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In Defense of Multiple Offers from Sacramento Home Buyers
The biscuit recipe for Sacramento home buyers that is guaranteed to drive multiple offers in the Sacramento real estate market goes like this: add 2 cups of a highly desirable home in the right location, perfect condition and priced well, toss in a pinch of salt representing all of the other homes for sale in that particular neighborhood (none), stir in 2 teaspoons of pending sales, cut in a stick of low interest rates and blend well with a cup of eager Sacramento home buyers. Drop on to a Sunday open house and bake at 400 degrees for 15 minutes — within 2 hours they’ll be history.
Our Sacramento real estate market reflects low inventory, low interest rates and a high demand from buyers. Sacramento home buyers, who often say things like: I don’t want to be involved in a multiple offer situation. It makes me wonder what they mean. Do they want to buy a home that nobody else wants? Some ugly dog that is overpriced and under-loved? Is that it? Because there are some of those homes for sale in Sacramento, and nobody is trying to buy those homes. The field is wide open for that kind of home. No competition for that stuff.
Don’t they want to be the winning bidder for a home that everybody drooled over but only they were smart enough and lucky enough to win? One thing is for certain when a home buyer goes into contract in these situations: when the time comes to sell that home down the road — maybe not next year, maybe not in 10 years, but eventually when that buyer turns into a seller — that same intense interest from buyers will still exist. The home will hold its appeal. Your hair might start to turn gray by then and your body might run off southbound, but that home will still be alluring, even after the Sacramento real estate market cools.
That extra $5,000 or whatever a multiple-offer might cost, can be the difference between owning a home or not owning a home. Think how less important that will seem 5 years, 10 years from now. Sure, your emotional conscience might be fighting a losing battle by telling you not to pay more than list price, but what if the list price is low to start with? Listen to your logical, rational side. What do the comparable sales reflect? Because remember, the home will most likely still need to appraise. It matters less what the list price is and matters more the value of the home.
And let’s not forget about appreciation. Home prices are on an upward swing right now.
I also wonder if “I don’t want to be involved in multiple offers” means the buyers intend to lowball the sales price and realize they can’t possibly win with that strategy when other buyers are offering more than list price. Of course, if that’s the case, they are not buying a highly desirable home in the Sacramento real estate market this spring.
I’ve heard agents say they think sellers are greedy when multiple offers occur. As though somehow it is the seller’s fault for maintaining such a beautiful home in pristine condition. It’s not the sellers who are driving the marketplace; it’s the buyers. Buyers establish final value. My advice is don’t worry about what everybody else is doing. Focus on yourself. Write your best purchase offer and call it a day. Don’t wander about wondering “what if” . . .
Perfecting the Art of Selling Luxury Homes in Sacramento
Methods used to sell luxury homes in Sacramento have changed over the past few decades rather dramatically, but the “people aspect” of these transactions remains the same. Agents who aspire to sell luxury listings realize this soon enough. Although we treat all of our clients with compassion and respect, selling a luxury home requires a bit more finesse, shall we say, and the attention to detail is a bit more meticulous.
For starters, not all, but many home sellers of luxury homes prefer to not discuss showings with a buyer’s agent. Their listing agent might handle those types of phone calls and play the role of the intermediary, a buffer between the seller and other agents. Some sellers don’t want their home advertised in MLS, although I personally believe that is a huge mistake because it truly limits the number of potential buyers. Competition brings higher prices. But sometimes privacy concerns win over profit. Not to mention, not only do many gated communities of luxury homes prohibit For Sale signs, sellers don’t want a sign, either.
There is also the marketing, though. Which is handled on a somewhat higher scale. Agents tend to spend more money on marketing for luxury homes because it is possible the home might not immediately sell. It could be reaching a limited market. For example, I read the other day that there are something like 211,000 people in the United States with a net worth exceeding $30 million. That’s actually not very many people.
Although online exposure is vast and reaches cross the International Dateline. Even royalty in Dubai look at homes online. You can’t fool me, I’ve seen iPads in their hands. You think they are reading email, but they’re really drooling over the cliff-to-shoreline waterfall in some celebrity’s backyard in Malibu.
Words play such an important role, as they do in any listing, yet quality photography can supersede. Pictures say a 1,000 words is true. We’ve all seen the blackened photos in MLS and wondered what was going on. I’ll tell you what was going on. The sellers hired their nephew’s youngest son who hit the sheets at 4 AM and hasn’t quite recovered from his night-clubbing, instead of an experienced luxury homes Realtor in Sacramento. Click on this link if you would like to read more about selling luxury homes.
About Sacramento Realtors Making Decisions for Clients
Probably one of the hardest things a Sacramento Realtor does daily is to pull herself out of the transaction and let the parties make their own decisions. I often see other agents earnestly advising their clients and getting very upset when the clients choose the opposite action. They might believe the clients are making a life-altering mistake or they are offended that the client hasn’t taken their advice, and what they generally tend to forget is the all-important fact that, hey, they don’t own the house, for example, the seller does, or their buyer is about to.
The other thing is just because a client disagrees with her agent doesn’t mean the client is wrong. Clients make decisions based on the way they perceive the information at hand and from their own life experiences, which might be very different from the way a Realtor interprets the situation. We are not White Knight agents, and should try to not get so wrapped up in a transaction that we can’t be impartial, if need be. Sacramento Realtors need to be the individuals with clear vision and a focus. We are the people our clients rely on. We are often the bedrock, the guide.
As a top producer Realtor in Sacramento, there are times that I find myself believing my clients are making an error, which is why I bring this up. Because I quickly let go of those thoughts, especially when the client is adamant. My job is to explain the pros and cons of a situation to my clients and to allow my clients the dignity of making their own decisions. If I were remiss and did not fully deliver the facts as I see them, then I would be at fault, and I never want to be at fault. I can even say, I think you’re making a mistake, but that’s where I draw the line.
