The Price a Sacramento Buyer Will Pay Can Exceed Market Value

Examining comparable sales is not the only way to establish market value.

Real estate 101 teaches us that market value is the price at which a seller is willing to sell and a buyer is willing to buy. However that doesn’t always apply to the amount a home will appraise for, and when you’ve got a lender involved at 80% of the value or greater, that lender will rely on an appraisal. And appraisals are an opinion of value, not fact. This is what can get Sacramento sellers in an uproar.

They know what their home is worth. I, as their Sacramento Realtor, also can generally accurately predict how much a buyer will pay, based on how I will market the property. Another agent might not get the same result; in fact, I know other agents don’t. Because they won’t take the listing. They think they know more than anybody else in the universe about Sacramento real estate. When they don’t.

I read a lot of blogs by agents who claim to walk out the door when sellers are “unreasonable” about their hopeful list prices. They act like it is beneath them or unprofessional not to take a listing at the market value they deem. Seems a bit arrogant to me. There are other ways to deal with this than to say adios, and don’t let the door hit you in the butt on the way out.

In hot seller’s markets, it is not unusual to sell a home for higher than its appraised value. I often get that result from my real estate marketing efforts. In those instances, the buyer can sometimes soften the sting of a lower appraisal by contributing cash to the transaction, and some buyers absolutely will accommodate that seller request. They realize market value is just one person’s opinion.

But the one thing that everybody forgets when they are riding on that high horse of they-know-the-market-better-than-anybody is what about cash? Huh? What about those cash buyers? There is no appraisal with a cash buyer. Many buyers from the Bay area pay cash. I market to buyers from the Bay area by networking with those agents, mostly foreign agents and their foreign buyers.

I had such a situation close escrow recently. I won the listing battle and had to call the rejected agent to ask him to remove his lockbox because he ignored the seller’s request to take it off. The agent appeared a bit snippy and sassy, saying he thought the price was too high above market value, and he didn’t want to take such a bad listing. Well, that listing sold after our open house at our list price for cash in 2 days and closed in 6 days. Sucks to be that agent right now.

There are many meanings to market value in Sacramento real estate, fine nuances. I’d also like to see the day the banks require two appraisals to justify market value. Why do they rely on the opinion of one appraiser anyway? If you’re looking for a Sacramento Realtor who uses her 40 years of experience to attract offers at maximum value, call Elizabeth Weintraub at 916.233.6759.