Why Some Sacramento Home Buyers are Not Buying a Home
Sacramento real estate runs in cycles but no year lately has been the same as the last, much less the approaches used by Sacramento home buyers. We had a big run for 8 long years of short sales and foreclosures, but that reign is pretty much over. Sacramento has been on the rebound for the past 2 years and rising prices has shown us that. The really big push in price increases was in 2012, which continued into the summer of 2013 — what some would call a market correction. That’s why the investors have left the market because they were there at the bottom and don’t want to ride the wave up, leaving us in a real estate market filled with confused home buyers.
Yet, don’t get the idea that the market is overpriced or over inflated because it’s still appreciating, it’s simply doing so at a quiet and very slow pace. In some neighborhoods, prices might be a little flat, but they’re not falling. Full-price offers and multiple offers are still happening on the entry-level homes, especially those that are highly desirable, ready to move into. My February is filling up the calendar with March closing inventory nicely. I predict we’ll see a huge push in closed sales for March across the board in Sacramento.
I also see some Sacramento home buyers making big mistakes. I highly doubt they’re not getting good advice from their buyer’s agents because most agents have a pretty good idea of what’s going on. I suspect that buyers are talking to Uncle Joe who’s moving kinda slow, the guy who mows their lawn, the clerk at Safeway, and getting bad advice because they’re looking for advice in the wrong places. The buyer’s agents I know are working extremely hard and feeling like they’re banging their heads back and forth in a door jamb — because it feels so good when they stop. But they’re not going into escrow with their buyers.
Some Sacramento home buyers think a seller would grab an offer without financing, known as all-cash, over an offer with financing. But sellers don’t really care if you hand them a brown paper sack filled with $100 bills or a check drawn on Bank of America, it will all end up in their bank account anyway. Sellers care about the sales price and terms. Buyers don’t get a break due to financing. They might move up the scale in a multiple-offer situation with better financing or cash, but price is still king. Price rules. Get with the program. It’s a new dawn.
I’ve also seen Sacramento buyers submit under-market price offers, sometimes known as lowball offers, when they know the seller has received multiple offers, as in 3 or 5 offers or more. I wonder why they do that to their agents? It sounds sadistic to me. They have no chance in negotiations yet they insist on submitting an offer. Maybe that’s not sadistic, perhaps that’s the definition of insane, doing the same thing over and over with no chance in hell of accomplishing anything.