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There is Not a Home for Every Buyer
Not only is there not a home for every buyer, but not every potential home buyer will buy a home in Sacramento this year, regardless of how much a buyer may yearn for a home. How do I know this? Because I speak with first-time home buyers who want to buy a home nearly every day. I listen to their wants and needs. From this information, I determine whether these buyers are realistic and motivated. See, a buyer can possess all the motivation and determination in the world, but if a buyer is stuck in fantasy land, the odds of buying a home are dramatically reduced.
I try to be non-judgmental. I know that buyers are not professional real estate agents and don’t possess intimate knowledge of the market. Part of my job is to educate buyers. Especially those who rely on Zillow or other websites that provide inaccurate information. Armed with knowledge, a buyer is then able to make an informed decision.
A few weeks ago, a buyer called to say she was unhappy with her agent because she wasn’t getting results. Since agents are generally in the real estate business to make a sale, it was entirely possible the problem wasn’t the agent. The buyer asked if I would research a particular home in Elk Grove. Her agent had shown her the property. She had not made an offer nor signed an exclusive buyer’s broker with this agent.
I called the listing agent. The agent had 5 offers, several of which were all-cash offers, and those all-cash offers exceeded the list price of $400,000. As with many listings that are very desirable, the home was definitely priced to drive multiple offers. Unfortunately, it makes little sense to compete in these types of situations if a buyer is unwilling to offer over the listed price. This is not a home for every buyer.
Then the buyer asked if she could buy this $400,000 home for $300,000. I explained all of the reasons why this type of approach was not going to work. Because this is not a home for every buyer.
A few hours later, the buyer emailed me to confess that she had gone back to see that home again with her agent. She was so overwhelmed with desire that she wrote an offer on the spot for $300,000. She asked if I would still work with her and show her other homes while she waits for an answer from the seller.
I know, beyond a shadow of a doubt, that the buyer is not buying this home. This is almost too crazy for words.
Further, I am not in the business to swipe other agent’s clients. There’s enough business in Sacramento for everybody. I had explained earlier how real estate agents work and why this buyer should decide which buyer’s agent she wants to hire. She told me she really liked her agent but did not feel her agent could perform.
I suggested she stick with her agent. She performed contrary to her own best interests.
Elizabeth is traveling today.
Should Part-Time Realtors Represent Family Members?
Should part-time Realtors represent family members? You know what I’m gonna say. Probably not. In fact, even full-time Realtors might want to think twice about representing family members if they want to keep harmony in the family.
However, the real dynamics of such a notion could be devastating to such agents because family often makes up the major portion of their business. Without family members to serve, they wouldn’t be an agent, because nobody else would hire them. And if that’s the case, maybe they shouldn’t be an agent at all.
But there are always those who will say something stupid like “blood is thicker than water.” Which means nothing, really. Is stupidity thicker than water? Who cares? What’s important is that well meaning intentions backed by inexperience is a recipe for disaster. It doesn’t help anybody. You’re better off hiring an experienced and compassionate agent to represent your family than trying to string together bits of delusions based on insecurities. The answer to should part-time realtors represent family members is almost always a nada.
I talked with a part-time Realtor a few days ago about her family members who expressed an interest in one of my listings. In fact, I let her know that one of the family members had called me earlier to ask questions about the home. This set her off. She was not happy about that disclosure, and when I tried to explain it was all right, buyers just get excited when they spot a new listing and don’t always think about calling their own agent, she pooh-poohed that notion.
They’re always going around me, she complained. Sometimes, they are a no-show. I make an appointment to show homes and they don’t show up or call. She ended with, “I’m not even taking a commission.”
What? All the more reason to refer these people to a full-time agent and collect a referral fee. Her comments made me think she now harbors a bit of animosity toward her family members. It’s not worth the ill feelings to try to help them in a professional situation. I don’t know if she’s giving them the commission or deducting it from the sales price or what this is about, but she probably should not be representing them. I mean, what do you want? A close knit family or kids who show no respect?
Should part-time Realtors represent family members if they know what they are doing? All depends on experience. Since agents learn to sell on the job, the more transactions they close, the more knowledge they should acquire. Wouldn’t family members be better served by a professional with loads of experience? Who doesn’t want the best for their family?
How a Sales Background Helps Real Estate Agents
A friend on another real estate board talked in her blog yesterday about out how a sales background helps real estate agents. Her research revealed that many real estate agents had no sales training before joining the real estate profession. She commented on how much her corporate sales background helped her in real estate. And boy, can I relate to that. I did not become a top Sacramento Realtor by chance.
From an early age, I won sales contests. Taught me to be competitive and to win. Even today, at my age, going on 67, I still like to win. When I no longer really need to win. It’s ingrained.
One of my first jobs was selling flower seed packets door-to-door in Circle Pines, Minnesota. In fact, I engaged in a lot of door-to-door sales, maybe because I wasn’t old enough to work in a stores. Also, there were not a lot of telemarketers on party-line phones in the 1950s.
Some of my sales background was acquired and some naturally inbred.
When I sold flower seeds, I would engage the person who answered the door in conversation. Oh, I’m not selling anything, lady. Like, where I lived in relationship to them, so they knew I was a neighbor who went to school with their kids. I wasn’t beyond begging them to buy my flower seeds. Or using my mother’s name in the community. The problem with that job was I wasn’t really motivated by money. I simply enjoyed selling every seed packet I had. Creating answers to handle rejection on the fly. Most neighbors could not say no to me.
Did not realize at the time how much a sales background helps real estate agents. I sold newspaper subscriptions for the Circulating Pines (a suburb of Minneapolis) and won a brand new Schwinn bicycle! My parents sure as hell were not buying such an expensive toy for me. I sold more newspapers that year than anybody.
