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Sellers Who Do Not Trust the Real Estate Agent
Most clients will say that they completely trust and value a professional opinion until the day comes when they disagree with their real estate agent. The agent can see it coming, too, but by then it’s generally too late because the client will have already said something emotionally telling like, well, if you don’t agree with my opinion of value, then you should ask my daughter. The daughter who is not a Sacramento real estate agent and who has no experience in real estate.
The agent can haul out the heavy artillery, the trending charts showing the past year or so of real estate activity in that particular neighborhood, including days on market, sales price to list price ratios, absorption rates, median sales prices, inventory levels, but it won’t matter. It won’t matter because the client will spot a home that is nothing like the client’s home but that home will have sold for much, much more than the true market value of the client’s home. That particularly expensive home might have sold for more because it has a spectacular view, which the client’s home does not. That home might have sold for more because it is 1/3 bigger than the client’s home. That home might have sold for more because it has upgrades and features that the client’s home might not possess.
None of this will make any difference to the client.
This could be a case in which the client might utilize the per-square foot cost of that more impressive home and apply the same value to the client’s home, therefore proclaiming a higher sales price that will not appraise under any circumstances. The Sacramento real estate agent can point out that any reputable appraiser will use 3 to 6 comparable sales to justify the sales price, and explain that an isolated sale is not enough to substantiate a higher price. Because the comps are the comps are the comps; however, the agent may as well be speaking to a Muppet.
The agent can invest hours preparing a comparative market analysis, utilizing several independent sources, but it won’t make any difference to the client because the client wants the price that the client wants. To educate the client or try to justify a different opinion means only one thing. It means that the client will choose a different agent who agrees with the client. Probably an agent the seller’s daughter knows.
And this is why clients will say that agents only tell them what they want to hear. Because these are the very people who set themselves up for failure from the start. They sabotage themselves.
By the time the home closes escrow at a much lower price, the client will remember the agents. He will recall the argumentative agent who refused to agree with his point of view, and he will recall the agent who sold his home for so little that she forced him to “give it away” — and he won’t have anything good to say about either agent. They’ll pretty much all be scum is his book. And that’s too bad.
How to Unwind After a Long Day of Sacramento Real Estate
Flowers in bloom near WPA in William Land Park, by Elizabeth Weintraub
The flowers are in bloom on many of the trees, bushes and vines in Land Park, especially over the arches past Fairytale Town. When I ride my bicycle past the WPA Rock Garden, the scent of springtime flowers flows through the air, and it’s unmistakably sweet smelling. This is the second stretch of my bike ride where I can pick up great speed and shift from 5th to 6th and eventually 7th gear as I go down the hill and onto the road that continues around the golf course.
The bike ride takes me 35 minutes from my home in Land Park, down Riverside, around the entire perimeter of William Land Park and back, regardless of which side streets I might explore. I basically face one stoplight on 8th Avenue by Vic’s Ice Cream to circumvent and the other street detours help me to avoid the lights.
Father hugging daughter, his face illuminated, William Land Park, by Elizabeth Weintraub
This is my way of unwinding after a long day of Sacramento real estate. Sometimes, I take a break in the middle of the day and hop on my bike, too. The only problem is the wind hits the space between my bluetooth Jawbone and my jaw, separates the device from my face, causing noise and static on the other end. I have a handy dandy rack for my cellphone right on my handle bars.
I guess most people would say I should just enjoy the ride and forget about answering my phone. But that’s about as useful as telling a dog not to eat the steak you just threw on the floor.
Arches overlooking William Land Park behind WPA Rock Garden
I’m thinking maybe I should shop for a new bluetooth device. One specifically made for talking on your cellphone while riding a bicycle. The new ERA Jawbone isn’t it because it’s too small and the smaller they make them, the less effective they seem to be. I had Jawbone replace my device but it didn’t improve reception, and I’m now sending it back. If you have any ideas for a good bike-riding bluetooth, let me know.
Astonishing 2014 California Real Estate Laws in the Works
This year is shaping up to be an interesting year for new 2014 California real estate laws, which will affect us in Sacramento. For so many years the new laws have been more narrow, but this year will be different. In some ways, you’ve got to wonder why our California Assembly members had to propose some of these new real estate laws, and the answer is because they don’t (shudder) exist or our present laws are unclear. It’s enough to make some of us feel like dropping out and engaging our brains elsewhere such as searching for a Pinata Party during Plants vs. Zombies, or throwing a sheet around our waist and dancing through the house yelling toga, toga.
Let’s look at AB 1513, the so-called Squatter’s Bill. This is a piece of legislation that will allow law enforcement officials to remove unwanted persons from your vacant property. That’s right, under current law, a vagrant can break into your home, set up shop and you can’t immediately throw them out. They can party away like in Animal House for 30 to 60 days while you helplessly look on, dangling a piece of paper that says you’re entitled to an unlawful detainer. Well, I probably could get them out. As a Sacramento real estate agent, I have once resorted to banging loudly on the door and screaming FBI, I hate to admit, and then listening for the back door to slam as the squatters scatter like rats.
Another is AB 2039, targeting auction companies such as Auction.com, which is owned in part by a former third-party vendor company that processed short sales. This company has partnered with bad-mortgage purchasing companies such as Nationstar and forces real estate agents to allow this company to take over the transaction — kind of like a squatter, you don’t want them but you can’t get rid of them. This legislation would at least hold the real estate agent harmless from the actions of the auction company.
