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Selling a Home in Elk Grove Over Appraised Value
9916 Montedoro Ct, Elk Grove, CA 95757
In the middle of selling a home in Elk Grove, an agent called me to say her buyer had gone rogue by engaging in a lengthy conversation with the seller. We had 3 offers already for this home in Elk Grove, and this buyer knew it. He told the seller that he would use the extra concrete pad toward the side of the house to park his boat that he planned to buy. Oh, and he offered $31,000 over list price. This buyer is not buying a boat, I told the seller. He is giving that boat money to you.
There will be no boat in the immediate future for this particular buyer, I warned, he just doesn’t realize that little fact yet.
When the seller first called me to list his home, I had gathered all of the comparable sales and spent a good period of time covering those sales, discussing them with the seller. I adjusted up for the larger lot, for his culdesac location; otherwise, the home would have been worth under $400K. But I felt we could get $425K for the home. The best way to get that price was to underprice it ever so slightly. We agreed upon a sales price of $419,000. It seemed so much “softer.” I warned the seller that given the way appraisals have been going, it might not appraise at $425,000. We don’t have a lot of control over appraisals.
But I wanted to get the seller top dollar, and the seller wanted every dime as well. Selling a home in Elk Grove is an art. Each is unique. With this home, there were no spectacular upgrades. Oh, a few new pendants but no granite counters nor stainless appliances. In fact, the appliances were white, which buyers dislike, and the cabinets were cherry (also a no-no) and the counters were tiled (argh). Fortunately, the other features overshadowed the drawbacks in the kitchen, and I played them all to the hilt.
We countered the buyers extraordinary offer, which we both felt would never appraise, by asking the buyer to release his appraisal contingency. The buyer’s agent put her broker on the phone to me. He said they were releasing the appraisal contingency, but the buyer would not pay more than $15,000 over appraised value. I tried to explain to the broker that although he was using words, those words did not make any sense. He was saying they would release the appraisal contingency unless they didn’t and by the way, they are not. Wha?
I explained to the seller that if we accepted that kind of verbiage, the home could appraise for $400,000 and he would be forced to sell it for $415,000. We changed the verbiage. Now it read the buyer would pay $15,000 over an appraisal up to $450K. This meant if it appraised for less than $435,000, the seller would not be obligated to sell to the buyer.
Wouldn’t you know it? Three appraisals later, we finally got an appraised value of $435,500. The buyer paid $14,500 over that amount and this sale closed at $450,000. I know the seller’s neighbors will be staring at this sale and asking how we managed the process of selling a home in Elk Grove at that price. You hire a top Elk Grove Realtor, that’s how. This home closed escrow yesterday. Eureka! The seller was amazed at how quickly everything happened.
And btw, I should point out: Would a discount agent do that for a seller? Hardly. They’re not paid enough to care. You want a top Elk Grove Realtor? Then call Elizabeth Weintraub at 916.233.6759.
Happiness is Not So Much a Goal as Being at Peace
Being content and at peace with your life trumps sheer happiness.
Happiness is somewhat overrated. I prefer to strive for being content and at peace. I’m not saying this just because I watched REVIEW last night as the character Forrest MacNeil had to review what being relentlessly happy all of the time is like. In case you’re wondering, he gave “happiness” 3 stars out of 5 stars, and in my opinion, after what he went through, he was generous. I’m saying this because happiness is often equated to giddiness and joy, and it’s short lived. Being calm and at peace with your life is long term.
People say I am way too cheerful, especially in the morning, and I possess endless amounts of energy. I started out purposely being cheerful in the morning as a way to annoy my family and it just sorta stuck. Given a choice of moping about, dragging my feet, shoulders slumped, stumbling through the house grumbling, I tend instead to lean into the anticipation of the day. That’s something to be excited about, a fresh day of hell and new beginnings.
Besides, I have much to be grateful for today. For starters, I got rid of the horrible website company in Oklahoma last week that messed up my website so terribly and overcharged. I realized my sanity could not take one more day and immediately fired them. This was after the owner threatened to hold my website hostage. He refused to release it back to my host because he knew it would not function because his team, which I think consists solely of his son in Texas, coded it incorrectly. That was a fairly stressful time. Within a few days of firing them, my website guy, who is local, fixed almost everything, and it’s working great. Lesson learned here is do not hire a website company out of state.
