There are always second chances to sell a property, but one question a seller asked yesterday was interesting. He asked, can a counter offer on a Sacramento home come back to life? Last week, we received an offer on his Sacramento listing in Midtown. The offer needed a counter offer as there were some things that needed to be much improved. The good faith deposit, for instance, it was very low. I had not seen such a low offer of a deposit amount in many years. We write offers with three percent down as that is the liquidated damages amount. A generous good faith deposit tells the seller a buyer is serious.
Christmas-time is a perfect example of how a buyer can miss the train in Sacramento real estate. The buyer’s agent was trying to write an offer while juggling a bunch of small children, picking up family members at the airport and unwrapping presents on Christmas Day. We agents work all the time, but sometimes, maybe we should not. Or maybe we should hand the buyers over to an agent who has time.
This particular agent was in such a rush, she did not stop to consider that she could miss the train in Sacramento real estate. When she called, I let her know we had sent a counter offer to other buyers. Also explained I fully expected that buyer to accept the counter offer. It was mostly clarifications and we had already agreed upon the terms. However, if she sent a better offer, the seller is always free to pull back the counter offer.
For years, I have employed a counter offer tip that works so well that I just now am getting around to sharing it. I often share tips I have picked up over my 40-some years in real estate because I hope to help others. Due to the nature of Sacramento real estate, we agents are often so busy, we don’t stop to ponder some of the wonderful ideas we come up with. We just do them. Or, maybe I’m just talking about myself. Whether you use this tip yourself or you ask your agent to employ it, I guarantee it will save you from major headaches. Thinking ahead is one of the things I try to do. Because stopping problems before they start is my method of operation.
All it takes is one time that an offer gets screwed up before you might come up with this idea yourself.
See, the deal with a counter offer is it tends to change many of the terms of the purchase offer. Now, let’s say escrow or worse, the mortgage loan officer, forgets to read the counter offer (it happens!) and issues docs based on the original offer. If that happens, everybody has a problem, Houston. Further, the Sacramento appraiser could appraise the home at a lower price. Because appraisers tend to appraise at the sales price. To do otherwise is to turn in a non-conforming appraisal, and nobody wants that.
Naturally, one way to help counter that problem, pardon the pun on my counter offer tip, is to upload all documents to DocuSign in order: counter offer first, followed by purchase contract, addendum and accompanying docs. Then, after the offer is signed, download all of the documents into one PDF file. That way the counter offer can’t get lost and will always be the first document. Of course, to do this, you need to get the counter offer agreed upon first. Before signing the offer.
However, that is not my main counter offer tip. My main tip is to go one step further. In the purchase offer itself, I enter a text box for myself to complete when I sign the offer. The text boxes are positioned next to every term in the purchase contract that has changed in the counter offer. This means if the sales price was changed, for example, there are two spots to change on the first page of the purchase contract that contain the sales price. In both spots, I position a text box. When I sign, I enter verbiage in the text box that reads: see counter offer.
It helps escrow with the allocation of costs, too, especially if who pays what has changed in the counter offer. I insert those boxes throughout so there can be no excuse — no real excuse, anyway, for screwing it up.
I hope you have enjoyed my handy dandy counter offer tip and will find a way to save yourself future heartache.
Without going into specifics about the offer for the home on 985 Regatta Drive, yesterday the buyer removed all contingencies and we opened escrow. I know, it is backwards to how homes are commonly sold in Sacramento, but we are not negotiating in a normal market. Usually in a Sacramento transaction, the buyer presents an offer, the seller accepts and we enter escrow. Then the seller has 7 days to deliver disclosures to the buyer, and the buyer typically pays her own closing costs.
It goes without saying that I work with Bay Area agents to make a transaction close. I do what it takes. They are not always easy to work with because some do not sell very many homes and have little experience. Some do not have a lockbox key so they can’t access the property without assistance. And some do not know how we do business in Sacramento, just like we don’t really know how they do business in the Bay Area. Our practices are very different.
When we received the original offer from the Bay Area buyer for 985 Regatta Drive, I had never seen anything like it. The buyer pretty much asked for the moon and the stars. It would have been easy to dismiss. However, there was plenty to like about the offer. It started out a little rocky, a bit of misunderstanding, probably on both sides. But I quickly tried to work with the agent, and we began negotiating.
That’s all it really was. Negotiating what we want, while they negotiated what they wanted, and we found a way to make it work. We negotiated the Request for Repair before we entered escrow. Turns out the home is in pretty good shape, and there wasn’t much to worry about. Of course, we paid for our own home inspection upfront, but that was a small price to pay to make the transaction work.
Realtors can’t let ego get in the way as a Sacramento listing agent. Our client’s needs should always come first.
Unfortunately, two other buyers who were so patient and waited for us to finish the lengthy negotiations now cannot buy the home. Because 985 Regatta Drive, Sacramento, CA 95833 is presently pending. If I can sell this remodeled home in South Natomas by overcoming challenges in this manner, imagine what I can do for you.
The following story of can a seller withdraw a counter offer before its deadline happened recently in Sacramento. It goes like this. Seller put a home in Elk Grove on the market just before Thanksgiving. On December 31, the seller takes the home off the market and cancels the listing. On January 1, the home comes back on the market as a new listing at a new price. This is a way to reset the days on market and get a new MLS number. We do this to revitalize a listing and generate more excitement.
I should note this is not my listing. The story involves the buyer for this home in Elk Grove and how can a seller withdraw a counter offer. This home was listed by another agent. The price was apparently too high because it did not sell. Sometime in February, the agent put the home into “temporary off market” status or TOM, as agents refer to it. Sellers are supposed to give approval for a TOM status but not every agent asks.
In March, the listing came back on the market and then a few days later expired, and then extended. Toward the end of April, the home’s price dropped again substantially, where it sat for another month. Finally, buyers came along, represented by an agent, and made an offer. The sellers countered that offer. The buyers signed the seller’s counter offer.
This is when we had a seller withdraw a counter offer. The important thing to remember in this unfortunate chain of events is the timing. Before the agent sent the counter offer to the listing agent, the listing agent texted that the sellers had rescinded the counter offer. A few moments later, the agent sent another text to say the sellers no longer want to sell. The listing has been withdrawn from MLS.
The agent asked how can a seller withdraw a counter offer when my buyer has signed it? See, the deal is if the buyer’s agent had returned the counter offer prior to receipt of the text rescinding it, the seller would have been in contract. But for whatever reason, the accepted counter offer was not delivered to the buyer’s agent before the listing agent withdrew the counter.
I see this story play out time and time again. Often what happens is even worse than this story, though. Often what happens is another offer arrives while we are waiting for the buyer’s agent to send back the counter. In those instances, we immediately pull that counter offer before the deadline. Buyers who don’t act fast enough lose.
Don’t make the mistake of thinking that just because a counter offer is in front of you that you hold the cards. The clock is ticking, and you don’t.
Photo of Vika Gerassimenko at Yosemite