Clients need to make their own decisions, and Realtors should deliver the information that will help clients to format the best solution. Realtors cannot and should not try to make any decision on behalf of the client.
Although, when I receive an offer for one of my sellers, I will try to share my thoughts on the offer, but whether to accept, counter or reject is always up to the seller. Because you never know which way it will go, never. If you think you do, you’re only fooling yourself. That’s what I’ve learned over the past 40 years in real estate. We can’t accurately predict all outcomes. Sometimes, even the strangest things will happen. The consequences, though, whatever they may be, belong to the client.
Home Sellers and Buyers Both Pay Closing Costs in Sacramento
Should the seller pay a Sacramento buyer’s closing costs? Probably not in our present real estate market unless the price is increased to cover the seller’s loss, and that opens another can o’ worms because the home still needs to appraise at that higher price. If it doesn’t appraise at that new value, the transaction might not close unless one side or the other caves. There is often a risk associated with raising the sales price. If you spot a seller openly offering to pay closing costs, though, that’s telling you there is a lot of room in negotiations to squeeze.
Most home buyers don’t immediately think about the closing costs they have to pay to buy a home just like many home sellers often don’t think about the closing costs they need to pay to sell a home. Well, of course, sellers zero in on that commission since it’s a big chunk of change and can spend a lot of time focusing on that number rather than considering how much they will save on the back-end by hiring a more experienced Realtor who doesn’t offer discounts, but I digress.
Because there are many home sellers who never knew they had to pay seller closing costs, just like there are buyers who have no idea, either. Buyers realize a down payment is required but closing costs are an additional expense. Each has their own side of closing costs to pay. Third-party hands are stretched out and open. Some fees are routinely split, depending on local custom. I’ve had sellers ask: why am I paying for the buyer’s title insurance policy? Good question. Because it’s customary and buyers expect a seller to pay for it in Sacramento, plus the seller typically chooses the title and escrow company. I run into agents from Placer County, of course, who practice the flip. If a buyer’s agent is uncertain, an agent should inquire.
Once in my real estate life, many moons ago, I’ve had a buyer offer to pay all of the closing costs in a transaction, both sides, with the exception of the commission — but that was due to an incredibly lowball offer from the buyer. The buyer was encouraged to offer a concession somewhere to make the transaction work. If you were buying an $800,000 home for $600,000, I think you might offer to pay all the costs of sale as well. Otherwise, it sounds like you’re nickel and diming the seller to death, and you would be. Once you plunge in that knife, don’t twist it, you morbid SOB.
Sellers also ask why do I pay for a natural hazard disclosure? Because it’s required by law, and you must provide it to the buyer. In short sale situations, sometimes banks don’t want to approve all short sale closing cost fees because they don’t understand California law. I typically force that approval of payment from the bank, even though it’s only 99 bucks. It’s the principle. Typically, the closing costs for a seller range from about 1% of the sales price to 2%. Whereas a buyer’s closing costs run closer to the 3% range, depending on impounds.
Sellers can spot most of their fees in the purchase contract. They can also ask their Sacramento listing agent to prepare a net sheet, itemizing those fees. Buyers need to get their fees from their lender, if they are obtaining a loan, because most of the fees a buyer pays to close escrow involve the loan: the 800 fees on the HUD.
I do see a movement in how closing costs in Sacramento are divided, though, and it’s toward buyers and sellers splitting the escrow fee and splitting the city transfer tax. About 10 years ago, it was very common for sellers to pay those fees, but it doesn’t hold true today. You might ask your agent about splitting those fees in a purchase offer, especially if you’re submitting offers that are getting rejected. Not every real estate agent in Sacramento cares about nor looks for trends in real estate, much less about how closing costs in Sacramento are handled.
If Financing Options are Not FHA Nor VA
A few of my Sacramento home sellers have elected not to advertise their homes as available for sale with FHA nor VA terms. In other words, they want a cash or conventional offer. Apparently, this either sounds like a foreign concept to some or they just don’t care and will submit an FHA offer anyway, hoping the seller will change her mind.
After watching a few sellers lately reject FHA offers in hopes of a conventional or cash offer, I thought that it might be better to be completely upfront about the fact that some sellers don’t want FHA or VA. There is no point in listing a home for sale in Sacramento with FHA or VA terms if the seller plans to reject those offers in favor of conventional or cash. Because odds are in the seller’s favor, especially in this Sacramento seller’s market, that she will receive a conventional or cash offer. It seems the fairest and most effective way to honestly advertise a home is to eliminate those types of financing options from MLS when the seller doesn’t want to accept those types of offers. We don’t want to mislead a Sacramento REALTOR.
I realize some agents believe that agents routinely fail to note FHA or VA as financing options in MLS when they really meant to do so. This means that agents think other agents make mistakes. Sometimes, they do. But the odds still exist that when FHA and VA is not noted, then it is not available for that property.
I’ve had buyer’s agents call and try to talk me into accepting an FHA offer. They are relentless. They will write emails, too, and go into great detail all about the strengths of their buyer’s FHA offer, explaining what their buyer is willing to do in the event there are funding conditions, and they won’t take no for an answer when the answer is no.
I feel like saying: Read my lips. No, the answer is no. No FHA and no VA and no exceptions. I realize the market is tough for buyers, and that’s why I believe it is more important now than ever to accurately advertise a home and to not mislead buyers into thinking they have a chance to buy that home if they do not. I am not obligated to explain my seller’s reasoning when the answer is no. It’s just no. Accept it.
If you need a Sacramento real estate agent, call Elizabeth Weintraub, Broker, #00697006, with JaCi Wallace at RE/MAX #00773532 at 916.233.6759.