I have two listings coming up next week that I am very excited to represent. One is a condo in West Sacramento and the other is a duplex in Carmichael. And I am working on selling a home in Elk Grove, which is held open today, along with another home in West Sacramento, that is also open today. My Sacramento real estate priorities are focused.
The icing on the cake for me is a Mediterranean cruise we just booked for after next summer on the Regent Seven Seas. The staterooms are suites, around 300 square feet with balconies. You can dine whenever you want, no designated seating. There is a spa on the ship. It’s not one of those super-sized Disneyland cruises, our ship is much smaller, and we hit all the fabulous European ports. Ever since I was a kid, I have yearned to experience a luxury Mediterranean cruise. We will also spend about 5 days on the front end in Barcelona, in my book the most glamorous and exciting city in Spain. It’s an incredible journey to look forward to.
My husband and I could have saved this excursion for when I retire from real estate, but that’s still so far off, it makes a lot more sense to simply enjoy life now and not stuff our desired adventures into a bucket list. People who say they will do this or do that when they retire might never get there. Life has a way of interrupting our plans. Life is short. Then it’s over. The late Harry Chapin said: it’s got to be the going not the getting there that’s good.
Elk Grove Sellers Who Buy With a Contingent Offer is Becoming the Norm
We just closed escrow yesterday for an evening news anchor and his family. They were able to sell an existing home, rent back for a while and close on another home, and we helped them every step of the way. Further, it was a contingent offer that scored the family the home of their dreams. Now, I know there are potential sellers who don’t believe it is possible to get an offer accepted to buy a home when their own home is not yet sold, but that is a common procedure for experienced Elk Grove agents. The trick is to make sure your home is on the market before you try to buy a home. Make it contingent.
I talk to scores of people all day long who call to ask about buying a home when they also have a home to sell. Each is different, and there is no cookie-cutter solution. I have many scenarios to choose from that will work, it just depends which is best for the client. But I do know, beyond a shadow of a doubt, if a seller needs to sell in order to buy, I’m your Sacramento REALTOR who will get the job done.
In this particular instance, I had sold this Elk Grove seller’s home 3 times. Three times! Flakey buyers. Buyers who get all the way to escrow closing, two days away and then suddenly realize, oh my gosh, we can’t get our money out of China! If I had a dime for every time I heard that excuse I still couldn’t afford an oceanfront home in Maui. Or, they are trying to sell a home but won’t price it in accordance with the comparable sales so we have to cancel them because we want to be in escrow with buyers who will actually close. We lost our first two buyers for reason #1 and reason #2.
But our third buyer stuck. Our third buyer was in a multiple-offer situation with another buyer, too. This was a home with no upgrades, no granite counters, no stainless appliances, no crown molding, nothing really special except the view. We worked out all of the details before the offer was formally presented to the sellers, the amount of the rent back, the duration, which made the entire process that much more pleasant for all parties concerned.
The home the sellers found to buy was also their third escrow. The first two homes, well, after presentation of all the facts, the sellers found some terms?that were unacceptable, and we helped them to cancel. It is not up to us to try to talk anybody out of canceling. If the home is not for them, it’s not for them, next. We want happy sellers and buyers.
Sure, sometimes it seems like we do 3 times the work to get the same results we used to obtain years ago without all of that work, but that’s how the business is these days. We do what we have to do to keep our clients smiling. It doesn’t have to be a pain in the neck to sell a home and buy another at the same time. Not if you’re dealing with pros. I say, bring on the contingent offers, boys, this is where we shine!
What is Wrong with the Elk Grove Housing Market?
It’s not just sellers of homes in Elk Grove who are asking what the hell is going on in the Elk Grove housing market. Sacramento real estate professionals are also baffled because they tell me so. But whenever I am perplexed, I search for answers, and I think I’ve figured out what part of the problem is with our Elk Grove home buyers this fall, and also part of what’s wrong with the Elk Grove housing market.
Let me also mention that this phenomenon seems to be isolated to Elk Grove / Laguna. I sell homes from Galt to Lincoln, and cover a wide sales territory over many counties in the Sacramento Valley, and the only place where this situation seems to exist is in Elk Grove and Laguna.
