Email Elizabethsellers market
Sacramento Home Buyers Need a Reality Check
How does a seller today know if she has a real buyer who has made an offer? There are a lot of Sacramento home buyers wandering around who apparently look like a buyer, walk like a buyer, squawk like a buyer but they are not buyers. I wish there was some kind of test we could give them. As a buyer’s agent there probably is, but there is not from the listing agent’s point of view. That’s because the listing agent has no conversations with the buyer and no direct contact. We can obtain a preapproval letter, many of which are useless, and an earnest money deposit, but it still doesn’t mean the buyer is a buyer.
Now, you would think a real estate agent would engage in a lengthy conversation with a potential buyer, but the truth is most do not. A buyer calls an agent, asks to see a property and then writes an offer. In some ways, the agent is an order taker. Doesn’t question. Doesn’t probe. Just writes the offer and keeps her lips zipped.
You know, that’s not the way I was trained in real estate many years ago. I was always taught that we as real estate agents should form a relationship with our clients, counsel and advise them, ask questions, try to do what is best for the client, not just say “press hard, third copy is yours.”
Keeping buyers in escrow is a difficult job, even in a seller’s market. You might think that a buyer would not cancel escrow simply because there are so few other properties available. To cancel is to take a chance on buying nothing for a long, long time. Because there is not much available for sale in Sacramento. Pickings are slim and few between.
There are a lot of Sacramento home buyers but there doesn’t seem to be very many who are actually performing. The fallout rate seems to be much higher than it needs to be. We’ve got a lot of buyers begging for a home but shortly after they go into escrow, they cancel. For no other reason than cold feet. I eye them more suspiciously now. I question the quality of prospective buyers at the moment.
It would be nice if we could put potential Sacramento home buyers into an X-ray machine like the ones at the airport. Step in, put your feet on the footprints, raise your hands over your head and hold still. BZZZT. Nope, you’re not a buyer. You’re not going through Security to escrow. You can stuff your passport back in your pocket, grab your luggage and go home.
The Lengths Some Sacramento Investors Will Go
When I started in real estate in the 1970s, I represented mostly investors looking to buy a rental home. I also cultivated investors by showing regular homeowners how they could tap the equity in their homes to buy investment properties. It was a completely different world of real estate back then. You may find this difficult to believe, but I never asked my investors for their opinion or how they would like to write a purchase offer. I bought all of their properties in my name as assignee using promissory notes. The world of Sacramento investors has changed a bit.
The premise back then was as a real estate broker I could better negotiate and ferret out the good deals for them. After I bought the property, I assigned it to my investors, they put cash into escrow and we closed a week later. I received a commission and they got the property. It was a strange way to do business but it worked for many years.
One of the advantages to this system was I could act very quickly when a new home came on the market. Back then, we didn’t have computers. MLS books were printed once a month with weekly updates. Real estate agents found homes for sale through networking and the daily newspaper. It’s hard for me to even imagine doing business like that now. It seems so dark ages, like etchings on a cave wall, to think about having to stop at my office or a telephone booth if I needed to make a phone call.
Today in Sacramento the market is desperate. Sacramento investors are nearly hysterical. And first-time homebuyers are in tears. The problem is no inventory, and it’s getting worse as we head into the time of year that is generally the slowest — December. Five years ago there were almost 10,000 homes for sale in Sacramento County. I just ran a search in MLS, and we have 1,373 residential homes for sale in Sacramento County. We have 5,162 homes in escrow with accepted purchase offers. But most frightening is over the past 30 days during the month of November we have closed 1,370 homes. That’s only the number of homes that have been reported and many companies lag MLS input by a few days, so that number will increase by the time all is said and done.
We have less than 30 days of inventory. There is nothing to buy and the demand is extremely high. To say it’s a seller’s market is like saying we have a little rain here in Sacramento right now. We have a torrential storm.
Investors have figured out what they need to do is target the top producers. They are calling the biggest listing real estate agents in Sacramento and begging for first chance at writing an offer. I rank up near the top so they are calling this Sacramento real estate agent. One of them, and I won’t tell you who it is, called yesterday. They offered to kick back 66% of the commission to me if I would give them an edge in negotiations and make suggestions as to how they could beat out their competition.
I don’t think they were prepared for my response. That’s because this approach must work with other real estate agents or they wouldn’t be doing it. I said: “You know, it sort of sounds like you guys are asking me to compromise my fiduciary and give you a leg up in exchange for additional compensation. To grant favors. To ensure you win the purchase offer. I know you probably don’t mean it that way, but that’s exactly how it sounds.”
