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Are You Really Prequalified to Buy a Home?
Just because a buyer is holding a preapproval letter from a lender, it does not mean that buyer is prequalified to buy a home in Sacramento. Of course, the buyer does not understand that because, after all, the lender issued the letter, what could possibly be wrong with it? I don’t have enough time in the day to talk about how many things could be wrong with that preapproval letter, but I’ll tell you this, no seller wants to find out in underwriting that a particular problem exists that should have been discovered before the darn approval letter was issued in the first place.
If you think these kinds of thing don’t happen, then you don’t work in Sacramento real estate. Faulty preapproval letters are almost becoming the norm. Each one is different, so a seller needs to read the letter to figure out if the lender even has a loan application from the borrower. The lender might not. The lender is not required to obtain a loan application in person prior to issuing a prequal letter.
We are presently working with a very sweet couple who hope to buy their first home soon. Like most first-time home buyers, they are filled with the excitement and a little bit of stress over finding a home. The home buying process is very new to them, and they aren’t sure where to start, but they knew enough to go to their local credit union and a major bank to get a loan pre approval letter before calling me.
Hot off the presses from the credit union, that pre approval letter was their ticket to viewing homes — because it meant they could finally write an offer if they fell in love with a home. The major bank was issuing the preapproval letter as well, although it seemed to be delayed by a few days. It takes only a few hours to get a preapproval letter from our preferred mortgage brokers.
Just to compare rates and service, we suggested the buyers call Dan Tharp at Guild Mortgage. He handled the refinance for my home a long time ago, and I’ve referred Dan Tharp for years. Honest, ethical, hardworking, devoted to the mortgage business and extremely smart. He verified the buyers and guess what? They are not pre-approved. The credit union made a big mistake. The buyers verified this with the credit union as well. They didn’t just take Dan’s word for it, although they could have. Because now Dan is helping them to fix that roadblock, and they will be back on the road to home ownership in no time at all.
Just because you are holding a pre-approval letter, it does not mean you are actually pre-approved. Not even if it comes from the biggest credit union in California.
There is a Buyer for Every Sacramento Home
In the mind of this Sacramento real estate agent, there are no bad homes to sell in Sacramento because there is a buyer for every Sacramento home. I have learned this the hard way over decades, and I’m sharing you the pain of wondering if your home will sell because it will. You just need the right buyer for it. There is a buyer for every home. Even homes that are in the wrong location or have some other sort of defect.
Now, an experienced real estate agent will figure out from the get-go who that buyer is and target that buyer. You don’t need 20 buyers for your home, and you don’t need 15 multiple offers. A seller needs that one buyer who wants the home and will close escrow at terms agreeable to both parties. It really is that simple. There is no need to complicate the situation.
For example, last week I listed a couple of homes that are very different from each other. One home is close to the Foothill Farms neighborhood, near Madison. The sellers were concerned that they needed to rip out the carpeting and replace it. They also were thinking about pulling off the wall the entire tub and shower combination and installing new. A cabinet drawer was not seated properly in the kitchen. That drawer was a concern for the sellers. I made my suggestions, which were minimal and probably not what I imagine the sellers were expecting to hear. I helped them to locate a couple contractors.
I also correctly identified who the buyer would be and, sure enough, that’s exactly who we are in escrow with today. I described that person to a T. That’s who bought it, too. And this is not a person I personally know, in case you’re wondering. This is what experience brings to my sellers. They can pay the same for a new agent as for an experienced agent, and experience tends to provide better results.
The other home was an astonishing disaster. Not at all what I had been expecting or what the sellers had imagined. They hadn’t seen the home in 25 years. It was, for lack of a better phrase, a shambles. But have no fear, there is a buyer for this kind of home, too. That buyer is a flipper, a person who will try to negotiate the lowest price possible to maximize future potential profit. I know the kind of buyer we’re dealing with, and we have a few of those buyers right now vying for this home. The right one will buy it. Because there is a buyer for every home.
