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A Hard to Sell Duplex in Land Park Closes Escrow
This blog is about selling a hard-to-sell duplex in Land Park, not far from my real estate office and my home. Now, one of the reasons that readers come back to my Sacramento real estate blog again and again is because I share stories and lessons I’ve learned in real estate. Even though I’ve been in the business for decades, I still learn something new with each transaction and through each closing, which is what keeps the real estate business exciting and interesting for this agent. This duplex in Land Park is one of those stories.
I just closed this duplex, which wasn’t quite located in Land Park proper, although it is situated in the same ZIP of 95818. I started working on this property a year ago to the very day it closed. This reflects patience and dedication on the part of this Sacramento real estate agent. It was a difficult property to sell. For many reasons.
There was nothing wrong with the property itself, though. In fact, it was a dream listing, if one isolated all of the other factors. It was better than a regular duplex in that it was not constructed up-and-down or side-by-side. The units were not attached to each other at all, which greatly increased the rentability factor. They were standalone, contemporary houses. In great condition.
Location was an issue because the property is under the W X Freeway. That means a duplex located in a desirable area of Midtown, for example, on a quiet street, would sell for more money than a duplex, say, under the freeway. And the sellers initially expected the same price as other duplexes in the area, regardless of location. Top that off with the fact they probably paid too much when they bought it as they are not from Sacramento, plus bought at the top of the market . . . and, well, it’s a recipe for a long struggle.
It’s hard to tell a client they made a mistake years ago. Nobody wants to hear that. Especially a seller who hopes to get top dollar today. I did mention I thought they overpaid even for market conditions at that time, but also explained it was water under the bridge now, realizing my words were probably not fully sinking in. I can’t go back in time to change that original purchase, and harping on a poor financial decision years ago at this point would have been hurtful. I’m not a hurtful person although I do stick to honesty.
Besides, I really liked the sellers. They are sincere, nice people. They are the kind of people who drove hours to Sacramento to meet with me personally because they wanted to shake my hand and look me in the eyeballs. I sell many homes for people I never meet, and that’s OK, too, but some people forge a special connection in person. These guys had worked with other agents in Sacramento and seemed very happy they found me.
Every week or so, I would send them a market update, showing that most duplex buyers either wanted to buy a duplex in Land Park or Midtown in a better area or buy a duplex for less money. Hey, facts are facts. I don’t hide them. But I also continued to plug away for them and pushed for their price. I advised the sellers to raise the rents, which helped tremendously with the cash-on-cash return for an investor. Buyers laugh when you tell them how much they could get in rent if the rent is not already being paid at that amount. You’ve got to show buyers, not tell buyers. I sent buyer feedback from agents.
We found buyers, finally. They came to look at the duplex last winter around Christmas before the rents were increased. These Sacramento investors did not write an offer until June. By then the cash flow was much more appealing. All of a sudden, a few days before closing, the buyers changed their minds and were about to cancel. Their buyer’s agent helped his clients get over cold feet and we closed on Friday. Patience paid off. It took a year, but this agent never gave up.
How to Sell a House With a Bad Roof Without a Loss
Just because your home has a bad roof is no reason not to put it on the market in Sacramento right now, because this Sacramento real estate agent can sell your house with a bad roof without a loss to you. Believe it. I can get a brand new roof installed for you. No fuss, no muss, no upfront cost. Overcoming challenges and working around issues is one of my specialties. You don’t have to pay for this roof out of your pocket, either. There is no credit inquiry. You can have bad credit or no credit.
How does this miraculous thing happen? It happens because I have established relationships with roofing companies who know that when I list a home for sale, that house will sell. These roofing owners have confidence in me and my abilities to sell homes in Sacramento, not to mention, my track record speaks volumes. I don’t sell one house every 4 months like most agents — I close an escrow on average every 4 days.
The cost for your brand new roof will be paid from the proceeds of sale at closing. The roofing companies will wait to get paid. It doesn’t cost you anything extra, either. You’re not paying for the zero interest, and you’re not even signing an agreement. The bidding process is competitive. You are free to discuss costs and get other bids yourself as well.
It doesn’t get any better than this. It’s just one out of many services I offer my sellers that other real estate agents probably haven’t even thought about. If you have a bad roof, I’ll take care of it.
I just closed on a home in Carmichael a few days ago that had a bad roof. It was a trust sale, and the executor had never lived in the home. The roof was at its end of life, and there was quite a bit of dry-rot that I could view from the ground. The seller did not want to put any extra work into the home and preferred to sell AS IS. However, an AS IS sale would cost him a lot MORE than the cost to replace the roof. It actually saved him a lot of money to replace the roof during the sales process. Buyers don’t know how much a roof costs. Buyers might want to ding the seller’s price by $40,000 to $50,000 sometimes, when it costs less than $10,000 to replace an average roof.
Plus, now we could market the home in Carmichael as having a brand new roof! The roof over a buyer’s head is very important. A roof over your head is a reason to buy a home. If the roof is in excellent condition, it can protect everything else in the home. Not the very least of which, for a seller, a new roof protects the seller’s bottom-line profit. If your home was built prior to 1990, you probably need a new roof. Call Elizabeth Weintraub at 916 233 6759 for help in selling your house, bad roof or not.
Solution for Selling a Home in a Bad Location
It’s really hard to tell a seller who has lived happily in a home for 30 years that it will be a challenge selling that Sacramento home because it’s in a bad location, but I manage to share that news when it’s warranted. It’s my job as a Sacramento real estate agent to set realistic expectations for my sellers and to be straight with them. The apartment buildings behind this pool home were a major concern, and I knew it would turn off buyers.