Their response:“I take it you’re not interested.”
Bingo.
If you’re looking for a Sacramento real estate agent to sell your home, give Elizabeth Weintraub a jingle at 916.233.6759. I answer my phone.
School Teachers Can Do a Short Sale
One thing that this Sacramento short sale agent is blessed with is super nice clients. All of my clients are really nice. But some of them are exceptionally nice, over-the-top nice, the kind that if you turned to talk to them while waiting in line at the grocery store you might feel embarrassed because you’d end up hugging a total stranger out of the blue — THAT kind of nice. And I am not a huggy-feely type of person. I am more of a firm handshake type of person.
This particular seller and her husband are high school teachers. They are super sweet, sensitive and caring. They started their life together as a young family in this home in Rancho Cordova. As the years passed, they, like many new families in Sacramento, outgrew the tiny 2-bedroom, 1-bath home.
They bought a larger home in a nearby community and rented out their former residence. Unfortunately, the rent did not cover the mortgage payment and unexpected rental expenses. But they could still get by because they both worked over the summer months at a summer school. When the economy crashed, they lost their summer employment. Expenses mounted. Like so many homeowners in Sacramento, they did not count on the value of the property falling as well. They had hoped if they ran into difficulty that they could sell the home. But selling this home was not an option because they were underwater.
We began this Rancho Cordova short sale in May. The market was very hot in Sacramento in May. Not as sizzling hot as it is now, but it was a strong beginning of our seller’s market. We received a ton of offers and had to sort through them all. One offer stood out from the rest. The offer was from a real estate agent who was trying to buy a home for her son and his fiancé who were beginning their own family. The lender in this situation was Sun Trust (notoriously slow), and there was a second lender that was demanding more than the first loan would allow. The buyer agreed to hang in for the duration and not cancel. Bingo, that’s our buyer.
It took us 7 months to negotiate and close this Rancho Cordova short sale. We were rejected once because the lender could not understand that teachers live on 10 months’ of income in a 12-month calendar year. An important thing I have learned over the years as a Sacramento short sale agent is not to give up. Not to throw in the towel. Especially NOT when sellers are counting on you and the buyers are counting on you. If there is a shred of hope, you find a way to get the message through, and you close.
What Will a Sacramento Home Seller Take?
Would a seller take this to sell a house? Would a seller take that to buy a mouse? Would you, could you, in a car, take them, take them, here they are? This is what it’s like putting a home on the market in Sacramento today. Offers falling out of the woodwork and from all directions. I tell sellers that I’m almost afraid for them because I know what will happen, and they do not. Sam, I am. I am prepared. But sellers are freaking out. I know it before it happens.
There is a long parade of offers coming my way today. Thinking ahead, I had mentioned to a seller last week that we should go on the market on Monday so we can all enjoy a relatively quiet Labor Day Weekend. Meaning her home will probably be sold by this Wednesday, at the latest. What is a little bit wild are the calls and emails that I’ve been receiving from buyer’s agents. They all want to know what the seller will do and what the seller will accept.
The answer to those kinds of questions is I do not know. I am not the seller. I am just the listing agent. I’m not inside the seller’s head. I don’t make decisions for the seller. It’s the seller’s house, and she can sell to whomever she wants in this market. It’s a seller’s market. If your buyer is not a cash buyer, you’re probably at a disadvantage, but not necessarily. There are some sellers who care more about the type of person who is making the offer than the type of offer. But let’s not fool anybody, cash offers, as long as the buyer is not a jerk, are more likely to win.
Especially in a short sale situation. In the past, like a few months ago, a cash buyer might be a drawback and not as desirable to a short sale seller. That’s because cash buyers are often distracted by a new listing, something else shiny to buy, and they can bail with great ease. But today, they are very unlikely to walk away because there is nothing else for them to buy. So, that makes a cash buyer just as attractive commitment-wise as, say, my personal favorite, which are VA buyers. VA buyers will stick with the deal because they have no other place to go. But now, neither do the cash buyers.
This is a really good time to be a seller in Sacramento. If you’re searching for an experienced and straight-forward Sacramento real estate agent to help you get top dollar for your home, call Elizabeth Weintraub at 916 233 6759. I’ll help you to navigate these crazy multiple offer waters and get the edge in the market. It’s what I do, Sam, I am.
