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Will a Sacramento Seller Sell for Less than List Price?
Buyer’s agents in Sacramento continually hear the question from buyers which, they in turn, pass along to the Sacramento listing agent: Will the seller sell for less? It’s not always phrased in those exact terms, but that’s what everybody wants to know. And that’s the one thing they cannot know and will never know unless they write an offer. For starters, no listing agent worth her salt is about to disclose to anybody for any reason how much her sellers will take to sell that home.
You might wonder why not. Because the listing agent has a legal fiduciary duty to the seller of confidentiality. The list price is the sales price. Period. If the seller prefers a range of value, then the sales price will be listed as a range of value indicated by a big ol’ V that nobody understands so nobody does it. Second, the listing agent doesn’t know what her seller will do because the listing agent is not the seller. She doesn’t own the home, and she can’t make decisions for the seller.
Every so often, I receive an email from a buyer’s agent that lays out all of the reasons why that agent’s buyers are such spectacular human beings and why they deserve to get an incredible break on the sales price — primarily because they are looking at a home the buyers cannot afford to buy. In my mind, of course, I wonder how that is my problem and what that has to do with me, Al Franken? I mean, why doesn’t the agent show her buyers the types of homes that her buyers can afford to buy? Why is she showing her buyers homes that are too expensive for her buyers?
You know why she’s performing such an unproductive service maneuver? Because she doesn’t want to take a chance that her buyers will dump her and run off to some other real estate agent in Sacramento. She wants to make her buyers happy. She wants to do what her buyers ask of her, like any agent. But somewhere along the line, an agent needs to educate her buyers. Explain the market, how pending sales are moving, supply comparable sales and provide education. Buyers are not real estate agents. That’s why they hire an experienced real estate agent: to guide, assist and help them to buy a home.
When an agent sets aside her professional self-worth in a feeble attempt to keep unreasonable clients happy, she loses credibility with those clients, which in turn makes clients miserable. It’s not a win-win.
Further, when a buyer is pre-approved to buy a maximum amount, buyers should look at homes priced below that maximum amount. At homes they have a chance in hell of buying. Buyers should not ask their agents to show them homes that are listed higher than that price point unless those homes have lingered on the market and are stale, overpriced. You don’t ask to see a brand new listing and expect to a seller to accept a lowball and sell for less. It doesn’t work that way. Well, maybe it does on HGTV, but not in the real world of Sacramento real estate.
Red Flags on Purchase Offers for Sacramento Homes
Every Sacramento listing agent owes a fiduciary to her sellers to try to ensure that the offer the seller has received is a bonafide offer, especially those that seem a little bit weird. I’m not about to say that all out-of-area buyers, especially those from the Bay area, are crooks or are not to be trusted, but I have seen my fair share of purchase offers that require additional scrutiny and most of them seem to stem from the Bay area. To be fair, though, there are crooks right here in Sacramento, and there are doofus real estate agents right here in town who enable them.
Part of my job to my sellers is to look for what can go wrong and advise accordingly. The first red flag I might see in an offer is due to the fact the agent might not read the MLS listing nor adhere to the requirements. I suspect they do not always read all of the instructions because they either don’t have full access to MLS, they are confused, inexperienced, or they just didn’t bother to look for attachments. Some agents probably do not want to comply, so they simply ignore the requirements.
The second red flag is the offer itself might appear as a template. This means all of the standard information is typed in a different font, often an odd color, and a different point size, and the pertinent data such as property address and sales price do not match. Agents use this procedure when they are creating multiple offers and throwing those offers to the wind. They think nobody notices this.
The third red flag is the offer might be missing information. Certain boxes might be left unchecked and blank lines will be incomplete. Attention to detail is not always a strong suit among thieves, perhaps the APN number is missing or the agent’s license number is not there, which are important items to include.
The supporting documents are often a mishmash of papers tossed together. The proof of funds might not contain the buyer’s name. The earnest money deposit might be from a new stack of checks, numbered in the low 100s and containing no date nor identifying information. The pre-approval letter is most likely outdated if not expired.
