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Why Agents Should Explain all Home Selling Documents to Sellers
Explaining all home selling documents to sellers helps to avoid confusion later.
Home selling documents are not as simple and straight forward as some of us like to believe. Especially when you’re been in the real estate business for as many decades as I have, I have probably forgotten about more documents than the existing home selling documents we use today. We Sacramento listing agents can become complacent and assume sellers know everything when sellers usually know very little.
Even if the seller has sold homes in the past, almost every transaction is different, unique in some way. The home selling documents can also vary from transaction to transaction.
My client reminded me of this yesterday. I was working away on my computer set up out on my lanai, often pausing to look out at the white sail boats on the horizon when my phone rang with the song Sigh No More from Much Ado About Nothing. That’s my clue that I have a text. I love that melody. It makes me receptive to text messages. See how I set up those things?
My client had just arrived in Boise, Idaho, brrr. She texted me photos of the snow and remarked about the cold weather. We talked about a few things and then she said she was working on fixing an electrical problem and correcting something else in the house. I wondered why. So I asked her. She said the buyer put defects on the home selling document so she was fixing them.
Hmmm . . . I reminded her that the buyers did submit a Request for Repair, but that was for pest work, and we rejected it anyway. Her home is sold AS IS without any repairs. Certainly no electrical. My client said she found the repairs noted on the CR. That did not make sense to me. I asked for an explanation.
Well, she sent me the buyer’s agent AVID (agent visual inspection disclosure). The agent noted a few things that he knew did not work properly. This is why my client thought she needed to fix those things.
No, she doesn’t need to fix anything. I explained the home selling document is simply a disclosure. Sure, there have been times when a seller has argued with me over my listing agent AVID, demanding I change disclosures I made, and it can’t be done. Each agent makes his or her own disclosures and they stand on their own merit. It’s not a request for work. It can even be wrong. It’s just an agent’s observation.
I cannot begin to tell you how relieved my client sounded in her text message. I’m glad that I probed and discovered which of the home selling documents she misinterpreted. We Sacramento Realtors can’t take any document for granted. Sellers don’t work with these daily like we do. We need to stop and explain more. Nobody is ever offended when an agent tries to help.
Foothill Farms Home Just Closed Escrow at 4652 Ravenstone Way
This Foothill Farms home just closed escrow over asking price.
As luck will have it, this Foothill Farms home that just closed escrow, well, I’ll likely field calls about this house for months. That’s because buyers find these listings all over the internet. They can’t tell if the house has closed or is pending or what’s going on. So, they call me. Since I happen to work in real estate, I generally refer the buyers to my team members. Our Elizabeth Weintraub team members, highly trained exclusive buyer’s agents, can provide professional guidance. But, sorry, you can no longer buy this Foothill Farms home.
The seller of this home called at the end of September. She found me by conducting an internet search and liked what she read. I met with her at the end of the month to talk about putting her home on the market. Apparently, she had already met with a bunch of other agents who disappointed her. One of whom told her to remove the refrigerator from the kitchen and stick in the garage. Why? No unearthly idea. I asked if that was the same agent who told her she could get about $20K more than the home comped at.
My focus as a listing specialist — and that’s all I do — is to maximize profit potential. But I can’t make money materialize out of a magician’s hat. In order to do that, there has to be some logical reason or loophole, and there was none in this case. Not only that, but the seller’s son had recently and quite unexpectedly died in the home. She had remodeled this Foothill Farms home for herself as her place to retire, but now all of that changed.
I consider myself a fairly compassionate and empathetic individual. The sorrow of the situation — not lost on me.
My promise to this seller? We would make sure there is no money left on the table, and we will do no repairs. THAT I can make happen. She cleaned up the home, finished painting, dragged the ‘frig back into the kitchen with the help of her neighbors and by Friday morning we went on the market. After our open house on Sunday, we received four offers.
Like usual, 3 were messed up and one was acceptable. The buyer’s agents made the usual mistakes, like low earnest money deposits or no closing date. One agent wrote a different property address, some tried to pick the title company, others checked the wrong boxes or demanded by accident that the seller replace all of the water devices. The wrong preapproval letter accompanied one offer. I check agent’s performance records in MLS. The 4th agent wrote the offer correctly but was relatively new. His email address sounded like he was a teacher and this was most likely a part-time job.
Hey, we are all new once. I could help the agent, and offered to do so. It’s better that they not try to bluff their way through anyway. Just tell the listing agent so she can offer assistance. The buyer expected to get an FHA loan, but that didn’t mean we couldn’t sell to her. No repairs does not rule out FHA.