Why Real Estate Printing is Dead in Sacramento
The fact is all agents do not sell homes in the same manner, especially those confused by today’s technology; however, many top producers who love technology find it is generally pointless to revert to “old school methods” such as printing four-color flyers and sticking flyers in a box on a sign post, even though they may still retain other dated marketing habits. Real estate has changed a lot over the years, and it’s changed even faster over the past 5 to 10 years. The real estate printing that used to work well for a Sacramento real estate agent doesn’t necessarily work so well anymore.
I love to tackle listings that other agents can’t sell because they tried to do it in print. I just closed two homes that two other agents had tried to unload for months without any results. My approach is different, and I tailor each listing to appeal to my targeted audience. The first thing an agent should do is figure out who is the intended audience for that home? Who will be the buyer? And then market to that buyer using new technology.
I get such a kick out of sellers who come up with these age-old ideas that they believe are fresh and new when they don’t work anymore. They read it in a book somewhere, found it online, saw it on cable or maybe that’s how they sold a home 20 years ago. I worked briefly with an disgruntled and ornery seller last year who sounded like he was itching to cancel the listing because I did not want to put flyers on the sign post. I explained why flyers on the sign post was a bad idea. It was his idea, and he didn’t want it to be bad.
Putting flyers out in a flyer box in the front yard is a really bad idea for many reasons. For starters because kids steal them, if they aren’t removed first from the flyer box by a competitor. Second, it completely negates the purpose of the Virtual Agent signs I employ. My virtual agent signs allow a buyer to get information without talking to an agent, which is what some buyers prefer. They can:
- Call an 800# and get a virtual tour downloaded to their cellphone immediately
- Text to a special text number on the sign for an immediate cellphone download
- Use the QR code to retrieve immediate information to their cellphone.
There are also 3 ways to get more information by talking to an agent. They can:
- Call the large number on the sign panel to speak with a floor agent
- Call my cellphone number from the sign rider
- Call my buyer’s agent cellphone number from the sign rider
Walk by or drive by traffic can also go to my website on their smart phones to look at all of the property details. Others will find that home during neighborhood searches online from their home computers, laptops or iPads. Everybody is online and wired. If buyers can grab a flyer, they won’t use the Virtual Agent system or call. If they don’t call or contact me, I can’t track them or follow up, and they will probably never see the home in person. I capture all of their information when they utilize Virtual Agent. I don’t get that info if they bypass me.
If a buyer’s agent is showing a home, that buyer’s agent will print a flyer for the buyer with that agent’s contact information. They generally don’t want the buyer carting around a flyer with the listing agent’s contact information on it. That’s why sellers don’t really need flyers inside the home, either. An open house agent will print her own flyers; buyer’s agents print their own; and even buyers themselves print their own online flyers. It’s a waste of time and energy to produce flyers when the home is available to view online.
But you know what, even though I disagree, sometimes I will still print flyers for my sellers who insist. A hundred bucks buys a lot of happiness. But *print flyers are really unnecessary today for most homes in Sacramento. Real estate printing is a dead practice in town. Ask a top producer how things have changed in real estate. You might be surprised.
*An exception would be the luxury home market, in which brochures are the norm.
Why List Price to Sales Price Ratios Are Useless Agent Comparisons
I get it that’s it’s super difficult for many people to hire a Sacramento real estate agent, but comparing list price to sales price ratios is meaningless. I also realize that it’s especially challenging to hire an agent if those same people don’t really understand the profession nor harbor much respect for agents. It’s tricky for some of us to operate in an environment where so many in the public openly despise real estate agents. I think our popularity lies somewhere between used-car salesman and funeral home directors. What a wonderful world.
The way I make it through decade after decade of selling real estate is not to pay a lot of attention to the negative opinions that some people form because they don’t apply to me. I know that I do an excellent job for my clients, and these people are happy with my performance. Sometimes, though, I run into potential clients who have not dealt with a real estate agent like myself, and they don’t understand how I do what I do, and they expect to understand it instead of appreciate it. The only way to really understand the real estate business is to put on my six-inch heels and amble down railroad tracks wearing headphones with your back to the oncoming train.
