When these sellers called to ask whether I would prepare a Carmichael Realtors CMA of their home, they were very upfront that they were interviewing other agents. They asked me if I knew one of the agents, said they see this agent’s signs up and down the road, but I didn’t. All together, I figure they talked with at least 3 other area specialists who primarily sell only in Carmichael. I sell a lot of homes in Carmichael, but I don’t focus all of my energies in Carmichael. I sell in a four-county area, which means I have to carefully scrutinize each aspect of every single sale to stay right on the mark.
I don’t worry too much about other agents or what they do. They have their way of doing things and, over the past 43 years, I have developed my own techniques. Since my focus is listings, and that’s what I do for a living, I have refined my listings to an art, combined with science. Imagine doing the same sort of job every single day, you get pretty darned good at it. I don’t work with buyers, which makes me a true seller’s specialist. You don’t find very many seller’s specialists whose practice is limited to sellers in Sacramento.
When I first looked at the specs for the home and drew up my first Carmichael Realtors CMA, it was based solely on square footage and about the same value that Zillow gave to this home on Carmichael Creek, around $620K. But when I toured the home in person, absorbed its energy into my skin, stroked the antique fixtures, purred over the extensive remodeled work, it was clear that this home was worth more than the estimate provided by Zillow. Zillow is generally way off in one direction or the other. It also required a custom Carmichael Realtors CMA and not a cookie-cutter estimate.
In MLS, I poured over every home at similar square footage that had been remodeled in such a contemporary manner in Sacramento over the past 18 months. I scoured the sold comparable sales. Studied the photographs. And when I emerged from my Carmichael Realtors CMA, I put that estimate at $750,000. My sellers’ jaws dropped at the kitchen table. They could not believe it.
This is when I learned that all of the other agents they had interviewed for the job had given them an estimate around $650K. This did not fare well for me, I was thinking. Now I looked like a square peg in a round hole. There is a definite advantage in appearing like others and not the maverick that I am. But I was certain I was correct. I explained why, and assured them I was absolutely not throwing out a huge number simply to gain their trust and ultimately the listing.
Some agents operate that way, but I do not. I justified my numbers. I felt like during the time we were preparing the home for sale and shooting the photographs, including an aerial video, that the sellers were secretly wondering whether it was possible maybe a buyer would disagree. However, turned out I was 100% correct. We went pending within 4 days on market at my suggested price of $750K. The buyer’s appraisal also supported this value. The sale closed yesterday.
So I think the lesson here is to be careful whom you hire as your Realtor. Don’t just take any old agent’s word for your estimate of value. Ask how it was derived. Understand the calculations. Otherwise, you could be like these sellers. If they hadn’t called Elizabeth Weintraub, they would have lost more than $100,000 of hard-earned equity. If this isn’t scary, I don’t know what is.
Selling a home without an appraisal in Sacramento is not that difficult to do if you identify which homes might qualify for this set of circumstances. You may ask how do you do that? Well, for starters, you hire an experienced Sacramento Realtor who knows how to spot these types of homes. I remember a while back when I shared with a reporter from the Washington Post how I sold a home in Elk Grove without an appraisal and pulled underwater sellers out from under the house by selling over appraised value. I saved them from a short sale.
That reporter asked how does a person go about finding an agent who can do that? I don’t really know. I only know how I do it. I don’t play by the so-called expected rules all of the time, especially when I don’t have to. For example, most agents would run the comparable sales and try to determine a fair market value. If they’re really good agents and they actually pull up photos of the sold comps and compare interiors, upgrades, with the subject property, if they study the landmarks in Google to make sure they’re not analyzing homes on the wrong side of the street, they can produce a value the way an appraiser might do it; that’s one way.
But there are other ways to determine value. Part of selling a home without an appraisal in Sacramento is to determine demand. The way I sold the home in Elk Grove that by all practical standards was an underwater property and pulled those sellers out of short sale status was to figure out how to make that home appeal to an investor. I looked at what was available for sale and figured a 3-bedroom, 2-bath would produce X amount of income, it was in good condition, and I pushed the price to a breakeven cashflow point. It sold to a Bay Area investor for a lot more than it would appraise.
