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How About a Thanksgiving Lowball to Go With Your Butterball?
A Butterball turkey from 11 years ago at my house in Land Park.
Not making this up, I actually received a Thanksgiving lowball offer for one of my listings yesterday morning. No introduction to the buyer, no notice the offer was about to arrive. I woke early morning to an email: here is an offer with the accompanying documents. When a Sacramento Realtor receives a Thanksgiving lowball without the usual notification, there is only one thing to do. Call all of the people responsible at oh-dark-thirty. Especially the person who sent the email with instructions not to call.
Further, no calls, we prefer emails. Oh, yeah? Grabbed my cellphone. One ringy dingy.
I’m not sure the buyer’s agent was happy with me waking him up. He sounded pretty sleepy. His assistant returned my call while I was on the phone with the buyer’s agent and rattled a long message that I didn’t listen to. What I hoped to determine was whether it was worth it to send the counter offer, along with the entire offer signed. Or, should we save my sellers the hassle and just send a counter offer? If it seems the counter will be met with dead silence, I don’t bother my sellers with a request to obtain signatures on the offer.
Don’t get me wrong, I will work on Thanksgiving. Obviously. But my 43 years of experience says dealing with lowballs generally means an unrealistic buyer on the other end. Over the years, a few lowballs have worked out but most do not. Probably because not much to argue over. The entire focus is the sales price. You can’t negotiate nor compromise when list price, an attainable and reasonable goal, falls off the table.
Work with us, the agent urged. As though somehow a listing agent’s job is to tell her sellers to accept less than they deserve. Maybe that’s how others do business. Not this Sacramento listing agent. People call me a bull dog. My goal, my commitment to the seller, focuses on delivering list price or better. I say to the agent, make a full price offer. Ensure the seriousness of your buyer about buying a home. The sellers would like nothing better than to sell this home to a willing and eager buyer.
You have a dated listing, the agent attempted to argue. Like it’s old, worn out, a home nobody wants. How is this when the days on market barely exceed 2 weeks? Already received over-list price offers, mostly contingent on selling homes not yet for sale. No reason whatsoever the seller won’t get list price. With that thought in mind, I prepared a counter offer at list price, obtained a signature and delivered the document to the buyer’s agent.
Hey, even a Thanksgiving lowball gets a response.
Are Cash Offers King in Sacramento Real Estate?
Agents who consider cash offers king in Sacramento might want to reconsider.
A buyer’s agent on Sunday reminded me that he considers cash offers king when he sent over his buyer’s purchase contract to buy a home. He kept repeating himself, just in case I didn’t understand his English. Cash offer, cash offer, all cash offer. Maybe he’s used to dealing with idiots, but he’s not that experienced. I know this because I looked up his sales in MLS, primarily since I did recognize his name nor company. I always like to know who I’m dealing with on behalf of my sellers. These offers come in from left field so often. Those agents never call to introduce themselves, they just shoot the offer over in an email.
Like I tell my sellers, I’m not the kind of Sacramento Realtor who gets all excited when we receive an offer. That’s because I’ve received so many bogus offers, offers from non-committed buyers, offers that blow up prior to opening escrow, offers from crooks, offers from blowhards, and one thing is for certain. Everybody has an agenda of some sort. It’s my job as a top listing agent to find out as much as I can about the other side and relay that information to my clients so the sellers can make an intelligent decision.
My initial reaction is usually what is the angle here? What is going on? Not everybody writes straight forward and clean offers. I look for mistakes, and I usually find them.
The agent who considers cash offers king was a bit taken by surprise when I told him no, cash offers are not always king. For one thing, buyers with cash can buy anything their heart desires, as long as they can agree on price. There are really no restrictions. Therefore, some, not all of them, develop an attitude. It’s not unusual for a cash buyer to try to renegotiate in the middle of escrow for a lower sales price and threaten to take her cash elsewhere. Or, a cash buyer might find another property the buyer likes better while in the midst of home inspections and the buyer will cancel to chase the other house. There is not always a high level of dedication and commitment from the cash buyer.
Further, it’s all cash in the end to the seller anyway. The only difference is the appraisal and loan qualifications, and if the buyer is already prequalified, most of that hurdle is over. If the home is priced right, it will meet appraisal. So, how are cash offers king in Sacramento?
This particular”all-cash buyer” was also not really a cash buyer. He had a portfolio of stocks he needed to sell to obtain the cash. His cash was not liquid. Although the agent said the buyer lived in the area, the buyer was not in the area when he signed the offer. He was in another state. His check reflected an address in that other state. His offer stated he would not live in the property. When I looked at the agent’s sales over the last 18 months, I found only 2 sales. I went one step further and looked at the buyer for those sales, thinking perhaps it was the same buyer. But no, it was the same buyer, just not this buyer; however, the buyer’s home address was the buyer’s agent’s home address.