While supporting myself through my senior year in high school, I sold magazines over the phone. People would say, “Oh, I don’t have time to read a magazine.” Oh, really? What about when you’re stitting at the breakfast table, eating a bowl of Cheerios? You’re probably reading the back of the Cheerios box when you could be reading Playboy, for the articles, of course. I take my cues from the conversation. Smile and dial was the name of the game. And not surprisingly, I made good money doing this.
When I moved to Denver, Colorado, at age 18, I sold Grolier’s Encyclopedias door-to-door. Something people would “value, use and appreciate, not only now but forever through the years.” See, I still remember the lines. I memorized a 90-minute presentation and was very good at ad-libbing my delivery. Changing it up in the middle of my performance. Complete strangers let me into their home, and for the next 90 minutes, they were all mine. Very similar to a listing presentation today.
Having a sales background helps real estate agents, no doubt about it. For a short time after moving to Ventura, I became a headhunter. The company sent me for training at IBM, to learn sales techniques. I learned how to sell benefits over features, like a duck to water.
The mere fact that I came up the ranks through working as a title searcher and later as a certified escrow officer boosted my analytical nature. Knowledge is power. But that sales background helped mold me into the top producer I am today. If a person says to me, I don’t think this is a good time to buy, for example, I will die trying to change that thought.
Most agents would shrug, say OK and get on with their lives. But I like to change minds. Just ask my husband what an argument with me is like.
Median Home Prices Drop in Sacramento
No way around it, the median home prices in Sacramento dropped during January 2019. We haven’t seen median home prices in Sacramento this low since February of last year, when it was $350K. Our last few months of the year in 2018 reflected a median home price of $365K, and along comes January and wham. The median home price slipped to $352K.
Our highest median home price was $375 from last June. Then it bounced around, leveling out in November and December at $365K. It’s been a rough month for Sacramento housing this January. Although, I did rank as the #1 agent at Lyon Real Estate for last month, so it wasn’t a bad month for me or my clients.
Look at those sold numbers for January. A dismal 840 homes closed last month in Sacramento County. That’s a 25.4% decrease over January of last year. Awful, just terrible. Another terrible sign is inventory is up almost 25% year-over-year as well. Which is great news for buyers but not so hot for sellers. The only redeeming statistic I can report is our pending sales have leapfrogged through the roof.
Yup, pending sales is where it’s at. Pending sales are the future. It predicts the direction we are heading, and our pending sales for January is up 35.9% over December. However, before you get all giddy about our pending sales, please know that we have no statistics on how many blow up and do not close escrow.
It is not unusual in these types of markets for buyers to develop cold feet or some other problem and agents might have to sell a home three times to get paid once. Buyers flake out, and that rate seems to be accelerating in my experience. One day they love the house and the next day they cancel for unknown reasons. Just means the market will likely be a bit rougher on all agents, and we may all end up performing more uncompensated work.
Oh, shelter my poor eyes from this chart, which shows the cumulative days on market in Sacramento real estate. Ordinarily, when the days on market go up, it can cause buyers to want to pay less than list price. This might very well be a catalyst as to why we are seeing our median home prices drop in Sacramento. OK, squinting at it, I can make out our days on market for last month is 49. That’s high!
Of course, the super hot desirable properties that anybody would give their eye teeth to own are still flying into escrow fairly quickly. But the main thrust of the market is price reductions, longer days on market and some pretty good deals for home buyers.
For more information, please call your top producer Sacramento Realtor, Elizabeth Weintraub, at 916.233.6759.
Many Home Showings and No Offers, What is Wrong?
Not too long ago we closed on a property that had many home showings and no offers, and there was nothing wrong with the property itself. It had been priced too high. Once we brought the price in line with what the market would bear, the home sold. Without question. Nobody asked why has this been on the market for so long? They could see why.
It was also a difficult sale for the sellers. They had no mortgage, so apart from paying for utilities and property taxes, it didn’t cost much to keep the home on the market. As the listing agent, I wasn’t complaining, either. The home’s location was excellent and it made the phone ring with buyers for others homes. I will be as patient as my sellers.
However, usually when there are many home showings and no offers, it generally means there is something wrong with the property. The way to cure that problem is to figure out what is wrong and fix it. If you can’t fix it, then lower the price.
What could be wrong, you might ask? It could be condition. Some homes without updates or the wrong kinds of updates will get passed over by today’s discriminating millennials. Buyers dislike oak cabinets, white ceramic counters or white appliances. In those instances, you have two remedies. Paint the cabinets, install quartz and replace the appliances. Or, substantially reduce the price. What first-time home buyers want today is very different from buying trends in the 20th Century.
It could be location. Some homes built in front of major freeways (what were they thinking??) are challenging locations to sell. Moreover, if you can see a school when standing in the front yard, that’s a bad location. In those situations, sellers have only one remedy. Make that house the cheapest home within a 1/2 mile radius. Same principle applies to a bad layout. It is generally too expensive to change the layout, which means the price needs to account for the configuration deficit.
Many home showings and no offers? Perhaps the home looks differently online than the photographs reflect. Once inside, buyers could decide it doesn’t meet their list of requirements. If the home could use a little TLC, it is OK to market it that way. Let buyers know what they are getting into, and they will be better prepared to view the home. When hopes are dashed the minute they step inside the home, that is not a good buying experience.
Sometimes it can be the season, typically the months of December through February can be slow. You also can’t count open house traffic because those people are not necessarily buyers. Those are people who like to attend open houses, or people walking and driving by.
Of course, the bottom line solution in just about any situation in which you have many home showings and no offers is a price reduction. But before automatically slashing the price, be sure to consider other factors first.
