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Fixer Rosemont Home Pending in Four Days With 10 Offers
People see how fast an agent can put a home pending (into escrow) in Sacramento and they often make the mistake of thinking that selling Sacramento real estate must be a piece of cake, when little is further from the truth. I’ve been working on this listing for the past 6 1/2 weeks. There were a lot of moving parts, many circumstances and unforeseen situations, some out-of-state, some in the city, and it all had to come together. On top of this, I revised my comparative market analysis almost daily to arrive at the perfect listing price.
The listing price is not the selling price. The listing price is the value at which it would make sense to buy quickly and would attract buyers to tour the home. It has to be “just right” like Goldilocks. In our present Sacramento real estate market, it means to put a home pending quickly, the price can be overtly aggressive and it’s OK. Not out of whack.
To keep the peace among many people living in one house and to offer maximum exposure to potential buyers, we elected to set up showings on Friday night from 6 PM to 7 PM and during an open house on Sunday from 2 to 4 PM. The home went on the market Friday morning. I heard there were almost 100 buyers though the home Friday evening. Another 50 or so came by on Sunday. That’s how high our demand. We asked every potential buyer to please submit an offer by 6 PM on Sunday.
The results of showings and efforts to put this home pending
Some agents called to ask if they could show the home next week.
Although the listing expressly stated no FHA or VA, agents still called to ask if their buyer could get an FHA loan.
Another agent begged for a fast reply on Friday, threatening to buy something else on Saturday if his offer was not accepted. Hey, go buy that other nonexistent house. Be our guest.
An agent submitted a contingent offer at list price, as if either wasn’t bad enough.
Quite a few agents submitted at list price, even when informed we had multiple offers.
One guy texted me over and over to ask if he had to submit an offer by 6 PM, to explain to him precisely what I meant by that. Did I mean to say 6 PM? Or was it really 6 PM?
An agent who wanted to send a lowball but I told him not to then whined that we were not allowing him to meet his 40% profit margin. I suggested perhaps his inherent difficulty was his not being able to hire cheap labor and buy wholesale materials, but he was hellbent on complaining that his inability to meet my seller’s terms was somehow our fault.
One agent showed the property on Friday and got around to submitting her lowball offer after we put the home pending in MLS on Monday.
But interestingly enough, some agents were right on the money. They removed all contingencies upfront and provided proof of funds for cash offers. They offered to close quickly, giving the occupants a free rent-back to the end of May. I worked through dinner last night to put this together. And let me tell you, my efforts earned every penny.
If you want to sell a home in Sacramento, please call Elizabeth Weintraub and put 43 years of experience to work for you at 916.233.6759. I maximize profit potential.
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.
This Elk Grove Agent Sold a Home $40K Over Comparable Sales
Rumor has it that this seller’s market in Sacramento started this spring, but from my perspective, it began last fall with the September market. We have two very strong markets in Sacramento: Spring and Fall. If you can’t make the spring market, sometimes it is better to wait until fall. Although, in this seller’s market, anytime seems to be a good time to go on the market because all the guidelines and rules and everything you know about real estate have been tossed out the window.
For example, we have been taught since day one to examine the comparable sales when pricing a home. But the comparable sales mean jack squat today, which is why appraisers are having such a tough time trying to appraise. Sales from 3 months ago are not relevant to the market today. It’s the pending sales and the active sales that are predicting which way the wind is gonna blow in this marketplace. That, and a little bit of fairy dust mixed in.
When a seller called me last winter to list her home in Elk Grove, she was concerned that it might not sell right away because it was so close to Christmas. She didn’t live in the home, so it wasn’t upsetting HER Christmas, so it made perfect sense to put it on the market. I looked at the comparable sales and with my then-innocent eyes said: “Oh, look, they substantiate a price of $240,000. Tops. The market movement will let us stick $20K on top and we should do it to see what happens!” The seller liked that strategy. $20K over the pendings was a little risky. We put her home on the market for $259,000.
I did my usual marketing. Promoting that home everywhere that is conceivable online. Shot impeccable photos. Networked the listing like crazy. Within a week, we received an offer that the seller accepted for $275,000! But a few days later, the buyers developed cold feet and canceled. Buyers are a little wobbily right now, I’m finding. This isn’t the first buyer to cancel on one of my sellers due to cold feet or due to writing multiple offers, which is unethical if not against the law.
You will hear agents say that the first offer is always the best. That’s another widely accepted real estate axiom that doesn’t necessarily apply to our present market. The following day, the day before Christmas, we received a second offer of $290,000. It involved financing. The buyers, upon hearing their offer was about to be accepted, changed it in haste to all-cash at $280,000. See what I mean about buyers being a bit unsteady? But $280,000 and all-cash was still better than the first financed offer of $275K.
This Elk Grove home closed in January at $280,000, all cash.
The seller told me when we closed that she was very happy she chose me as her Elk Grove Agent. Even though I don’t live in Elk Grove, I sell a lot of homes in Elk Grove, and I know the Elk Grove neighborhoods very well. Because I am a top producer in Elk Grove, I routinely pop up on those lists from outside referral companies. They look for agents who sell the most homes in any given area, so they have something of value to offer to their sellers.
