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Treating Sacramento Real Estate Agents Honestly in Multiple Offers
Much ado about multiple offers lately. So much of the stuff contained in the REALTOR Code of Ethics is simply good common sense for a Sacramento real estate agent to adhere to in her real estate practice, and it’s not “just words” to many agents. Not to mention, an agent can be reported to the Board of REALTORS and / or fined for violating the Code. It says things like a member needs to treat other members and clients honestly.
On the other hand, treating agents fairly means without prejudice, without discrimination, giving equal weight to all parties by being equitable, playing no favoritism, partaking in impartial dealings, being honorable. One of my goals when I am the listing agent and representing the seller in a transaction is to give buyer’s agents an opportunity to view the home and present an offer on a level-playing field. This means I am not sharing information about the content of offers with other agents unless authorized by the seller.
The Elizabeth Weintraub Team encourages buyer’s agents involved in multiple offers to submit their best offer upfront. Not every seller wants go through the counter offer stage in a multiple-offer situation. I have worked with sellers who enjoy that process, but many of them do not. Many sellers just want the best offer possible and do not want to dicker back and forth. So, agents who submit an offer and say “please counter us,” are a) doing their buyer a disservice by implying the buyer will offer more, which could possibly be breaking their fiduciary, and b) their words are falling on deaf ears if the sellers don’t want to counter.
During multiple offers for a home in Roseville yesterday, an agent pleaded and asked how high her buyer had to go to buy the home. I explained in that instance I can’t play favorites, and she needs to do the best that she can. My sellers did not authorize me to disclose offers.
I try to help my sellers weigh offers by looking at all aspects of the offer and not just the sales price. We discuss contingencies, debt ratios, FICO scores (if we get them), preapproval letters, and any special considerations an agent might include in the buyer’s offer. No financing rejections based on type of loan — cash is not king — closing escrow is king.
Ultimately, it’s always the sellers’ decision which offer to choose. Funny thing is yesterday, the sellers chose the offer from the agent who did the best that she and her buyer could do, and that agent did not receive any preemptive suggestions from me. This is the way the seller wanted it. Not to mention, what goes around in this world tends to come around. I hope when my Team sits on the other side of the table presenting an offer for a buyer, we will be treated honestly as well.
Commission-Gate and the Sacramento Real Estate Agent
Who knew that selling Sacramento real estate was likely to turn into its own little Commission-Gate? Over my past 40 years in real estate, this was a first for me. Now, we know buyers are a bit desperate vying for certain homes, and agents can be all over the map when trying to help them buy those homes, too. But holy moley, you don’t throw a bag of money at the listing agent, for heaven’s sake. No, I don’t want to see the gold watches pinned inside your coat, button yourself up and get outta here.
Let’s set aside the fact that it’s against the law, probably violates the Code of Ethics, and it breaches an agent’s fiduciary relationship with her seller, and look at what buyers or their agent — hard to say where the idea originated — were coming from. See, Mikey here really wants this house, see. Poor Mikey and his dame, they just wanna buy a house, and they know it’s uncool to be packing heat. They don’t wanna wear no bracelets, much less end up in the stinkin’ meatwagon heading off to the Big House; so, instead, see, they’re just gonna sweeten the deal with moolah.
I can’t believe a buyer’s agent asked this Sacramento real estate agent yesterday to accept a kickback on the commission. She offered 25% of her commission to me as a bonus if I would just get her buyers into that house. What?
Yeah, my jaw is still hanging open. I had to tell her to hang on her to cabbage and just write the best offer that her buyers could write. I’m nobody’s stool pigeon but I’m kinda floored that she had the gall to ask such a thing. Is this Chicago? What’s next? No, I’m not going there because sure as crap somebody will try to do it if I say it. I’m not putting ideas into anybody’s head, not even as a joke.
This market is not bringing out the best in people. Some real estate agents are becoming forgetful. To some, the Code of Ethics is something dark and murky, in their past; they’re too busy crawling over dead bodies to get to that pile of gold. We simply cannot set aside our professionalism because the market is hard or inventory is low. I find this kind of behavior troubling because it reflects poorly on all of us.
Mobile Signers Make House Calls for Sacramento Home Sellers
Many home sellers in Sacramento do not realize that mobile signers make house calls. A seller is not required to make the trip to the title company to sign closing escrow papers. The title company, more or less, can come to the seller. Darn right, I can hear some sellers saying. Yes, it’s true, this Sacramento real estate agent works with a lot of grumpy people but that’s OK. I make allowances for people older than me. Younger though, all bets are off. You whippersnappers, you hop on your segways and skedaddle over to the title company, and no whining.
Even my sellers of Sacramento short sales can get a mobile signer to come to them at no charge, providing the bank will allow the notary fee on the HUD. Yet, any seller can utilize a mobile signer. Other sellers, though, generally have to pay a little bit extra for the service. Almost all title companies charge some type of notary fee, although it is not much. Some do not charge a notary fee and consider it part of the transaction built into the escrow fee. However, when a person drives across town to meet a seller, there generally is an additional fee for that service, usually around $125.
I have a lucky seller signing closing docs next week on a short sale and the mobile signer is coming to her house, and the seller doesn’t have to pay anything out of pocket. This woman is in her 80s. The mobile signer fee is approved on the HUD by her short sale bank. We build that fee into our short sales, especially to accommodate older sellers who find it difficult or irritating to drive.
Moreover, very busy sellers love mobile signers as well. Not only will the mobile signer come to your house, but you can meet the notary at a Starbucks or your office or even at the local bowling alley, if that’s where you prefer. There is no reason to have to make the trek into the title company to close escrow, if that’s inconvenient. Ask your Sacramento real estate agent how you can get a mobile signer to make a house call. Twenty minutes to sign docs and you’re done.
