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Maybe You Should Hang On to That Sacramento Duplex in the Pocket
The beauty of selling hundreds and hundreds of homes in Sacramento is I have direct experience in so many different neighborhoods that I can often picture the home in my mind just by hearing the address. That’s what happened yesterday when a prospective seller called to talk about the real estate market in Sacramento and selling his Sacramento duplex in the Pocket neighborhood. I pay attention to what people say to me, and I heard this guy say he was not in a hurry to sell and he wanted to maximize his profit. He asked for my opinion and I told him it was probably best not to sell right now.
I can hear my company’s managers having a conniption fit at the moment. Other readers are probably spitting coffee at their monitor wondering WTH? Did she go off the deep end? Why would a Sacramento Realtor tell a prospective seller that now is the not the best time to sell when it’s a freakin’ seller’s market with no inventory, low interest rates and high demand?
Because of the seller’s goals and motivation, that’s why. It’s not about me.
There are basically 3 types of people who will buy a small Sacramento duplex in the Pocket: local investors, first-time home buyers or Bay area investors. Of the 3 types, the buyer most likely to pay the most money for a small duplex in our present market is the first-time home buyer. We are witnessing screaming crazy demand for multiple-family homes, whether it’s two houses on a lot or a duplex, for buyers with expanded families.
Local investors watched the market fall and hit rock bottom in 2011. At that time, they were willing to pay more than list price to grab a home. Today, not so much. Today, with rising property values, they want a discount. They want a hedge against falling values as well. Bay area investors will often pay a little bit more, simply because they don’t know the neighborhoods where they buy or they hire an agent from out of area as well. They also tend to compare values to the Bay area, which are absolutely insane, so by comparison Sacramento looks like more reasonable, but they, too, are often too stubborn and reluctant to pay list price. Many investors today try to demand a deal in exchange for a cash offer, so much that when we hear an investor is a “cash buyer” those words cause agents to moan.
This seller’s best bet is to clear out at least one side of the duplex. Get it empty, fix it up, and make a few small upgrades. Make it easy to show. Change the other side to month-to-month from a lease. He won’t get top dollar from an investor even with A-rated tenants. He’ll get the most money from an owner occupant.
I could picture this Sacramento duplex before he gave me the address, and I asked if it was a corner unit that wrapped around facing two different streets, a one-story and, sure enough, it was. I knew the value without even looking it up in MLS to run the comps. Sure, he might lose $2,000 in rent, but he’ll probably gain $20,000 in sales price, and that’s enough to warrant moving the tenants out to show the unit as vacant. It will increase showings, too. And he can’t do that until next spring. So, there you go, now is probably not the optimum time for him to sell.
But it’s not a bad time.
Selling Rental Homes in Sacramento That Are Occupied by Tenants
Selling Rental Homes in Sacramento is easier with cooperation.
Some real estate agents in Sacramento will not list a rental property if the home is not easy to show, even if the price is right. The reasoning is the home might not sell for a while if buyers can’t get inside because tenants won’t cooperate. Oh, tenants will say, sure, they’ll cooperate, but then they bolt the inside of the door, don’t answer their phone for appointments and make life all-around-hell for the Sacramento Realtor. This is why I caution sellers to either evict the tenants or give them an incentive.
I have two new listings this week, a home in Elk Grove and another in West Sacramento, in which we were able to quickly move out the tenants, clean up the home, and put these homes on the market — while it’s still sizzling hot for sellers. Of course, I help sellers prepare the home for sale, either through referrals to contractors or staging advice. We want the home to show in its best light.
One rental home in Sacramento closed recently with a tenant in place. This tenant claimed to work from 6 AM in the morning to 11 PM at night — and maybe she held several jobs, I don’t know. She would not allow a lockbox. I had no interior photographs. Buyer’s agents struggled mightily to make appointments because the tenant would not call them back. I would text her and encourage agents to text, but the tenant was slow to respond, if she responded at all. This particular home probably could have sold for 10% more than it did, and the seller knew it, but the seller, for personal reasons, wanted to leave the tenant in place.
The seller also would not evict the tenant during escrow, which meant either a buyer would be saddled with a tenant and could not take immediate possession or the buyer needed to be an investor. There are not many investors in the market anymore like a few years ago. This is a situation that many agents would walk away from.
I am not an agent who needs to close every single escrow in 30 days. I have incredible patience, and I can wait, especially if that’s the seller’s intention. These sellers wanted a certain type of buyer who would pay a certain price. It took us 211 days to find that buyer but we closed escrow. Compare that to other homes in that area that typically sell within 30 to 45 days over the past two years. There was nothing wrong with this home. It was the obstinate tenant and the lack of seller motivation, but that’s OK with me. As long as it will eventually sell, I will list that home and sell it.
My time frame is my seller’s time frame.
