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Sacramento Spring Home Selling Starts in the Rain
One of my Elk Grove sellers yesterday almost passed out when I called to say we had sold his home. I’m not joking. He could not believe it, and that’s putting it mildly. One day he’s a guy with a home in Elk Grove that is almost upside-down with a roof at the end of its life and the next day he’s slipping $50,000 into his pocket. I’m sure that’s the way it seemed to him. “Buttt,” he stuttered in disbelief, “We haven’t even been on the market for 2 weeks yet.”
When a listing is done right, much of the work is done upfront. Sellers don’t see the hours we agents pour over our listings, highlighting this feature, brightening this spot, cropping thusly, and plastering it everywhere online. Or the time invested to study the comparable sales and help the seller to choose just the right sales price. Or the number of inspection reports obtained from roofers, pest workers much less our own visual inspections, rearranging, color coordinating and staging the home a little bit. What they see is a buyer walking in the door and cooing, “I want this home.” It sends sellers into shock.
It was an unbelievable day yesterday for this Sacramento real estate agent. I don’t always have days like that Wednesday or I would probably drop from exhaustion. In addition to receiving an award from Leading Real Estate Companies of the World at my office meeting, bringing in a breakfast item for a potluck to honor veteran and former SAR president Barbara Harsch, and adding another curb scrape to the front lip spoiler on my car on my way to drop it at the body shop, it seems like everything happened in three’s. First, I took 3 new listings: met with the sellers, inspected the homes, shot my photographs, signed all the paperwork, explained how showings work, all that stuff.
Lyon Real Estate and I are bringing to the Sacramento spring home selling market today a gorgeous remodeled home in East Sacramento at 700 San Antonio Way at $649,000. The attention to detail in this remodel is astounding. Another new listing is a home in Carmichael, just north of Fair Oaks and east of California Street at 6145 Fountaindale Way at $350,000. This is a single-level, open floor plan with vaults and attached deck, surrounded by mature landscaping, built in 1992. The third new listing is located at 17 Oasis Court, which is on a culdesac, built in 2008 (among newer homes in central Sacramento), with 4 bedrooms and 2 baths at the affordable price of $195,000.
On top of this, I put 3 listings into contract and into escrow. Like the home of my Elk Grove seller who almost had a heart attack. I picked up 3 new clients by answering my phone as I was driving around Sacramento, too. We’re just getting started in this Sacramento spring selling season. See, focus. That’s the name of the game, and an agent must be on top of her game. Besides, it was too rainy to take my daily bike ride through Land Park yesterday anyway.
A Sacramento Mortgage Lender Can Make or Break the Escrow
The thing about primarily representing sellers in a transaction is a listing agent rarely gets the opportunity to recommend an excellent Sacramento mortgage lender to a buyer. This is normally handled by the buyer’s agent. That doesn’t stop lenders and their lender reps — the mortgage loan officers (MLOs) — from nonstop spamming / harassing and marketing to listing agents in hopes of attracting their business, but quite frankly they are barking up the wrong tree and going about it in the wrong way.
No veteran real estate agent is likely to recommend a mortgage loan officer due to a brief office meeting or over leisurely coffee breaks (what are those) at Starbucks. Agents recommend loan officers who have proven themselves worthy of a recommendation through performance. We put them on our list. They can’t ask to be added to our list because we won’t add them.
Sometimes I run into a situation with a buyer that is perhaps a bit iffy, which is a good way to describe some of the risky situations I spot. If I don’t recognize the mortgage loan officer in those instances, the sellers and I might suggest that the buyer get a second opinion from one of my preferred lenders. They are preferred because I know and trust them to thoroughly investigate and analyze a situation before issuing a pre-approval letter. They discuss options and make sure the borrower understands the mortgage choices at hand.
When a mortgage loan officer informs the agent, say, a week or so before closing, that the buyer can’t remove the appraisal contingency when an appraisal has been completed, a Sacramento real estate agent might rightly wonder why. Perhaps the mortgage loan officer will say something like the borrower was upset over all of the costs to get an FHA loan and decided to switch to conventional.
You know what that tells me? It tells me that the mortgage loan officer did not thoroughly explain the GFE to the borrower upon inception of the loan. It also tells me that the mortgage loan officer herself probably suggested the conventional loan as an alternative, not realizing that the buyer’s contract did not specify a conventional loan. The sellers will most likely consider this to be a contractual change, whether the MLO realizes it.
When presented with reality, the MLO might argue and say the conventional loan is better for the seller. Really? It might be for the buyer, but it’s not necessarily better for the seller. What if the seller had a former buyer in escrow who had an FHA appraisal previously completed, and what if that was the reason the sellers chose the present FHA buyer? No appraisal problems. Now that the buyer is changing financing, it changes the type of appraisal, and it could affect the entire transaction. Moreover, why would a mortgage loan officer who is hoping for repeat business leave the buyer’s agent out of the loop and overstep?
Perhaps the most endearing quality would be if the MLO desperately tried to justify the new financing by explaining to the listing agent how conventional financing works in comparison to FHA — especially to an agent who has been selling real estate before the MLO was born. Some mortgage lender reps set their own paths for failure, and they don’t need any help from anybody else.
Finding a Replacement Property for a 1031 Exchange
Lots of investors from the Bay area call top-producing Sacramento real estate agents when they decide to sell — which is how I end up working with many of them — and the shift I spy on the horizon now is to 1031 exchanges. You might not know this, but I got my start in real estate in the 1970s by working solely with investors, many of them first-time investors. I sold investment properties exclusively for about 9 years, and I moved into real estate from my certified escrow officer position, during which I processed and closed a large number of 1031 tax deferred exchanges.