You might ask yourself why do they bother to do this? What is the point? The point is the investors think they are clever and smart to lock down as many properties as they possibly can while they figure out which ones they might want to buy. They might make offers on 10 or 20 listings but be able to buy only one. This practice is not advised and many lawyers say it is against the law, but when has that stopped the crooks?
When you look at all of this damaging evidence, coupled with the fact the agent has not shown the home to the buyer, these are not really offers. If you need further proof, just ask the agent a question such as did you show the home? The agent won’t reply. And there you go.
Why Not Call a Sacramento Listing Agent Before Writing an Offer?
It’s always a good idea for the buyer’s agent to call a Sacramento listing agent to talk about the home a buyer might want to purchase, but so few agents seem to call the listing agent. Some will send text messages but it’s so much better to just dial the darned phone. Especially for me because my phone is not always visible; it’s often on mute and I rely on my Bluetooth. Of course, some Sacramento real estate agents don’t answer the phone, I get it, and it can be very frustrating for a buyer’s agent to try to get a listing agent to respond, but they owe it to the buyer to try.
Because I’ll tell you what happens when they don’t. When they don’t, the Sacramento listing agent and the seller are left to their own devices and interpretation of that buyer, and it might not be pretty. I received a few offers from buyers that arrived out of left field over the weekend, no warning. Some without the proper documentation and some at such low prices the sellers thought the buyers were on crack. I encouraged them to issue a counter offer anyway, and to address all of the issues in the counter.
Low and behold, the buyers accepted that counter offer. So, you never know. One of the crucial elements left out of the original purchase offer was a one-line sentence in the purchase agreement that mentioned the sale was contingent on selling the buyer’s home without further explanation. There was no Contingency of Purchase addendum submitted. But when I questioned the agent, it turned out the buyer’s home was in escrow. That makes all the difference in the world. It was a huge turning point for the seller and moved the seller from no way in hell to where do I sign.
We need to get back to the day when an agent calls the Sacramento listing agent. Buyer’s agents can find out if the home is still available, whether there are counter offers in the works or other offers on the way, if there is some special consideration that needs attention in the contract. Moreover, it gives the buyer’s agent a chance to pitch the qualifications of the buyer, network a little with the listing agent, establish communication and set the stage for offer acceptance.
Whether I’m listing homes in Elk Grove or West Sacramento, soon as I spot a showing through my SUPRA lockbox, I shoot off an email to the buyer’s agent to see if I can help to answer questions. My hope is to open a line of dialogue before they write an offer and to give agents easy access to my email.
Let It Be and Hire a REALTOR in Sacramento
If you’ve ever wondered why it’s a good idea to hire a REALTOR, the California Association of Realtors has launched what it says is new content for REALTORS, even though the source of its data is 2012. Or, maybe that’s a typo in the artwork image. We can all make mistakes — heck, while watching the Grammy’s Salute to The Beatles a few nights back, I suddenly realized I had misheard the lyrics to Let it Be all these years later. No joke.
Turns out Paul McCartney’s mother was named Mary. Why I do not readily recall this tidbit is a mystery. I surely must have stashed away this bit of information into my memory blocks at some significant time in my childhood, just as surely as I vividly recall writing The Beatles over and over, trying to write it 5000 times during class to win a Beatles wig from a local Minneapolis radio station, and suffering the agony and instant flash of hatred toward my teacher who snatched the papers off my desk, crumpling my work into her own little twisted hands while an evil grin spread slowly across her wretched face . . .
The line in Let it Be is When I find myself in times of trouble Mother Mary comes to me. Don’t ask me how I managed to believe during all of these decades that The Beatles sang: When I find myself in times of trouble, Mother married constantly. It made sense to me on some weird level. Maybe I thought if you couldn’t afford to pay your bills, you could always marry into money? Some things don’t make sense like a dead skunk in the middle of the road.