That left basically the mortgage lender who could cause delays and problems. I always try to identify the source of a potential problem. Not every mortgage lender has the wherewithal to figure out what kinds of future fires could pop up and douse the flames early on. This was a case where that should have happened, but did not. The buyer had paid off debt without sourcing funds. Which meant at the 11th hour, she had to scramble to provide documentation, which delayed closing by 9 days.
However, the silver lining was the seller did NOT do any repairs nor provide any credits nor renegotiate. The pest inspection, obtained by the buyer, showed about $3,000 worth of work. Not the seller’s responsibility. This FHA buyer agreed to buy the home AS IS. We listed the home at $259,000 and it sold at $265,000. When we discovered we could not close on time, I had a good solution. We insisted the buyer immediately release her earnest money deposit to the seller. That fast action eliminated the seller’s anxiety level.
The last thing I want any of my clients to feel is anxious. I prefer smooth escrows, without hiccups, and I’ll move heaven and earth to achieve it. Just like this home that closed yesterday in Foothill Farms. I can do the same thing for you. Just call Elizabeth Weintraub at 916.233.6759. Put 43 years of experience to work for you.
How an Interspousal Deed Can Delay a Closing in Elk Grove Florin
Many married couples do not realize they can’t close escrow without an interspousal deed.
My sellers just closed yesterday on a home in the Elk Grove Florin area of Sacramento that was scheduled to close on July 5th. The buyer’s offer contained provisions for a hard-money loan with a 15-day closing period. One would figure this would be an easy transaction to close without any hiccups, regardless of the buyer feedback we received. I always ask buyer’s agents to share their buyers’ thoughts after showing a home, and I pass on that information to my sellers, just so they know what buyers are saying and thinking as they walk through the home.
That kind of feedback is often very interesting. For example, we had several agents tell us that home was overpriced and they did not like the condition, felt it needed too much work. Pretty much zero upgrades. It was built in the mid 1980s and looked like it. The owners at one time had installed laminate flooring but the flooring itself was curling up at the edges and pulling away from the quarter rounds.
The kitchen is open to the living room, a nice feature many buyers appreciate and it’s hard to find in these homes, but I imagine most buyers would want to tear out the cabinets and start over with a complete kitchen and bath remodel. Tiles in the entry showcased cracks. One of the tiles had been broken into pieces, and when I went over to meet the gardener to clean up the landscaping, I methodically replaced each piece of the puzzle that some buyer or agent had removed. It could use paint throughout and new carpeting in the bedrooms.
Originally the sellers had intended to do a lot of fix up work for the house. They had been thinking of a price around $225,000. After my inspection, and drawing on my 40-some years in the real estate business, I suggested a price of $235,000 and advised them not to fix up the house. This price was on the high end but given demand, I felt we could get close to it. Buyer after buyer trudged through during the first 9 days for sale and turned down the house. We received a bunch of offers, too, ranging from $225,000 to $230,000.
We countered the $230K offer but those buyers refused to budge. They felt they knew market value and were not willing to pay list price. Well, those guys were obviously not buyers for this home, and I suspect their agent was disappointed for the communication failure. Then, along came an offer of $238,000 from our hard-money buyer who purchased the home AS IS. I do not push my sellers to take offers and often advise them to wait for what they deserve to get.
Yet, we could not close escrow on time. We obtained 3 extensions and, at one point, made the buyer release her earnest money deposit. The hold up was the buyer did not realize that because she was married, in order to receive title insurance to close escrow, she would need to obtain an interspousal deed from her husband. He lived in China. We asked her husband to go to the American Embassy and get the deed notarized. Instead, they notarized the deed in a Chinese dialect, which was unacceptable. Needs to be in English.
If a buyer is married and obtaining title insurance to buy a home in Sacramento, either the spouse goes on title or the spouse signs an interspousal deed in front of a public notary, in English. I had faith we would receive the interspousal deed because I see this happen a lot. Buyer’s agents don’t always ask about a buyer’s marital status, and they should. The sellers were somewhat nervous. Yet, the deed eventually arrived and we closed on the sale of this home at one of the highest square foot prices in that neighborhood for a home without updates.
If you need to sell your home in Sacramento, better call Elizabeth Weintraub at 916.233.6759.
The Fixer Home in Citrus Heights That Sold AS IS
This is a story of a real estate closing that could happen to just about any seller in Citrus Heights, or anywhere in the Sacramento Valley for that matter, and how a first-time home buyer found her dream home. Sometimes, sellers find it difficult to believe that their Sacramento REALTOR is really looking out for them and trying to do what is best. In those instances, sellers tend to form their own thoughts about how they intend to sell a home, a strategy that can backfire.