Sometimes it makes a difference to sellers if the potential buyer will live in the property versus renting it out. This was one of those times. I laid out all of the pros and cons to the seller. The seller chose the buyer from a position of knowledge. This is what I want for all of my clients, and what they deserve. If you are thinking about selling a home in Sacramento, why not call Elizabeth Weintraub at 916.233.6759, and more 40+ years of experience to work for you?
Sacramento Listing Agents Shouldn’t Forget The Seller Owns the House
No matter how you look at it the seller owns the house.
Many of my clients like to leave decisions up to me, yet I constantly remind them the seller owns the house, not the agent. I’m just their Sacramento listing agent. I can advise and guide, but I can’t make decisions for them. They actually say things like: you know what to do, you can just take care of it. While I might love to negotiate — and I am one of those twisted individuals who truly does love the art of negotiation — I can only make suggestions. Sometimes buyer’s agents will ask me if I sent their document to the seller. When they ask that question, it tells me they wrongly suspect I’m making up reactions or negotiating without speaking to my clients. I would never do that.
However, I know agents who do. The ones who blurt out “my client won’t do that.” Well, they don’t know that for a fact. They have absolutely no right to make that sort of statement. How often have you heard agents blatantly claim to know precisely what their clients will do? Unfortunately, in this business, all the freakin’ time. I don’t even know what my own husband will do on any given day, and I see him 7 days a week. Our cats are fairly constant creatures with habits and routines, and I don’t know what they will do, either. We can’t possibly know what anybody else will do or think or say. It’s impossible.
The sellers owns the house, which gives the seller the sole right to make independent decisions. Yesterday, for example, I received an appraisal and addendum from a buyer’s agent, asking us to reduce the price by $5,000 because the appraisal came in low. I sent it to the seller and suggested the seller ask the buyer to bridge that gap in appraisal in cash. This was based on my astute observations concerning this particular situation. I had enough information to tell me the buyer would be receptive to that idea. No happy, most likely, but receptive.
I asked the seller what he wanted to do. He said: Ask the buyer to pay the difference between appraisal and sales price. I relayed that bit of information to the buyer’s agent. The agent then asked me if they would consider splitting the difference. I told him my advice to the seller would be to stick to the original plan of demanding the $5,000, but I would bring it up. The sellers discussed it, and then the wife had a change of heart. The seller called back to say, because of his wife, they would like to split the difference.
Are you sure? I asked. Because I’m fairly confident we can get the $5,000 for you. But as you know, it ‘s not my house. My mantra is the seller owns the house, not me. If you want me to negotiate less, I will do it, I suggested. It’s up to you. The seller wavered a little. The seller asked, “Well, what would you do, Elizabeth?”
OK, fine, if it was me, I’d take the $5,000 and not feel guilty about it. But it’s not my spouse who is asking me to back down a little. It’s your marriage, I pointed out. Sometimes, that is more important than the money. You’ve got to maintain harmony and respect for other opinions in that union.
That made it easy for him. They decided to give the buyer a break. That’s exactly what we did. We split it. These sellers have a heart and are very kind, sweet people. Whether I agree or not with their decision is immaterial. It matters that they are happy and they make the decisions. Because the seller owns the house.
About Buying a Home Before Selling a House in Sacramento
It is very doable to pursue buying a home before selling a house in Sacramento today.
For some lucky sellers, it is definitely possible to pursue buying a home before selling a house in Sacramento. How one goes about this depends on basically two things: the type of real estate market you’re in and your financial ratios. At the moment, we are experiencing a strong seller’s market in Sacramento. This means sellers are in the driver’s seat. We have low inventory and high numbers of buyers. It’s the principle of supply and demand at work.
Sure, we have buyers who say, my house is so beautiful, it will sell right away, so why can’t I look at buying home before selling? As Sacramento Realtors, we have to bring these buyers into reality. Move them outside of their own situation and get them to look at this through the eyes of the seller. I say to them: Ok, pretend YOU are the seller of this house and YOU have 5 offers. Four of those offers are from buyers who don’t have a house a sell, they have no contingencies. They can get a loan and close right away. And then there is YOU. You who have not even put your home on the market, and you who wants the seller to wait while you get around to it.
