Getting More Money Out of a Low Appraisal in West Sacramento
When the seller of a home in West Sacramento contacted this Sacramento REALTOR, he already had a different listing agent in mind, an agent who would charge less than the commission that agents like me charge and he was just about ready to hire this other real estate agent. See, this is where some sellers typically go off track. They tend to focus solely on the commission and not on results. They don’t know any better. They think about saving 1% of the sales price, for example, and don’t look ahead to how much they are probably losing during escrow because they’ve hired an inexperienced agent who can only sell herself by discounting her fee.
Getting into escrow, into contract, is just the beginning. There are home inspections, disclosures, repair requests, and more negotiations that happen during escrow, including dealing with shaky buyers who can’t get a mortgage.
Fortunately, this seller listened to his friend who had referred him to me, and he listened to my advice. He decided it was worth it to hire the best Sacramento REALTOR he could find, a top producer. I explained what I would do and how I would do it, and then he asked me how much his home was worth. The comparable sales reflected, let’s say for practical illustration purposes, a price of $450,000, tops, and that was stretching it. Because any agent worth her salt realizes an appraiser will use comparable sales within a 1/2 mile radius of the property and within the past 3 months. Appraisers are supposed to compare condition, location, age, upgrades, size, etc, and pick similar homes. But every appraiser is different, just like every real estate agent is different.
I didn’t ask the seller how much he wanted because in most cases how much a seller wants is immaterial; instead he shared in no uncertain terms that he expected to get, let’s say, $475,000. Would I take such a listing? Could I get him $475,000? I licked my finger and held it in the air to confirm which way the wind blows. Yup. I could. I shot terrific digital photos that showcased the home in all of its glory, and it was a stunning home. I tell stories with my pictures. If the photos speak to me, they will speak to the buyers.
This home in West Sacramento sold at, let’s say, $475,000. Then, the appraiser, an old-school dude who has his own way of doing things, submitted his final estimate of value. $450,000. Market demand is not a value. We got a low appraisal in West Sacramento. We were $25,000 short. This is NOT what the seller desired. I asked the buyer’s agent to discuss the situation with the buyer and put forth in an addendum the buyer’s best cash contribution.
The buyer offered an additional, let’s say, $12,000 in cash to bridge part of the gap. This was a good workable situation because now we knew the buyer has access to additional funds. We were in negotiation, not at the final step. We countered the buyer’s contribution, and the buyer’s countered back. We countered again. The seller asked if I could find additional money anywhere else. Ha, ha, ha. No, there are no other pockets. Oh, wait, we didn’t talk to the lender.
For a small adjustment to the interest rate, the lender was able to find more money that suddenly became available to pay much of the seller’s closing costs. By transferring a large chunk of the seller’s closings to the buyer’s side of the settlement statement and allowing the lender to pay it, the sales price did not need to increase by the full $25,000 to net the seller his desired amount.
Was this worth hiring an experienced agent who charges more than a discount agent? You betcha. I could not ask for a more ecstatic West Sacramento home seller. At closing the seller called me a “Real Estate Rockstar.” I go that extra mile for my clients. Would you like to be my client? Let’s talk. Call Elizabeth Weintraub at 916.233.6759.