Well, you can get something of value by calling me directly: Elizabeth Weintraub, 916 233 6759. You can trust that I’ll always give you the straight scoop and put your interests first.
Bidding Wars to Buy a Home in Sacramento
A potential home buyer called yesterday to talk about buying a home in Lincoln. Lots of buyers gravitate toward Lincoln because it’s newer and often more affordable than Roseville, although it’s a bit further out from the core of Sacramento. He wanted to know what the market was like in Lincoln. The real estate market in Lincoln is the same as anywhere else in Sacramento right now, mostly a seller’s market. Limited inventory. Too many buyers. Crazy bidding wars.
This fellow said he did not want to get into a bidding war. Hey, I did not want my car to stop in the middle of the freeway the other day either but it did. All the lights on the dashboard came on and it just stopped running. Fortunately, I was in stop-and-go traffic, coming back to Sacramento from Roseville, one of the few times I was grateful for the slow down in traffic. And now that I think about it, my car is not even 2 years old, and I better take it in to have it checked out or I could die next go around if it happened again. This is how busy I’ve been — not enough time to think about why my car died on the freeway, of all places.
The point is we deal with what’s at hand, and right now, we have a seller’s market. This means that some first-time home buyers will not buy a home. Because there are not enough homes for sale to feed the demand. There is not enough for everybody, no. No sense griping or complaining, it’s just the way it is. If you want to buy a home, you might end up bidding for it against one or more buyers. It’s not the fault of your Sacramento real estate agent, so don’t blame her.
Is it a good time to buy? You betcha. Interest rates are so low it’s almost laughable. It’s as though you’re getting money for free. Prices are still low, even though they are edging upwards. Do you want to wait until interest rates reach a point where they double? Do you want to be priced out of the market or have to settle for a home you don’t want? A little competition doesn’t kill you. What can kill you is to sit back and watch all of this action without participation. Or, not taking your car to a mechanic, as in my case.
So, the worst happens and you pay $5,000 more or $10,000 more or whatever amount more than the seller asked. The list price is not all that important in today’s market. The market value carries a lot more weight than a silly listing price. And what difference will it make a year from now or two years from now?
How Not to Present a Purchase Offer in Sacramento
A real estate agent I first met 5 years ago when I interviewed her for my book, The Short Sale Savior, and later she referred a relative to me whose home I sold in Sacramento, serves on an Education Committee at a REALTOR association in the Bay area. She asked if I would do a webinar for her agents to help them to get purchase offers accepted. I generally don’t agree to do webinars or seminars because I don’t like them. Who am I to tell people what to do? Seminars are ex-husbands’ gigs, not mine. But I agreed because I can’t say no to this person. She is so danged sweet!
Sweetness gets you everywhere in this life. Vinegar, not so much.
I might start with talking about what NOT to do when writing an offer to buy a home. Because I list such a huge volume of homes in the Sacramento area, I see all kinds of offers. I can estimate that I probably receive more than 1,000 offers a year, maybe even twice that amount depending on whether it’s a seller’s market in Sacramento. It’s common today to receive a minimum of 20 to 30 offers for entry-level listings.
The unspoken truth is at least half of those purchase offers are garbage. I’m being generous with that percentage. That’s the part that agents don’t talk about because nobody wants to believe that a buyer’s agent can’t write an offer, yet that’s the first problem with many offers. There is no nice way to sugar coat this. I continually find myself defending the competency of my profession to sellers who can’t believe their eyes at some of the offers we get.
In a seller’s market, a seller and her listing agent can be very selective. Sure, there are markets in which the tables are turned, but our present market in Sacramento is a seller’s market. This means a seller can be looking for the very best offer and might be examining an offer with an eye for a reason to reject it. This is a very different approach than hoping to accept an offer, which is how sellers view offers in an opposite market. Unfortunately, buyers and buyer’s agents give sellers plenty of reasons to reject an offer. If a seller is considering 2 identical offers, one offer may get accepted simply because the other was rejected.
The trick is not to set up an offer for possible rejection. Here are some things an agent and her or his buyer should try NOT to do when presenting a purchase offer:
Clerical Offer Mistakes
- Misspelling of names
- Wrong property address
- No dates
- Missing signatures / initials
- Incorrect mathematical calculations
- Outdated forms
- Missing addendums or supporting documentations
- Sending unnecessary documents / paperwork
Writing FHA or VA offers on listings that do not offer those financing terms?
Sending the offer to the wrong agent or the wrong company or in the wrong format
Not reading the confidential agent remarks / attachments nor following specific directions
Exhibiting hostility toward the listing agent or seller
- Sending the agent a copy of the MLS print-out or list of comparable sales
- Demanding concessions and other unusual terms in the offer
- Belittling the home, the seller and the home’s location
- Yelling and screaming and use of profanity
No cover letter with the offer, hoping the terms and conditions speak for themselves. Often, they do not.
Sending a generic cover letter saying the buyer loves the home. All buyers love the home or they wouldn’t be writing an offer.
Forgetting that all offers look the same. Only the numbers and names change.
The bottom line is don’t give the seller any ammunition to reject an offer. In multiple-offer situations, a buyer should not allow her offer to be automatically eliminated from the competition. Ideally, a buyer wants her offer to be the best, at the least an offer worthy of top consideration. Give it a fighting chance.