If you were the seller, whose offer would you take? The buyer who is ready to go into escrow and doesn’t have a house to sell? Or the buyer who has a contingency to sell her home first and doesn’t have an offer yet? Buyers stare at their feet, shuffle toes in circles. They draw their own conclusion: Um, I guess the other buyer’s offer? Right! So, why do you think the seller will want YOUR offer, an offer that could blow up in their faces? I hate to be the bad news messenger, but there it is.
If you’re thinking about buying a home before selling, you’ve got to see this from the other side to understand.
Now, say you’re in escrow already with a buyer on your house. The seller’s listing agent will want to know if that buyer has removed contingencies. Until that happens, there is no solid commitment. If you’re just gone into escrow, the buyer has by contract default 17 days to change her mind. That’s still an iffy proposition to a seller who has offers from buyers without a home to sell.
We’ve been working with quite a few buyers lately who have had homes to sell but decided in this limited inventory market that they might sell their home without finding another home, which they don’t want to do. They don’t want to be homeless. I don’t blame them. So, for them it makes sense to focus on buying a home before selling a house. Conventional wisdom says to do it the other way around, just so you aren’t tempted to dump your old house for peanuts. Contrary, in a strong seller’s market, the risk of that happening is very low to nonexistent. The hard thing is finding another home to buy. You can leave the sale up to your Sacramento Realtor, a listing agent like Elizabeth Weintraub, who concentrates on sellers and maximizing their bottom-line profit.
If you have good credit and the financial means to carry two mortgages at the same time, you can look into buying a home before selling. Bottom line, all sellers need a place to go. That’s the first question I ask people who are selling. Where will you go? Because if you’ve got no place to go, you’ve got no good reason to sell. This way, sellers are assured they will get the home they want by buying that home first.
Selling the Over-improved Home in Sacramento: The White Elephant
If you have an over-improved home to sell in Sacramento, call Elizabeth Weintraub.
If any Sacramento Realtor can sell an over-improved home in Sacramento, it is Elizabeth Weintraub. I know this to be a fact, Jack, because I’ve done it a number of times. Further, I’ve even owned such a place myself, many years ago. My first residence, which I bought in 1979, was a sprawling ranch of 8,600 square feet with an indoor in North Tustin (Orange County). I bought it utilizing seller financing and no-money-down from a lawyer. It didn’t dawn on me at the time but one of the main reasons the seller took my offer was because he himself could’t sell it. It was a white elephant for the neighborhood. All the surrounding homes were around 3,500 square feet, and that was almost triple that square footage. It belonged in the hills, not at the base of the foothills.
I met with a seller yesterday who owns an over-improved home in Sacramento. His first question was whether he should do a short sale. I ran the comps, and while it might look that way to him, to an appraiser, it doesn’t. To an appraiser, there are homes within a 1/2 mile radius that sell for enough that he’s got equity. We are in a unique market at the moment because there is not enough inventory to meet demand. There is also not enough inventory to make appraisals easy to do.
It is easy to do an appraisal when there are a dozen homes that sold in the same neighborhood. It’s another story where there are ZERO homes that sold in an existing neighborhood, forcing an appraiser to pull comps from the neighborhood down the street. I tried to explain this, and even showed him a map of where the comps are located. Only one comp is in his neighborhood. The rest are located in more expensive neighborhoods.
I pointed out that the underwriter will want to see homes in close proximity used as comps. If a home nearby of similar square footage and age is not used, the underwriter will question why. The problem with this guy’s home is it is worth, let’s say, around $800K. But it’s located in a neighborhood of homes worth around $400K. People who want to buy a $800K home want to buy it in a neighborhood of other homes worth $800K. Right now, this very minute, the similar values are in another neighborhood, which makes this an excellent, if not perfectly opportune time, to sell an overpriced home in Sacramento.
Buyers are unlikely to know that the surrounding homes are not of a similar value because none is for sale. But this guy is not ready yet to sell his over-improved home in Sacramento. He thinks if he waits, he will get more money because his home will continue to appreciate. Maybe it will. However, if interest rates go up or inventory increases, both of which will eventually happen, that could put a damper on those plans. Sometimes, when opportunity presents itself, one needs to jump right on it. Not to mention, 9-year-old improvements will continue to lose value as time marches forward.
Perhaps he will see the light. But if not, I’m sure I’ll find another over-improved home in Sacramento to sell. There are no shortage of homes that people improve within an inch of its lives, a white elephant, out of step with the rest of the neighborhood, with no regard to an eventual sale. You never want to be the best home on the block. Quite the opposite. But if you are, call me, because I’ll have a plan. I always have a plan. 916-233-6759. Elizabeth Weintraub.
