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.