It boggles my mind as to how these auction companies are successful anyway. Because a buyer must pay a 5% premium to the auction company (on top of the commission) to buy the home as a short sale, and the bank wants market value. Seems to be a conflict of interest in that area, plus, how does the buyer obtain an over-market loan when it won’t appraise? Fortunately, I have been successful at not having to deal with Auction.com in any of my hundreds of Sacramento short sales, knock on wood.
My favorite newly proposed real estate law is AB 2136, which would clarify that a real estate agent is not required to keep a record of Tweets and Texts pursuant to a real estate transaction because those forms of communication are not considered a document. This means when I’ve receive a text message during sex, I can safely answer it in the throes of passion and not worry if it’s later deleted. I like that.
See, all good things coming out of our California Assembly, designed to improve our lives. Now, if they could just pass the mortgage forgiveness extension, we’d be well on our way to recovery. As it stands now, all of those poor homeowners who have successfully completed a principal mortgage reduction through a loan modification are positioned to get hammered on taxes. We have an exemption for short sales, but not loan modifications. Oy.
Appreciation vs. Market Recovery for Sacramento Real Estate
If a reporter at the Financial Times does not understand the mathematical calculations of our Sacramento real estate market, it stands to reason, I suppose, that the average consumer is confused as well. Or, maybe some of us just didn’t pay enough attention in math class, hard to say. Not everybody likes math or realizes in school how useful math is when we’re all grown up. If you’re struggling to understand what has happened in the Sacramento real estate market, I’ll lay it out for you in terms that are easy to understand.
From January of 2012 through January of 2014, our Sacramento real estate market median price has increased 50%. When I mentioned this over the weekend to a Financial Times reporter, she said, “But your market has fallen at least 50%, so that means you’re at breakeven now, right?” I might have rather stuck hot pokers in my eyes than be forced to learn that an isosceles triangle has 2 equal sides, but I do comprehend that one can’t solely pluck the median price range and decide our market is back to normal.
- For starters, that 50% price increase applies only to the median price. Our median price moved from $160,000 in January 2012 to $240,000 in January 2014.
- Second, averaged over those 2 years, that’s only 25%, and the market is fairly flat today.
- Third, homes priced above that price point and below that price point have not necessarily appreciated by 50%.
- Fourth, if you take a home that was originally valued at $500,000, apply a 50% fall in market value, that would drop the value of that home to $250,000. A 50% increase would make it worth $375,000, not $500,000.
All real estate is local to neighborhoods. Some areas of Sacramento fared better than others. Some areas of Sacramento were hit harder than others during the downturn, most notably the newer home subdivisions in Elk Grove, Natomas, Roseville and Lincoln. It’s amazing, our Sacramento real estate market, varies so much from one neighborhood to another!
I freely admit that I didn’t really fare so well in high school math. I think I took the class because I needed one more class to graduate. I took off so much time during my senior year by hitchhiking around the country, I probably earned a B- or a dreaded C. English was my strong suit, though, straight A’s. Yet, even I, a lowly Sacramento real estate agent, know how to run the numbers. My high school math teacher would be so proud. If you want to know more about the Sacramento real estate market, please call Elizabeth Weintraub at 916.233.6759. I’m never too busy to talk.
Why Some Sacramento Home Buyers are Not Buying a Home
Sacramento real estate runs in cycles but no year lately has been the same as the last, much less the approaches used by Sacramento home buyers. We had a big run for 8 long years of short sales and foreclosures, but that reign is pretty much over. Sacramento has been on the rebound for the past 2 years and rising prices has shown us that. The really big push in price increases was in 2012, which continued into the summer of 2013 — what some would call a market correction. That’s why the investors have left the market because they were there at the bottom and don’t want to ride the wave up, leaving us in a real estate market filled with confused home buyers.
Yet, don’t get the idea that the market is overpriced or over inflated because it’s still appreciating, it’s simply doing so at a quiet and very slow pace. In some neighborhoods, prices might be a little flat, but they’re not falling. Full-price offers and multiple offers are still happening on the entry-level homes, especially those that are highly desirable, ready to move into. My February is filling up the calendar with March closing inventory nicely. I predict we’ll see a huge push in closed sales for March across the board in Sacramento.
I also see some Sacramento home buyers making big mistakes. I highly doubt they’re not getting good advice from their buyer’s agents because most agents have a pretty good idea of what’s going on. I suspect that buyers are talking to Uncle Joe who’s moving kinda slow, the guy who mows their lawn, the clerk at Safeway, and getting bad advice because they’re looking for advice in the wrong places. The buyer’s agents I know are working extremely hard and feeling like they’re banging their heads back and forth in a door jamb — because it feels so good when they stop. But they’re not going into escrow with their buyers.
Some Sacramento home buyers think a seller would grab an offer without financing, known as all-cash, over an offer with financing. But sellers don’t really care if you hand them a brown paper sack filled with $100 bills or a check drawn on Bank of America, it will all end up in their bank account anyway. Sellers care about the sales price and terms. Buyers don’t get a break due to financing. They might move up the scale in a multiple-offer situation with better financing or cash, but price is still king. Price rules. Get with the program. It’s a new dawn.
I’ve also seen Sacramento buyers submit under-market price offers, sometimes known as lowball offers, when they know the seller has received multiple offers, as in 3 or 5 offers or more. I wonder why they do that to their agents? It sounds sadistic to me. They have no chance in negotiations yet they insist on submitting an offer. Maybe that’s not sadistic, perhaps that’s the definition of insane, doing the same thing over and over with no chance in hell of accomplishing anything.