Now, some agents get upset when sellers have their own way of dealing with such news, which is sometimes to ignore it and see how things go, but that’s the seller’s prerogative. It doesn’t bother me. I get it. The seller is the boss. The seller owns the home and makes the rules. I would never come back and say I told you so. That’s not my style — although I might think it because I am human. But I completely understand a seller who may have trouble coming to grips with the reality of a situation. Nobody wants to realize his childhood home is stigmatized because of a bad location. Sellers who need time to process can take all of the time they need.
This particular home had a beautiful back yard, a covered patio, sparkling pool that had just been refinished, and a separate area for parking RVs, complete with a row of storage sheds. But all those apartment windows looming over the pool was a huge concern for buyers. It screamed: bad location.
Agent after agent sent me feedback over a 3-month period stating their buyers would buy that home except for the apartments, which I forwarded to the seller. Potential buyers didn’t want strangers gawking at their kids. After the seller read the numerous feedback statements over and over, he finally asked what he could do. Well, the obvious was to lower the price, but a better option was to fix the problem. No, I don’t mean blow up the apartments. But you can erase them from the picture, just like you can in Photoshop, by putting up a barrier to block the view.
For about $5,000, the seller planted 28 Italian Cypress trees along the back fence. That process involved digging through the concrete by the fence. Once that plan was put into place, the home sold at list price to a large extended family. The seller had become so used to the building over the years that when he looked into the back yard, he did not see it. Now the buyer won’t see it, either.
Top Producer Sacramento Real Estate Agents and Objectivity
I have often said that if a client works with a top producer Sacramento real estate agent, the client never has to worry about her agent’s objectivity because objectivity is first and foremost. It’s very easy to keep a clients’ interests at the forefront of every transaction when an agent’s income is not affected by whether it closes. I can see some agents reading this blog now and exploding. They might think it sounds like I’m saying agents who don’t do a lot of business will compromise their ethics, and that’s not what I’m implying.
At least not consciously. I don’t believe a real estate agent looks at a pending escrow and contemplates what will happen to the agent if it doesn’t close. Agents are not necessarily counting on every transaction to close in order to pay their mortgage payment or maybe they are, I don’t know. I just know there is no conflict when finances are not a concern. When you’re busy all the time, the money just appears like magic. There is no wondering if you’re doing the right thing when advising a client because you know in your heart that you’re putting the client’s needs first. There is no internal struggle.
Besides, you’re too damn busy to think about yourself. All you have time for is your client’s wishes and desires.
I can recall an instance in the mid 1970s when I was interrupted and asked how long it would take me to finish an appointment with a client. I had been behind closed doors talking with an elderly client for several hours. My answer was it would take as long as it takes. I’m still the same way today, 40 years later. I give my clients all the time they need to make a decision, and I don’t push or shove them into anything they’re not ready to do. I lose some clients this way because I don’t always follow up with them; I figure when they’re ready they’ll call me back — some do, but some get sidetracked.
If sellers want to sell their home, fine, I’ll sell it. If they don’t want to sell, fine, I won’t. If the buyer makes a demand that the seller doesn’t agree with, the seller can cancel and I’ll endorse that decision — if that’s what the seller really wants. Because if the seller doesn’t care if it closes, I surely do not. If the seller wants to close, I’ll do whatever it takes. It’s very easy to be objective. I’d be remiss if I didn’t mention that clear objectivity might be a reason why some people struggle a little bit with trusting a real estate agent and sometimes squint at agents out of the corner of their eye.
Sure, I get paid but it’s not my focus. I hope nobody ever looks at me with one eye closed.
Why Your Mortgage Lender in Sacramento Matters
Out of the 7 closings this Sacramento real estate agent is working on this week, only 2 transactions, according to the mortgage lenders, are closing are time, which makes closing delays pretty much par for the course for this week. Why? Because of the mortgage lenders. A few of the escrows are delayed because the buyers could not qualify for a conventional loan and were informed at inception that they should choose FHA but instead opted for conventional. Or, at least that their mortgage lender’s story and the guys are sticking to it. In others, everybody else thought somebody else was doing a job that nobody else was doing. Total cluster-you-know-what.
It’s also possible that the buyer’s agent felt the buyer didn’t stand a chance in hell of getting an FHA offer accepted upfront so the agent wrote the purchase contract with conventional terms and obtained the preapproval letter showing conventional financing, figuring who gives a rats if the transaction doesn’t close on time. But most buyer’s agents aren’t that devious. I suspect the truth of why some mortgage lenders can’t perform lies somewhere in between.
When a buyer runs past the closing date, the contract has expired. The seller has the option to cancel the transaction. The seller is not obligated to give the buyer more time to close the escrow. A lawyer might argue on behalf of the buyer and say the buyer invested money for the home inspection, paid for a pest inspection, perhaps other reports, and showed a good faith effort to close. She might say it’s not the buyer’s fault that things were delayed in underwriting or the mortgage lender messed up.
But that’s a tough argument if the contingencies haven’t been released, and the seller might believe the buyer is in breach of contract. The seller might give the buyer a Notice to Perform and then cancel. And let’s face it, many first-time home buyers barely have two nickels to rub together, and they can’t afford to hire a lawyer. So, they better choose a mortgage lender who can properly advise them and then follow that advice.
Here is my advice for home buyers today. For crying out loud, mortgage lenders all have access to pretty much the same ol’ bag of money, and you’re not gonna save 1/2 point here nor there, so pick the mortgage lender in Sacramento who can perform. Pick the company that won’t lead you astray. Pick the loan officer who will have your back. Don’t go with the guy who dishes out apologies when you’ve lost the house.
In all of my years of working with and referring business to Dan Tharp, this mortgage lender in Sacramento has never disappointed.
