Sacramento First-Time Homebuyers Now Have a Fighting Chance
Compared to a few years ago, first-time homebuyers in Sacramento now have a fighting chance to buy a home without a ton of competition from cash investors. They just have each other to compete with, yet some of them are going about it the wrong way. The wrong way is when the buyers refuse to take their agent’s advice. They might say they listen to it, and then they do things their own screwed-up way. When the offer doesn’t get accepted, though, they tend to blame their agent instead of themselves.
This is nuts. My heart goes out to buyer’s agents who end up writing offer after offer that gets rejected because buyers are hung up on the wrong things. Like list price, for example. List price can be meaningless. It’s a measurement. It’s the comparable sales that matter. But people get attached to personal agendas, mantras and odd beliefs, not to mention our favorite sidekick: fate.
Homebuyers last week told me they had a specific price point in mind, but they were looking at an Elk Grove home priced higher. This home had been on the market for only a few days and they wanted to offer less than list price because it didn’t fit their plan to pay slightly more. Well, a reasonable person would say: stop looking at a home you can’t buy at the price you want to pay. But reasonable people aren’t necessarily buying real estate. The fact is a hesitant buyer needs to conform because some other proactive buyer will conform. These buyers reconsidered, conformed and they got the house, over a full-price cash investor.
This market in the spring of 2014 in Sacramento is different than previous markets. We no longer face stiff competition from cash investors. Of course, we Sacramento listing agents still receive full-price cash offers and a few lowballs from investors, but for the most part, the market is made up of first-time home buyers and move-up buyers. I counsel my sellers about choosing between an investor buyer and a buyer who will occupy the home. Does it matter who buys your house? You bet it does. And sellers can legally choose to sell only to an owner occupant.
Not surprising to real estate agents, a story in the Sacramento Bee says homeownership in Sacramento has fallen to a 40-year low. That’s not surprising, given the number of sellers we observed who said yes to the cash investors over the years and no to the first-time home buyers. But now the tide is reversed, and we still have a fighting chance to take back our neighborhoods, providing first-time homebuyers step up to the plate.
The kind of purchase offer a buyer makes can mean the difference between buying a home and not buying a home. Here’s my general advice: Study the comps, listen to your agent and, if the home is on the market for only a few days and the price is justified, pay it or somebody else will. A more savvy buyer will probably pay more than list if the deck is stacked against them. If the home is super desirable, a hot commodity and you’re an FHA buyer or a VA buyer, you’re just not as desirable to the sellers as the conventional buyers, so step up your price and terms or you’ll fall to the bottom.
Hey, agents don’t make the rules. The market dictates.