A client contacted me in 2013 to inquire about selling another investment home, this time a home in Citrus Heights. I had previously sold a home for this couple in Roseville. They were very happy with me. I met with the tenants in Citrus Heights and prepared an agent visual inspection. My advice was to evict the tenants. The home was not presentable.
Sometimes, you can easily sell a home with tenants in it and sometimes you lose too much on the sale if you leave the tenants in the property. An experienced Sacramento REALTOR can spot the “trouble sales” a mile away and properly advise. In fact, I have one at the moment that I’ve been trying to sell for almost a year and the tenant is very uncooperative yet the seller won’t throw her out, so we had to wait. Because of the challenges, that particular seller is losing approximately $15,000 on the sale due to the tenant. Penny wise, pound foolish. Laugh, if you want, there are reasons behind these expressions.
My Citrus Heights seller, being a nice guy, decided to wait another year and then ask the tenants to move. At that point, he decided not to sell the property outright but to gift the property to a worthy charity and take the tax write-off, as long as the non-profit agreed to hire this Sacramento REALTOR to sell it. The head of the charity once sold real estate in another part of California. Usually I love working with real estate professionals, even if they are no longer in the business, but there is also a downside to it because people are the sum of their own reality. What works in Orange County doesn’t necessarily work in Sacramento, and our real estate market is very different. Plus, when years go by, things tend to change, so what was true 20 years ago is not true today.
We sold almost immediately to a first-time home buyer who was obtaining a conventional loan. As part of this buyer’s due diligence, she obtained a pest report, which reflected about $4,000 worth of work. Even though the home was sold AS IS, the buyer asked the seller to complete the pest work. The seller adamantly refused. The non-profit felt it could sell for cash in this market at top of market, a strategy that falls pretty flat in this market. Investors expect a profit margin and won’t pay top dollar. We reached a standstill, and the home went back on the market. Finally, the seller lowered the price but not enough to attract an investor who would pay cash.
We sold to a buyer who was obtaining an FHA loan and who agreed to pay for the pest work herself. Now, the problem with FHA is the 90-day flipping rule, which means title cannot transfer within that period. Our escrow was delayed by several months. The lender had its own issues and caused more delays as well. Ultimately, the home closed but the non-profit lost about $10,000 during this time period in order to save the initial $4,000 for the pest report — to sell AS IS.
The moral is sometimes it’s better to bend a little bit with a bird in hand. Sacramento REALTORS, the busy ones, spend a lot of time analyzing markets and movement. It’s professional advice a client can rely on.
The Mindset of Home Buyers in Sacramento Today
To understand why home buyers offer the prices that they do for certain Sacramento listings, it’s important to consider the mindset of today’s home buyers. Before the 2007 housing market crash, buyers used to approach homes with the attitude that they would absolutely adore all of them and want to buy every single home. In fact, in some cases, they had pretty much made up their minds by the time their agent pulled the car to the curb. That was their dream home. Or the last home was.
They would walk through the door expecting to love the home. They had already developed feelings for it from the moment they laid eyes on it, and were more likely to overlook a small defect. Buyers were much more positive and carefree. Why, they could fix that, their uncle could take care of that, their mom would help them do this. Not so today, I’m afraid. The mindset of home buyers has changed today.
Home buyers are cautious. They don’t want to get burned. They don’t want to make a mistake. When they enter a home, their first thought is not how utterly gorgeous we must own this, it is what is wrong with this home? There must be something wrong somewhere, and they walk through the tour looking for drawbacks that do not fit their objectives.
If they have their heart set on a kitchen with granite counters and stainless appliances, they are less likely to want to remodel a kitchen with ceramic counters and white appliances. Plus, you know, the flippers have ruined it for many of us as I hold flippers primarily responsible for the changing attitude of today’s buyers. But that and a dime won’t get me a cup of coffee.
When I spot a drawback that can cause a buyer’s emotions to move from the positive to negative, I convey that information to a seller. I also send my sellers showing feedback from other agents. Sometimes it’s a little thing that a seller can do to remove buyer objections such as painting a wall or replacing a light fixture. It is hard for a seller to believe that a buyer would, due to such small infractions a) not buy her home, or b) offer less than market value, but it’s precisely the small infractions that can get in their way.
That small fix might cost $200 but if it sells your home or returns an offer price of $5,000+ more, it might be worth considering. Because sometimes selling AS IS costs more than making a small improvement in the home. Perhaps try looking at it from the mindset of home buyers and ask yourself why wouldn’t you buy another home instead of this one?
