buy a home
This post below, A Real Estate License Won’t Help You to Buy a Home was written in 2012 by my partner Elizabeth Weintraub and is still very relative today. Because the market is strong, every Tom, Dick and Harry wants to get a real estate license. Enjoy.
Some people in California think it’s a good idea to get a real estate license just in case they ever want to buy a home in Sacramento. Because if you have a real estate license, then you can collect a commission, which is reflected as a percentage amount of the sales price. All commissions are negotiable and generally paid by the listing broker to the selling broker, so while you might think this could amount to a lot of money, it’s generally not by the time it reaches the buyer’s agent pocket. Not in the overall scheme of things.
” A Real Estate License won’t help you to buy a home in Sacramento. ” This excerpt was written by Elizabeth, several years ago. A blog that was absolutely right on target. I agree a Realtor has no professional distance when they are buying, without representation, no matter how much experience they have. Can you be fully objective when you are also the client and not familiar with the area?
When buying out of the area and representing yourself it is like rolling the dice, I prefer much higher odds. A local expert is always worth the cost. Often when we are representing clients we can potentially save them $1,000’s of dollars. In some cases, it has been 10’s of thousands and yes even hundreds of thousands of dollars saved. As we are executing without a conflict of interest, emotions are in control. I often tell clients when their emotions are engaged, though I understand the worry, I must stay focused to navigate the transaction. My job is to keep us moving forward through each milestone. — JaCi Wallace
Non-affordability is not an argument nor a negotiation tactic. If you’re standing by the entrance to a freeway with a sign that says Will Work for Food, it’s possible a passerby might offer you a job or a good-hearted driver might flip you a twenty, but asking for charity when you’re buying a home is not quite the same thing. Yet, that doesn’t stop buyers from requesting it. Further, a refusal does not mean the seller is a meanie and big ol’ grouch, either.
An agent asked my seller yesterday to “have mercy” for his buyers, because they are young, with a small family, struggling and pregnant. These stories have a time and a place, we encounter them every day, but do they pertain to housing, to Sacramento real estate? Are sellers heartless, cruel and without compassion if they don’t reduce a sales price so cash-strapped buyers can purchase a home that is outside the boundaries of their financial reach?
I wonder if buyer’s agents should push a product that people can’t afford to buy? Not every buyer needs to own a home. Not every buyer should own a home. Maybe, just maybe, the buyers should not buy a home. There is no shame in renting a home, and millions of people are tenants. If people did not want to rent a home, there would be little reason for investors to buy single-family homes or condos as a long-term hold investment.
Yes, I realize just about every Sacramento real estate agent you run into will say you should buy a home. But maybe you should not.
When I asked my sister why my niece was still living with her instead of buying her own home, the answer was my niece doesn’t make enough money. Well, she does make enough money, she just doesn’t have two years on the job yet. She dropped out of college to take a job at a franchise shoe store in Minnesota selling shoes. Why? Because she likes shoes. Well, I like ice cream but you won’t see me handing out ice cream cones at Vic’s. Sometimes, I wonder if we are cut from the same cloth.
With a salary of $30,000 a year, my niece would easily qualify financially to buy a home. There are small homes in stable neighborhoods available for $100,000. With $3,500 down, my niece’s monthly payment at 4% interest, including taxes, insurance and private mortgage insurance would run about $625. That’s a 25% front-end ratio and very doable. It is cheaper for her to buy a home than to rent.
The neighborhood my sister lives in is near Lake Nokomis in Minneapolis. Homes are less expensive in this area of the city because planes fly very close overhead. You can almost see what passengers are drinking onboard. But it’s only a couple times a day, small price to pay for affordable lake living.
And let’s face it, you just can’t live with your mother forever, can you? Although, my sister says it’s like Grey Gardens at her house, and I believe it.
Photo: Laura’s new kitten, M. Burgard
Photo: Gollum, Photobucket
One way a purchase offer can gain traction is to be written correctly. This may sound overly simplified and you might wonder how anybody could write an offer incorrectly, but that’s obviously because you are not a listing agent in the greater Sacramento region. If you were a listing agent, you would know how offers can be written incorrectly.
Write the offer without mistakes is the number one rule.
It’s difficult to write a purchase contract without any mistakes. It means an agent needs to re-read MLS to make sure all of the directions were followed. Sometimes, listing agents insert tips or requirements into MLS, so it’s a good idea to review the confidential agent remarks and look for attachments in MLS. Veteran agents know that we live in strange times. It also means checking the correct boxes, making certain the buyer’s name is spelled correctly and matches the preapproval letter, double-checking the math and terms, using the right property address, including required documents, and so forth. Dot I’s. Cross T’s. Don’t give the seller a reason to reject your offer.
I can’t tell you how many offers the Elizabeth Weintraub Team gets accepted in Sacramento simply because the offer is written correctly. No other reason. It’s not our ranking or the fact that other agents respect us, it’s that our offers generally do not contain any mistakes. Because what is there for a seller to base a decision upon apart from price / net proceeds? In a short sale situation, for example, the seller isn’t even receiving any of the profits so price, while important, is really not a primary consideration. Commitment to the transaction is paramount, as is the ability to close escrow. In a short sale, you’ve gotta be willing to wait for short sale approval and be able to close without delays or hiccups.
A while back an agent changed the amount of the earnest money deposit in a purchase contract that I received. The amount was cut in half. It was simply crossed out and rewritten, without an initial. I did not know whether the agent changed the earnest money deposit or if the buyer had altered the contract, but in any case it was enough for me to question the buyer’s agent. I felt this was an issue the seller might want to know and she may raise the question herself. Why did the buyer lower the amount of the earnest money deposit on this short sale?
The buyer’s agent explained that the buyer did not want her money tied up for a period of possibly 3 months. Probably because she would be losing out on that whopping .5% interest rate paid by local banks — that 60 cents paid over 90 days.
The seller was looking for a committed buyer. A buyer who really wanted the home. A buyer who was willing for 3 months. This is a seller’s market in Sacramento. Many sellers receive multiple offers. Sometimes, a seller can receive a dozen purchase offers or more within 24 hours. In a short sale, many sellers are not looking for a reason to accept a purchase contract — they are looking for a reason to reject it so they can focus on the few offers that fit the sellers’ criteria. Try not to give the seller any reason to reject your offer.