Must a Sacramento Seller Accept a Full-Price Offer?
A Sacramento real estate agent can bring her seller a full-price offer, but she can’t make the seller sign it. Not if the seller flat-out refuses. You might wonder what kind of seller would turn down a full-price offer, and the answer would probably astonish you. All kinds of sellers would do this. Smart sellers, ignorant sellers, wealthy sellers, dirt-poor sellers, sellers who live in the country and sellers who live in the city — it doesn’t seem to matter.
What I suspect is bringing on this baffling phenomenon is the rising market in Sacramento. Sellers hear all about multiple offers and they mistakenly believe that it is permissible to demand a higher price when the seller receives an offer. I now make it a practice to have this discussion with my sellers before we go on the market. I explain that if we receive a full-price offer and no other offers, then the seller needs to accept the full-price offer. You would think that an agent would not need to explain how real estate works, but she does:
- Johnny offers a product for sale at X dollars.
- Susie offers to pay X dollars for the product.
- Johnny gives Susie the product in exchange for X dollars.
Johnny can’t say, no wait, now that you have decided to buy my product, I want to charge you more for it.
Sellers don’t live and breathe real estate the way a Sacramento real estate agent does. Because it’s not their job. They are doctors and lawyers and business executives.
Probably the worst example that has happened to me lately was a seller who owned a home under the freeway. Not only was the home located under a freeway, but it was next to a commercial franchise business. Not only was the home under the freeway, next to a commercial franchise business, but it was on a busy street, and not one busy street but pretty much the intersection of 3 extremely busy streets with a lot of traffic. I wondered to myself, what would be a worst location? Graveyard? Next to a school? Across from a church? Nope, probably a worst location would be next to a garbage dump or maybe a toxic waste site.
Location, location, location. The number one rule so many forget.
But I don’t judge the properties I sell. Some sell quickly and some will require that one special buyer, and I do a pretty good job at finding that one special buyer. Some homes don’t appeal to the masses but only to a select few. The reason a person would buy a home in the above type of location is if the home was the least expensive home in the neighborhood. Finding that sweet spot in the pricing can be challenging as well, but not impossible.
When I brought a Sacramento seller a full-price offer and the seller uttered the dumbfounding words: “I’m not signing that,” I was blown away. It was the third time in a few weeks that has happened. This was an offer that would release the seller from a bad investment that he should have never made in the first place. The offer paid off his back taxes, delinquent utilities, many years of unpaid interest, all of his loans, the commission, all costs of sale, plus it put a nice chunk of change into his pocket. Moreover, it was an offer for a little bit more than his list price. The buyer was willing to purchase the stripped and vandalized property in its present condition. Where are the smelling salts when you feel faint?
Sellers don’t understand that they cannot issue a counter offer for more money. A seller cannot put a home on the market, get an offer at the price advertised, and then decide they want more money because that could be called false advertising. It could be considered against the law to advertise a property under false pretenses.
Say, I am a grocer. I stick a big sign in my window that advertises 5 pounds of apples for $1.00. You walk into the store, spot a 5-pound bag of apples, bring it to the cash register and hand the clerk $1.00. The grocer can’t pop out of the back room and demand that you pay $2.00 for that bag of apples. You might feel like you were a victim of bait and switch, wouldn’t you? Same thing.