Although I have never been asked for my list price to sales price ratio, a potential seller asked me for it. I didn’t even know my number because it carries no value. It’s like a Select Comfort sleep number. Some people like 40 and others 100. I ran my production numbers for last year, and that number is 104.21%, including the good deals buyers got –which contained some under-market transactions in a seller’s market when most buyers paid over-market, if they were able to buy at all in last spring’s frenzy.
See, this is the problem with list price to sales price ratio. So many variables. You can have a short sale, for example, in which the market value is, say, $300,000, but the bank demands $310,000 at the 11th hour, holds the buyer hostage, and it ends up closing at $310,000. Does that make the listing agent a much better agent? Not really. Out of the agent’s control. Or, what about the sellers who insist their home is worth $500,000 and secretly hope a buyer will lowball. I take some of those listings because it’s not my place to choose the sales price. If that overpriced home finally sells at $450,000, does that make me a bad agent? Not really.
What about changing markets? Markets that shift from a seller’s market to a buyer’s market, which can happen in any given time period. That affects the list price to sales price ratio. On top of this, there are a dozen other scenarios that can affect these ratios, including who is to say an agent who routinely sells at 104% is not deliberately underpricing her listings? Hmmm? But probably the biggest factor is every agent has the ability to change the list price to match the final sales list price prior to closing, and then the ratio is 100%. I know some agents who do it just so they can say their ratio is 100%.
List price to sales price ratios mean very little, and then mean even less when an agent’s production is limited to say, 6 or 8 homes a year. The moral is don’t judge an agent on list price to sales price ratios. If an agent with a high ratio is telling you it’s meaningless, that in itself should speak volumes.
Rock and Roll Never Dies and The Music Doesn’t Fade Away
An older, and by older I mean over-60 Sacramento real estate agent gets far more respect from younger people nowadays than an aging rock-and-roll star. Thank goodness I am in the right profession. The motto far back as I can remember was you’re not getting older, you’re getting better. And wiser, hopefully. Nobody tells me that I am too old to sell real estate and lives. But there seems to be a backlash against entertainers who aren’t as spry as they used to be simply because they’re older. It’s enough to make an older person want to whack these little punks across the noggin with a cane.
Some reporter who probably used to have a hard-on for Bruce Springsteen complained that The Boss wasn’t performing like he did at the peak of his career which, according to that guy, was at age 26. LOL. When I read that editorial, I could only imagine the shrieking outrage from fans and even suspected that perhaps the reason for such drivel was to spark an uproar and bump up online hits for the Sacramento Bee. On the other hand, it’s a silly opinion of a person who probably secretly jacks off to Thunder Road. Everybody except that guy apparently is mad for a live Bruce Springsteen concert. Springsteen puts his all into every show. Pure adrenaline.
It’s a big thing now — for Baby Boomers especially, and we are targeted like no tomorrow — to attend concerts headlined by rockstars of our youth. It also provides retirement income to some whose managers ripped them off over the years. It’s not like reliving youth but some memories do return that were long ago buried, and that’s kind of sweet. The Happy Together Tour comes to mind. It’s also a yardstick to use so you can laugh at your goofy self as a teenager / college student and then understand how far you have come. (I don’t have yardsticks known as kids.)
What bothers me somewhat about these shows is how snooty I have become about concerts. It’s almost 50 years later. I still want front row seats. Only now, instead of camping out in front of the theater for hours beforehand or squeezing my way to the front by-hook-or-by-crook through throngs of stoned-out freaks, now I am willing to pay for that privilege. I am not standing in the hot sun (OMG, melanoma) or sleeping on the sidewalk (my aching back), no way, Jose. And, I expect a comfy chair. If I could enjoy concierge, valet and cocktail service, all the better. I wonder what my younger self would have said about this attitude?
Don’t answer that.
