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Buying a Home in Sacramento in AS IS Condition
AS IS — two simple words that seem to cause so much confusion in Sacramento real estate. I can say AS IS over and over until the cows come home and it doesn’t seem to sink in. My sellers can ask me to draw a counter offer or an addendum to a purchase offer that clearly states there are: no repairs, no credits, no renegotiations, as the home is sold in its AS IS condition, and buyers can sign that document, yet soon as their pen leaves the page, their memory of this contractual agreement vanishes. Did they dip a feather quill into lemon juice? Have a lobotomy?
My heart goes out to buyer’s agents who have to deal with the AS IS Condition issue day-in and day-out. They can explain that a seller will not give them a credit nor make any repairs but the buyers will still push. I realize that sometimes it’s not the buyers who are the problem — it can be their relatives or their coworkers or their drinking buddies: Hey, when I bought my house, the seller painted the entire interior, bought me all new appliances and threw in a Mercedes. The implication being that the buyer is a wuss or a nitwit. The self-important braggers neglect to point out this was 20 years ago or in a different city but the point is it is not this transaction. All transactions are different.
When I receive an email from an agent with a single sentence attempting to defy the AS IS, I know what happened. The sentence might say, my buyer is requesting a $3,000 credit to closing costs. Or, my buyer would like to know if the seller will split the cost of a new roof, which might have been a talking point during negotiations. So, the agent feels a little silly having to ask that question because the agent had already discussed it with the listing agent and the buyer prior to the offer. I know the agent pointed out the roof and said it was the buyer’s responsibility. And I know the buyer understood. And we both know that I know.
Still, the buyer’s agent must ask the question if the buyer poses it.
If the buyer’s agent thinks the buyer has half a chance of obtaining any of these requests — which the buyer had made after the buyer promised not to make them — the buyer’s agent will try to build a case for the buyer. But when there is no case presented, just the request, I know the poor agent is feeling the pain.
Buyers often don’t stop to consider that they might be irritating the seller with these types of requests. Especially when they tripped over the sidewalk walking up to the front door. They should not come back later after promising not to ask for repairs and demand that the seller replace the sidewalk. It makes the buyer look like an idiot (or conniving), none of which sets well with the seller. Any special requests the buyer might need down the road, such as an extension to close or any gifts such as refrigerators or washers and dryers are unlikely to be granted when a buyer attempts to break a promise.
If a buyer doesn’t want to handle the consequences of purchasing a home in its AS IS condition, then maybe the buyer shouldn’t try to buy a home under those conditions in a hot Sacramento seller’s market. It’s all a part of home ownership anyway. Things break, malfunction and stuff need to be updated, repaired and maintained — all during the life of a home buyer. It’s scary for a buyer starting out, and that’s where the buyer’s agent can be an invaluable tool.
Has Your Sacramento Home Price Increased by 30%?
In a conversation with my financial advisor yesterday, she asked if every Sacramento real estate transaction has its share of problems or if it just seems that way. She recently sold her home and bought a new home, so she’s had a little first-hand experience. The answer to that question is yes. Your agent might spare you all of the unnecessary details, but almost every real estate transaction has some glitch pop up. Part of the problems are fueled by the parties themselves: the sellers and buyers. Part is just due to the new climate: the post-Bubble real estate climate, without tossing in limited inventory and rising rates. And newspaper headlines don’t really help.
It’s not that the newspapers are wrong, it’s that people don’t read newspapers. They scan the headlines, believe they have digested the entire story and move on to other things. We live in an Attention Deficit Disorder society.
The headline in the Sacramento Bee story a few days ago was Sacramento-area home prices jump almost 30% in a year, lead 30 biggest metro regions. I read that and my stomach sank. Stomach sag is something that can happen completely out of the blue to us old people who forget that planking is our friend, but the main reason for my distress is because I know that many sellers will believe they can get one-third more for their home than they can actually get, based on that article headline. Please, listen to your Sacramento real estate agent, that article doesn’t literally apply to a Sacramento home seller. The reporter is talking about median prices for last month as compared to median prices from a year ago.