It’s funny how some things can come full circle. Now that the market in Sacramento is picking up, more investors have equity and some of them want to put that equity to work elsewhere. They don’t want to pay taxes on the sale of their investment property if they don’t have to, and most of them don’t as long as they find and identify a replacement property within the 45-day period and effect a 1031 exchange. (There are minor sub-rules that don’t apply to very many, so I won’t go into those.) The more important rule is an investor has 180 days to close escrow.
My new clients have a rental home in Elk Grove they want to exchange. They don’t live in the area and have discovered how difficult it is to manage an investment property without family nearby. A drive into Sacramento from the Bay area can take 2 to 3 hours each way. Some investors might prefer to move their equity to another town.
A 1031 Exchange wouldn’t be such a nagging problem if we had more inventory in Sacramento. I try to explain that investors actually have about 75 days, if you look at this systematically. Once an offer is received to buy the investor’s rental property, that escrow period is about 30 days, give or take. That means 30 days + 45 days = 75 days. But people, being people, sometimes look to the worst case scenario. Like, what happens if they can’t find a replacement property?
Being in real estate, I know they will find a replacement property for a 1031 Exchange, even if they’re looking out-of-area, because I know real estate agents and how the business works. But that doesn’t help the investor if they’re not standing in my Jimmy Choos, and looking at this from my viewpoint.
This is yet one more reason why we need more inventory in Sacramento. To give investors an assurance that they can find that replacement property, and two more properties along with it as a backup. If you’re thinking about deferring taxes on the sale of your investment property, talk to your accountant and then call this Sacramento real estate agent, Elizabeth Weintraub. I’d love to help you to locate a qualified intermediary and sell your investment home, 916.233.6759.
Dealing With Difficult People is Easier If We Look at Ourselves
Dealing with difficult people in a real estate transaction is a bit more challenging than dealing with difficult people in a normal day-to-day life because you can’t get rid of them on a whim, and you have to figure out, no matter what, how to get along with them. It’s kinda like getting married without the engagement or wedding. They’re just there, and you have to not only make the most of it, but one has do it in such a manner that these difficult people come to believe that you’re the most wonderful person on the face of the planet.
There are people who will tell you that even I, yes, this agent, can be difficult, although I know my regular readers would scoff at that premise and say oh, pshaw, but you guys are not my travel agent. That’s the guy who has to put up with me demanding stuff like, you know that photograph of the hotel room that says it is not indicative of the hotel room choice I have selected, well, that’s the room I want. It exists, and I want it. I don’t want a partial ocean view, or ocean view. I want an oceanfront, and not just an oceanfront, but a corner room, and it should be on the top floor. My heart goes out to this poor guy. He has to work with me. No mini bar? What do you mean there is no mini bar??
Yesterday I read an article about how not every person should expect to get a private room at the hospital. Oh, man, wait until I get old enough to be hospitalized on a regular basis. I will be terrible. I will not understand why ICU is on the 5th floor when I want a room on the 12th floor. Away from the elevators. They should move ICU to another floor. The sickest people should have the best view. This is how awful I will be, I just know it.
The article said that there is no clinical proof that sharing a room with another sick person increases your chances of catching whatever they’ve got. This is not something I have had any reason to consider but now that it’s been brought to my attention, I can’t help but figure I won’t be quiet until I know the disease of every patient on my floor. That way I can choose who I might not want to follow to the bathroom. If the doctors and nurses won’t give me that information, I’ll grab my own legal pad and make the rounds myself. People will tell me because I’m holding a legal pad.
I hope I never have to go to the hospital. I could not live with a guy in a bed next to me watching television after 9 PM. I would grab whatever breakable object is within my reach, maybe that empty bottle of grappa I’ve hidden under my pillow, and propel it toward the television screen with all the brute force I could muster. Then I would pull the covers over my head and pretend to snore.
And this is why I understand people with particular preferences and can work with difficult people. We all have our little quirks. If you’re looking for a real estate agent in Sacramento, you may as well call Elizabeth Weintraub at 916 233 6759 because you’ll find worse agents but you won’t find any better suited for you. At least try to catch me before I go on vacation or into the hospital.
Why Condition Matters When Selling Sacramento Real Estate
Condition of property is one of the big three elements when selling Sacramento real estate— or any home in the Sacramento seven-county region — but it’s often overlooked or dismissed by sellers. They get used to their house the way it is. They might say something like, “Oh, we’ll let the buyer take care of that issue.” Unless the house is pretty much a tear down, or needs such extensive work that we call it a fixer home, a home buyer will not do those repairs / corrective work. End of story. Only an investor will buy that kind of home today. And investors aren’t paying full price this spring.
The three key elements for selling a home in Sacramento are:
- Location
- Condition
- Price
You can have a great price at market value that would apply to a turnkey home in a fabulous sought-after neighborhood, and it still won’t sell because the home is not fixed up. You can have a great price for a good location and a home in move-in condition, and the home won’t sell if it’s located in a bad place like under a freeway or next-door to an apartment building.
If the home needs major work, you should just do the work before putting that home on the market or else adjust the sales price accordingly. If the home is located in a bad location, your sales price also has has to come down and be adjusted for that location. You can’t get top dollar for a beautiful home in a bad location. You can’t get top dollar for a fixer home regardless of its great location.
These are the rules of real estate. I don’t make them up. These rules are not something this Sacramento real estate agent has plucked out of thin air or can bend at will but that’s the way some people react to the news.
The only way you’re getting top market value for your home is if that home has a great location and is in top condition. You need all three elements to command the top of the market, even in a seller’s market.
Buyers want a turnkey home in a good location, and they don’t want to do any work. If you’ve got ugly carpet, you need to replace it or be prepared to be hit with a lowball offer that will far exceed the cost of replacing that carpet.
