value independently. Don’t you be caught dead taking a Zestimate, I warned. Pricing a home is a service we offer, as a Sacramento Realtor, to our clients. We must be able to accurately and precisely compute market value.
I don’t think that guy is talking to me anymore.
It doesn’t matter if you’re a buyer’s agent or a listing agent, or you do a combination of the two services, an agent needs to know how to price a home. If only life were that simple that we could go to a public website and gather all of our information and never have to retain a specialist for services, but that’s not reality. Not for now, anyway.
We can’t use FaceTime for a doctor visit, although that’s a pretty good idea. You know, we could always drop by around lunchtime to offer a sample of blood or have our vitals taken in a private drive-through booth. Instead of wasting time sitting in the damn waiting room and reading old copies of Golf Digest.
To price a home for sale, there are many values to take into consideration and to compute that far surpass the data a person can obtain on Zillow. It doesn’t mean that Zillow is bad by any stretch, there is a lot of excellent information on that site, and sometimes, let’s face it, I admit to stooping so low as to tell other buyer’s agents, hey, go look at Zillow. The Zestimate for my listing is $625,000 and yet it is for sale at $575,000. What a great deal for your buyers! Send your buyers to Zillow, too!
Some of those agents, let’s face that, too, they don’t know any better, as evidenced by that new agent in my office and my daily interactions with other buyer’s agents.
I check out the Zillow Zestimate so I can properly explain to my sellers — whom you can bet your bottom dollar have already looked at Zillow — why that value is incorrect. That’s one of the reasons they really need a top listing agent. Because the professional Sacramento Realtors, well, we don’t rely on Zillow for market value.
Strong Sacramento Listing Agents vs Conflict Avoiders
Jackson looks like a tough cat, but he is a meek and timid soul, like some real estate agents
The thing I’ve noticed most about moving toward the age of 64 is not so much removing the ear worm stuck in my head of will you still need me, will you still feed me when I’m 64 — which I strongly suspect was a clueless image Paul McCartney conjured when he wrote it in his teens because you’re too young to tie your shoes at that age — nope, what I’ve noticed is it’s the growing non-acceptance of crap. Well, honestly, I’ve always been a no-crap taker, but getting older has absolutely strengthened that trait, given it stronger legs, more spunk. That’s the benefit of aging for many of us.
I am definitely in the category of strong Sacramento listing agents. I am also a top producer who ranks in the top 10 agents in Sacramento.
After 40-some years in this business, when I tell somebody it’s the principle, you better believe it’s the principle. It’s not the money. It’s not the time involved nor the effort. It’s the principle. It’s the conviction. It’s also eliminating the consequences a lesser action of conflict avoidance could produce.
I realize there are a ton of people in the world who routinely avoid conflict. They will do anything to avoid conflict. My cat, Jackson, the ragdoll, is such a good example of conflict avoidance. He will starve to death rather than push another cat’s face out of his bowl when he’s eating. He just steps away and lets another cat eat all of his food.
Some Sacramento listing agents are like that. When they receive, let’s say, an unreasonable request from a buyer, their sole focus is closing the transaction, and they don’t want to push back. They want to do things the easy way. They might suggest to the seller there is no other choice but to accept the buyer’s demand. To rollover and take it. Low appraisal? Their advice is just eat it; don’t push back.
Often — and I hate to point this out except that I’m right — these sorry situations involve the timid, zero push-back, mousy brand of agents who are Sacramento listing agents who have discounted their commission. These guys can’t even stand up for their own paycheck, why does a seller think they will fight for them?
When a seller is paying me for representation as her full-service Sacramento Realtor, I do what is best for the seller, which also happens to fall in line with my nature. My nature is to fight for the principle and for the principal through successful negotiations that produce results my sellers expect. It’s a lot more work but it’s the right thing to do. No question about it.
