Buying Sacramento Home
One of the hardest decisions for a home buyer is how much to offer to buy a home in Sacramento. Buyers see the list price but it doesn’t mean much to them. Not being in the real estate business, many buyers look to their agents for advice while others soak up bad information on cable TV. All real estate is local. That means only one thing: The only advice that matters is that which pertains to the Sacramento real estate market. Not Los Angeles or Miami or Chicago.
A seller’s market persists in Sacramento. See my Sacramento Housing Market Report for February 2018. We’ve been in the midst of a seller’s market for a long time now. We have very few homes for sale. High demand. Remember your high school classes about the laws of supply and demand? When supply is low, demand goes up. When supply is high, demand goes down. Supply = house for sale. Demand = qualified, ready, willing and able home buyers.
Are you concerned about handling a situation in which interest rates increase when building a home? If not, you should be. Depending on where you are building a home in Sacramento, it could take 4 to 6 months (or longer) to finish building your home. What happens if interest rates increase when building a home? You could get socked with a much higher interest rate. The rate could be so high that it could disqualify you from buying a home. Or, put a severe crunch on your financial cash flow.
Last September, interest rates remained around 3.75%. Today, interest rates hover at about 4.30%+. Fact, every 1% an interest rate rises loses a buyer about $25,000 of purchasing power. Some buyers do not understand the direct correlation between sales price purchasing power vs interest rates. However, you should keep interest rate fluctuation in mind when buying new construction. Also, think about how you’ve locked in the price of the home when you signed the purchase contract. Sales prices may go up but your pre-negotiated home price remains stable.
Every agent on the Elizabeth Weintraub Team works with ultra high-end buyers but we also end up working with Sacramento buyers nobody else will help. It’s part of our mission to focus on client-centered goals and not ourselves. Everybody on the team is onboard with that statement. Being human, we might moan a little bit when we get that tiny paycheck but we rejoice at the joy it brings our clients. And it all evens out in the end.
I’ve noticed, however, that some agents act like prima donnas. I recall once telling a buyer’s agent she would have to crawl through the bathroom window to show a certain listing I had, so wear pants. Every agent I gave those same showing instructions to refused. But this particular agent said OK, and she put the transaction into escrow and closed. I took her to lunch.
It wasn’t that long ago, maybe 10 years back, an agent in my office asked why I would work with internet buyers in Sacramento real estate. This was an astounding concept in 2008. That a Sacramento Realtor could be found online by an internet buyer. Most of that search was organic because other agents were not online. They didn’t have websites nor blogs. Today, everybody has a Facebook, Instagram and Twitter account.
Fast forward 10 years later, and I still maintain a higher internet presence. The difference is many buyers today come from the long tail I’ve created online or from websites where buyers go. I stand out in the sea of ordinariness. That’s why internet buyers gravitate toward me. They see value. According to NAR, 66% of first-time home buyers are Millennials. Followed by Generation X at 26%. Buyers value experience.
Today I’m writing about why a nonprofit employee might not get a mortgage. Nobody, especially sellers, wants to hear at the 11th hour their buyers cannot close escrow but every so often it happens. We suck it up and move on to find the next buyer. Still, it stings and is frustrating for sellers. It’s particularly irksome when you hear the mortgage loan officer did not read all of the loan documents.
Headache avoider tip for Sacramento real estate:
Professionals should always open documents and read them before forwarding the attachments.