Not Every Sacramento Home Buyer is a Buyer
Every Sacramento home buyer should enjoy the luxury — and it is a luxury — of working with a buyer’s agent who will check out the property records before writing a purchase offer for that buyer. A Sacramento buyer’s agent at the very least should examine basic details but so many do not. When a buyer wants to write an offer, a lot of agents will just write it without giving much thought to the possible consequences for a buyer. I suppose they might think it’s not their job or maybe they don’t know how.
An agent has many sources at her or his disposal to find this data. At minimum, even if an agent doesn’t run the comparable sales for the Sacramento home buyer — which for my team members would be inexcusable — the agent should check to see who owns the property. Is it one person? Is it a trust? Does the owner’s address match the property address or are the owners living out of state? A quick call to the listing agent would confirm whether two people are on title or if one of them is deceased. You know, just stuff that makes the entire transaction run smoother and gives the buyer enough information to make an intelligent decision.
A potential Sacramento home buyer called yesterday about wanting to buy a home along the river that is a short sale. He asked if moi, his newly found Sacramento real estate agent, would be willing to write a purchase offer for him. As an experienced short sale agent, the first thing I did was look at the tax rolls. I see that this is an investment property for the seller. The second thing I notice is his second loan is a gigantic refinance for many thousands of dollars, and the lender is National City.
National City is now owned by PNC. This makes it a PNC short sale. A second loan held by PNC, especially a hard-money loan that carries recourse in California, is a difficult short sale to negotiate. That’s because PNC knows it can go after the seller personally and try to collect the full amount of the loan should the home go to foreclosure. When the security for that second loan is wiped out, because it’s a cash-out refinance, that lender, you can bet, will pursue it.
If the seller is not willing to negotiate with PNC upfront in this type of short sale, well, the odds are it will not get approved as a short sale. If PNC approved the short sale, by law it must release the seller from liability, but it is not required to approve a short sale.
Not only that, but there is a trustee’s sale pending shortly. It is very possible that a seller who waits until the last possible minute to put a home on the market as a short sale prior to a pending trustee’s sale is not a seller who is willing to negotiate upfront, but you never know. Weird things happen in real estate every day.
Armed with this information, the buyer chose to move forward and write an offer because he decided that he had little to lose. He was prepared to be disappointed. I asked a team member on the Elizabeth Weintraub Team to prepare an offer for him. My team member explained that we need a preapproval letter to accompany the offer because the way to postpone a trustee’s sale is to submit a purchase offer. The bank will not allow submission of a purchase offer without a preapproval letter. An offer without a preapproval letter is not an offer. It is an incomplete offer and considered insufficient to postpone a trustee’s auction.
The buyer could not produce a preapproval letter. He was irritated about my team member’s insistence on it, too. You see, he had sold his own home as a short sale a few months back.
The buyer said fine, he’d find another Sacramento real estate agent to write his purchase offer. That was actually a very good idea on his part, but a wasted effort.
When One Thing is Not Like the Other Things
A Sacramento real estate agent needs to possess extraordinary powers of observation, just like a journalist. My late father-in-law, a former Chicago Sun Times journalist, would often boast to strangers (and his family) that he was a “proFESSional obSERVer,” which was generally used in a conversation to support dissent, to build a case for his opposing point of view. Half-jest but half-serious, too.
Sometimes, an agent can tap a simple component in the power of observation by isolating and analyzing the one odd thing that stands out from the others. This happens when one thing is not like the other things. Let’s take a situation when sellers receive multiple offers from buyers for, say, single-level homes in Elk Grove. Even better if a single-level Elk Grove home is located on a cul-de-sac, with hardwood floors throughout and a 3-car garage. Then, in the middle of dozens of offers arrives a lone cash offer for significantly more money. Sort of stands out like a sore thumb. Like when one thing is not like the other things.
That offer would be the one thing that is not like the other things. A seller might want to grab that offer and latch on to it like Gollum stroking his precious ring. This is the part in which a Sacramento real estate agent might caution the seller, and make sure the seller understands the possible consequences. When one thing is not like the other things, something might be wrong.
For example, I wandered through my vegetable garden a few days ago, on a hunt for ripened serrano peppers. Because it’s October, the garden is overgrown; oddly enough, we have tiny little tomatillos that are no bigger than an olive. For some reason, the tomatillos are fairing poorly this year; their entangled vines are crawling up the sides of another garden box, blocking the path. My focus was on the tomatillos, wondering whether my husband is right and we should yank them out.
As I passed the hydrangeas, something caught my eye. Among the decaying purple and pink flowers, I spotted a peculiar object. Whoa. It was not like the others. It was a cucumber. That stopped me in my tracks. A cucumber does not belong there. This is one thing that is not like the other things. The cucumber had crept over on a vine and worked its way up the hydrangea branch. Just the right size, too. I plucked it and ate it on the spot.
That is an example of when it’s a good thing that one thing is not like the other things. Sometimes, though, when one thing is not like the other things, it can be a bad thing.
Take the cash buyer who offered way above everybody else for that home in Elk Grove. The cash buyer caused the sellers unnecessary stress and commotion throughout the entire transaction. Demanded kickbacks, insisted the seller pay for an inspection that the buyer ordered himself and made up his own rules as he went along. The buyer reneged on verbal assurances and in general made himself a royal pain to the seller. At closing, he made his buyer’s agent wait four hours at the home, in an empty house, to deliver the keys.