Median prices means half the homes sold for more and half of the homes sold for less. It doesn’t mean YOUR home. Every neighborhood is different. For example, we have a ton of inventory in Land Park right now. At the moment, a quick check in MLS shows 27 homes for sale in 95818 under $400,000 — which encompasses homes for sale in Land Park, Curtis Park and a few blocks north of Broadway. According to Trendgraphix, in July of last year, we ended that month with 18 homes for sale under $400K in 95818. There’s a bit of a glut right now in that price range in Land Park.
But take a look at 95757 in Elk Grove. That neighborhood is in high demand, over by I-5 / Franklin /Whitelock. Part of the demand is the schools. It’s also on the edge of construction, and many of the homes are somewhat newer, slightly more expensive than other parts of Elk Grove. A check in MLS for 95757 shows 23 homes for sale in Elk Grove under $400,000, which is a hot price point. Last year in July, Trendgraphix showed 24 homes for sale. Pressure is on this ZIPcode.
In other words, a seller will get more offers and a higher price for her under $400,000 home in that particular area of Elk Grove than she is likely to get for a similarly priced home in Land Park. Real estate is local. I sell a lot of homes in Elk Grove as an Elk Grove agent, especially in 95757, and I see it first-hand. I also specialize in Land Park because that’s where I live, and many people know I am also a Land Park agent.
As usual, the devil is in the details, and if you wonder whether your home has enough equity to sell, call a Sacramento real estate agent to get a free opinion of value. You can call Elizabeth Weintraub at 916 233 6759.
Note: Interest rates are going up. Interest rates have increased by 1% already this year and, when rates rise, real estate prices tend to take a dip.
The Waiting Period for Multiple Offers in Sacramento
How many purchase offers does it take to sell a home in Sacramento these days? Maybe a better way to put it is how many days should a seller wait to accept an offer after receiving the first purchase offer?
An agent in San Jose called Thursday afternoon about a listing in Elk Grove that went on the market on Monday. I informed her the home was pending. Wha? She was shocked. She stuttered, “Bu bu bu but, it was ONLY three days — THREE days!!” What can I say? Indeed, some agents have been sleeping under a rock. Another agent called to say her clients had finally looked at the home Wednesday night and went home to sleep on it. When they woke up Thursday morning, they decided they would like to make an offer. Except now the home is pending. How is this my fault, I want to know?
If a person is seriously searching for a home to buy, that person receives listings directly from MLS through their Sacramento real estate agent, and they study those listings every single day. Buyers can opt to receive listings more often than once a day as well. Then, when they find a home, they need to be Johnny-on-the-Spot, run over, inspect and write.
The problem with most purchase offers is the offer itself is good for only 72 hours. So, if a seller receives an offer on Monday, to keep the offer alive, a seller needs to respond by Thursday, typically by 5 PM. Although, few homebuyers want to wait 3 whole days for an answer. It makes them antsy and agitated. I mean, what if it was you? Would you want to wait 3 days for an answer?
Usually the first day or two, offers come in from buyers who have not viewed the home. Many of these types of buyers are investors, with the bulk hailing from the Bay area. These people are hopeful that if they are the first offer, they will get the home, and that’s not really how it works. If the buyers haven’t seen the home, their offer does not hold as much validity as the offers that arrive on Day #3 and Day #4. After a while, all of the offers are about the same. There will most likely be a lot of cash offers.
Is it worth your time to write an offer on Day 4 when the seller has multiple offers? Depends. What do you have to offer that hasn’t already been offered? It should probably be cash or at least over 20% down conventional, in this market. Because the seller doesn’t really need 50 offers. The seller needs the offer that is the best and the offer that will work for the seller.
Not Every Person in Sacramento Has a Sense of Humor
The subject of monkeys came up this morning during a conversation with my husband. Well, actually he brought up the subject of monkeys, which made me ask if knows that Germany seized Justin Bieber’s monkey. I only mention Justin Bieber because a) I spotted a photo of his tiny capuchin monkey in the paper and b) who likes Justin Bieber? My husband says Justin Bieber is like Hamburger Helper. Just add pre-teens, stir and voila: instant concert sensation!
You can probably see why my husband and I get along so well. We make each other laugh. I try to bring a little humor to my client’s lives as well. Sacramento real estate is a subject many of us can chuckle about. I believe everybody has room in his or her daily routine to laugh now and then. Plus, laughter relieves stress, and it makes you feel better about the world and your place in it. Even the most horrible situation, like, say, a short sale, can be made a bit more plausible if you can find a humorous aspect to it.