It also doesn’t make sense to try to sell a home in Sacramento by yourself when you can hire an agent who, if she’s any good, will probably make you more money than you could get on your own, even after paying the agent a commission. The California Association of Realtors says on average FSBO homes sold for $184,000 versus homes sold by a REALTOR at an average price of $230,000. C.A.R. concludes that sellers lose $46,000 by not hiring a REALTOR.
Bottom line, no matter how much you think you might know all the words to your favorite songs, some of us can mess it up and get it in our heads the wrong way. Just don’t mess up your home sale by trying to go it alone. If you need an experienced and aggressive listing agent, call Elizabeth Weintraub, at 916.233.6759.
Image: California Association of Realtors
Why Do Sacramento Homes Come Back on the Market?
Just because you spot a home in the Sacramento MetroList MLS with a “back on market” status does not mean there was something wrong with the property; yet, that assumption is the first premise that some buyer’s agents and their buyers attach themselves to. The problem with many back-on-market listings is the buyers (or the buyer’s agents) did not understand what they were doing when they wrote the purchase offer. It’s like they embarked on a wild bender and woke up face down in puke. OMG, what did I do, they wonder, I bought a house.
I try to follow the rules of MLS, and unlike some agents, I actually read the MLS manual. MLS rules state we listing agents have 3 days to change the status in MLS from Active to Pending. However, there is also the real world, and the real world says if I’ve got buyer’s agents showing my pending listing for 3 days straight when I knew it was pending and did not inform them, my name in the real estate community would turn to mud. It’s unethical to purposely not change the status in MLS and to misrepresent what’s going on.
The problem that arises is we might be led to believe that the buyer is steadfast and then we discover, no, there is a problem with the buyer. Meanwhile, the listing is sitting in pending status. When we put back the listing on the market, now everybody wants to know why, what went wrong — when it was the messed-up buyer or agent that was the problem.
In one instance, we moved a perfectly beautiful home in Elk Grove from its fresh active status to pending when an Elk Grove buyer with a criminal record hoodwinked the seller into accepting an offer. The buyer’s agent was absolutely steadfast that the buyer could perform until it turned out that the buyer, oops, had no money, no car and no job. Yet this home went back on the market, and it’s not the same.
In another instance, the buyers, with the buyer’s agent’s permission, wrote multiple offers to buy a home and ended up in contract on two homes at the same time. The buyer’s agent did not immediately notify the listing agent. Meanwhile, status changed from active to pending in MLS. A few days went by before the buyers bothered to decided which home they wanted to buy (ultimately the answer was neither). That buyer’s agent learned a hard lesson, but still, the seller’s home ended up in back-on-market status.
Recently, a seller accepted a contingent offer, meaning the buyer had a home to sell, and the buyer asked for, let’s say, 7 days to sell her home. Her agent noted the home was on the market and should quickly sell. Before advising my seller to accept the contingency to sell a home from the buyer, this Sacramento real estate agent checked the accuracy of the listed price, and it seemed very reasonable. The seller accepted the offer. We changed the status in MLS to pending.
Then, the buyer’s agent did a double take when when we asked for the contingency release within the specified time period. Turns out she did not correctly write the Contingency of Purchase. She made a huge mistake. She had meant to ask for a much longer time period, consisting of a few months. I guess now I have to add to my repertoire of insulting questions to ask buyer’s agents: Does your buyer understand what she signed?
This Sacramento spring market seems so squirrelly. It’s bad enough that I have to personally call banking institutions to verify funds on deposit (because the loan officers and buyer’s agents don’t always give a hoot), and interrogate the buyer’s agents as to whether the buyer wrote two offers. I don’t mean to insult anybody. But this back-on the-market business is damaging to sellers, and I have to look out for my seller’s interests. I might also change my policy now to leaving the status modifier in ACTIVE for a few days, just to make sure everybody is on the same page. If buyer’s agents want to know whether we have any offers, they’ll just have to find out the old-fashioned way.