This spring, buyers were snatching up homes like crazy. I call these guys our Tier 1 buyers. They were motivated, had the bucks, were pre-approved and wanted to close escrow on a nice home in Elk Grove. Didn’t matter if the ZIP was 95624, 95758 or 95757, all three of those ZIPs experienced similar market movement across the board. Elk Grove or Laguna, homes were moving.
Now, we have what I call our Tier 2 buyers and our Tier 3 buyers, the ones who aren’t necessarily all that motivated, and might, maybe, perhaps, purchase a home if it fits all of their criteria and is priced right in the right location with the right amount of amenities and upgrades. If a home is missing one of those things, a Tier 2 or Tier 3 buyer is likely to pass it over in favor of another. They also don’t have a lot of financial security and many are unable to pay closing costs. They typically buy with leveraged financing above 80%. Not only that, but these buyers are obviously writing multiple offers, which is wrong on so many levels.
I don’t know if they’re doing it through one agent or multiple agents leaving the others clueless, but they write the offer they want on the house that they want the most, knowing that they might not get it because others probably want it, too. So, then they write an offer on their second-choice home. Because that home is second choice, they feel it doesn’t deserve the same consideration as their number one choice, so they sign lowball offers, ask for all sorts of concessions and then wait to see which way the wind blows.
On the other hand, our absorption rate in those 3 ZIPcodes in Elk Grove is 41%. A year ago in July it was 75%. You calculate an absorption rate by dividing the number of closed sales by the number of homes for sale. Our inventory is almost double over the past 15 months and by any stretch would be considered low at roughly 2.4 months. MLS reports we have 454 homes for sale in Elk Grove, with an average square foot price of $175 and 52 days on the market.
I guess I will now need to advise sellers to put into a counter offer that the buyer promises there are no outstanding offers floating about on other homes before we enter into an acceptance. Because when I ask agents if their buyers are serious, the answer I received this morning from a buyer’s agent was, I kid you not: “I don’t know, let me ask.”
Homes are closing in Elk Grove, and I’m living proof that it’s happening, but what a trip. One can’t be an emotional tree-hugging softie in this kind of real estate market, and sellers really need an assertive agent. A new client mentioned a few days ago when I was out at her home that the reason she wants to hire me to represent her is because I’m tough and firm but nice about it. I prefer to think that I am focused with thick skin. I work hard to get the job done.
Using a Multiple Counter Offer to Sell a Home
Be still my eyes — C.A.R. is offering a two-hour webinar for real estate agents to explain how to use the new Multiple Counter Offer form. Two hours! One-fourth of a normal work day. How stupid do they think real estate agents are? Oh, wait. Duh. Don’t answer that. But two hours? Criminy. Come to think of it, I just used that form a couple weeks ago and had to point out to the buyer’s agent that it was indeed a multiple-counter offer situation, as that was not readily apparent, for some reason.
The agent didn’t realize it until I said I do not know how the second buyer will respond. I explained that he needed to know that it was entirely possible that his offer might different than the counter sent to the second buyer, because that’s how multiple-counter offers can work. As a REALTOR who works in Sacramento, I try very hard to be fair to all real estate agents, and not just because it’s required by the Code of Ethics.
It looks to me, though, that what C.A.R. basically did was take the counter offer out of the multiple-counter offer document and made the counter offer a standalone, leaving the multiple as a multiple. Yet, it’s still fill-in-the-blanks.
It’s not only buyer’s agents who are confused. Sellers also do not understand the power of the multiple-counter offer. It is one of the most remarkable documents we have in our arsenal for offer negotiation. If a seller in Sacramento, say, receives two purchase offers, a seller can issue a multiple-counter offer. The multiple-counter offer can be different to each buyer, depending on how the seller wants to work the negotiations.
Think about this for a minute and let it sink in. Nobody says that one of the offers is an offer the seller wants to accept. That second offer could even be a lowball. It could be written on a roll of toilet paper. The seller could even suspect that the lowballer wouldn’t take a counter offer if she threw in 2 round-trip tickets to the moon. Yet, that doesn’t prevent the seller from issuing a multiple-counter offer now, does it?
Once the listing agent explains to the buyer’s agent that there is no regulation that states each counter offer must be identical and that the listing agent does not know whether the second buyer will increase the offer, what do you think that first buyer will do? See, this is why sellers and buyers in Sacramento and Elk Grove love working with me.