Every once in a while, I run across a person who doesn’t seem to possess a sense of humor. This means I have to be careful what I say and realize if my jokes fall flat, that the jokes are probably not appreciated and, in fact, could be inappropriate for the situation. A Sacramento real estate agent has a duty to be professional. Take a former client whom I asked to appear in a photograph with me. When I asked if he minded if a reporter from the newspaper shot his photo as we listed his home, he was all for the publicity. He added: I’ll remember to shave.
I wrote back: And pants, don’t forget to wear pants.
Well, he didn’t see the humor in that. That’s probably because I didn’t catch the fact that he wasn’t trying to be funny when he said I’ll remember to shave. I thought he was joking with me. He wasn’t joking. He was being serious. He actually meant that he might have to leave himself a note because it’s possible he would forget. Maybe he had to tie a string around his finger before bedtime? Because, maybe he doesn’t look in the mirror in the morning, or maybe he doesn’t stroke his face to discover something weird is growing there. Perhaps he is fearful that an electric razor will suddenly jump from his chin and race across the top of his head? I have no idea how he struggles with this.
You just don’t know about people. That’s why it’s good to take stock upfront and make sure a person enjoys your sense of humor before you lay it on them.
Photo: by Van Newland at Pecan Street Fair, Austin 2013
The Best Place to Find Homes for Sale in Sacramento
A potential buyer from Florida called yesterday to discuss buying a second home in the Pocket area of Sacramento. I asked what made him pick the Pocket out of all the places to live in Sacramento. Turns out he used to live in Sacramento, and he likes that neighborhood. Not necessarily Greenhaven, mind you, but the Pocket; although Greenhaven and Pocket border each other, they are different.
This guy told me he was primarily interested in preforeclosures and short sales. I hear this preference stated often, and I realize what it means, even though the person who is sharing that preference may not. It means that a buyer wants to buy as much home for the dollar as the buyer possibly can. The buyer is not afraid of having to fix up a home or put a little sweat equity into it if the price is under market a little bit.
In short, the buyer wants a deal. A good deal. Reality says a buyer doesn’t really need to buy a preforeclosure or a short sale to get a good deal. In fact, most of the better deals lie in homes with equity. Short sales are no longer distressed sales; banks want market value for the short sales. Banks sometimes obtain 2 or 3 opinions of value before they will allow the home to sell as a short sale.
The pre-foreclosure properties are a myth. They don’t exist. Oh, I realize that buyers can find those homes listed on such websites as Trulia and Zillow, but those are marketing ploys. Those homes are not for sale. These websites buy feeds from all kinds of sources, even sources that report when homeowners have failed to make payments and are headed for foreclosure if they don’t bring the loan current. But it doesn’t mean those homes are for sale or will ever be for sale. It is very misleading and confusing for buyers. Although, it brings eyeballs to Trulia and Zillow, and traffic is what matters to Trulia and Zillow. The information doesn’t need to be accurate — just look those goofy Zestimates.
The best place to find homes for sale in Sacramento is on a Sacramento real estate agent’s website. That’s because those IDX feeds originate at MetroList, which is the Bible and our God in real estate. You can search for home listings in Sacramento, homes in Placer, El Dorado or Yolo counties, which include West Sacramento and Davis on my website or any other agent’s website. You will get everything that is for sale and not just my listings.
Although, I did get a call yesterday as well about where a person could find my listings. If you want to look at just the homes listed by Elizabeth Weintraub, you can watch the revolving listings on the right side of my home page. Or, to be more proactive, you can click on the LISTING tab at the top of my website. That will show you just the homes that are listed by this Sacramento real estate agent.
I promise, you won’t find homes that are not for sale, removed from the market or were never for sale in the first place. The status modifiers are clearly noted, well, except for those active short contingents, you have to read through the listing to find it. Yet, a real estate agent’s website is the best place to find homes for sale in Sacramento. You can also sign up for automatic listing emails, so every time a new listing in your desired area comes on the market, you will receive an email. If you’re not a do-it-yourself person, you can call me, and I’ll be happy to set you up. You can call Elizabeth Weintraub at 916.233.6759.