Contrary to popular belief, selling Sacramento real estate is not always about win-win. Nobody says things have to be equal or fair. Everybody has their own agenda. My agenda for my sellers is to get them the highest price. Not necessarily the price the home might appraise at. Selling a home without an appraisal in Sacramento is one way to accomplish that goal.
A buyer asked me the other day about buying a home. He asked too many questions, which made me think he had so many objections, he might pull out of an escrow. I explained our seller’s market, low inventory, high demand, multiple offers. Yet, he offered less than list price, knowing others would probably offer more, hoping, I suppose, we’d get only one cash offer instead of more than than one cash offer. I have that ability to figure out what a buyer will pay and market to those kinds of buyers.
I asked his agent why the buyer did not do what I told him he needed to do to buy the house. Her response was she didn’t think it would appraise at the amount we were asking. Why, she’ll have me know that she’s been an appraiser in a previous life. So, they offered a fair price. A market price.
I ask you, what does any of that have to do with the price of tea in China? Market price is what a seller is willing to sell at and what a buyer is willing to pay. It’s not appraised value.
Because I list and sell so many homes in the Elk Grove area, I get a lot of calls from appraisers asking about home pricing strategies and what happened during our offer negotiations. It’s a good thing I am organized. I keep all of my offers and notes on each in a separate spreadsheet just for reference. There is no way I can pull this stuff out of my memory. I’m lucky if I can recall the name of the street. The calls from appraisers generally center on how to substantiate the sales value without enough comps.
This is a serious issue, not only with homes in Elk Grove but throughout the Sacramento Valley. I am constantly suggesting to appraisers that they look at the big picture. At the end of the summer in 2005 we had more than 10,000 homes for sale. Today, about 1,600. Huge difference. To add insult to injury, we have more than 1,700 pending, which means if we didn’t take any new listings we would sell everything in Sacramento County in about 25 days. Home pricing strategies are important, but demand outstrips strategy.
One of my clients in West Sacramento who is getting ready to put her home on the market called yesterday to chat. She wanted to know if we should employ home pricing strategies suggested by an agent at an open house. I told her to stop talking to open house agents. Most of them are buyer’s agents, not listing agents. But I also realize open houses are a religious experience in California. The guy suggested she price her home about 1% below market value.
Hello? 2012 is calling and they want your Obama bobblehead back. That was a good pricing strategy 5 years ago but not today. If you price a home below market, you won’t get as high of a price as you will if you price it at market or slightly above. Buyers for the most part don’t know how much homes cost. They see only what other sellers are asking and base their opinions of value on that. The frenzied demand accelerates those expectations. Prices are going up.
Out of all the home pricing strategies available, the best for this particular market is to be slightly ahead of the curve. Because buyers will pay a fair price plus extra if your home is desirable and the price is reasonable. You don’t have to play games with the pricing or try to be sly. Go to market value, and consider pushing it a hair. The worst thing that could happen is a buyer won’t bridge the gap and the appraisal will come in lower. But buyers will offer more.
If you’re planning to sell a home in Sacramento, call Elizabeth Weintraub at 916.233.6759. Put more than 40 years of experience to work for you.
In my real estate practice of Sacramento home sales, I draw upon my 40-some years in the business when I advise my clients. Experience pays off. My sellers know I will share all aspects of the home sales process with them, and not just say what they want to hear. Of course, every seller loves to listen to praise, they want to hear their home is beautiful, but they absolutely need to know the downside, too.
I’ve heard of some Realtors who spend a lot of time criticizing a home, and what that kind of approach accomplishes, even if the criticism is deserving and true, is cause the seller’s heart to slip into her stomach. Often, sellers are suspicious of agents anyway. They know there are agents they can’t trust — just like there are people in all walks of every profession who are untrustworthy. But they especially mistrust the motives of an agent who can find nothing but bad things to say about their home.
Don’t blame them, either. I wouldn’t appreciate that kind of interplay. Just like I look for the silver linings in the worst situations, I can find positives in anything. Doesn’t matter if the home is leaning to one side, about to cave over, I will find something good to say about it. Like, perhaps the color is bright and cheery. Or maybe the angle lets in more light or air. Plus, it’s likely to be priced within the comps of nearby Sacramento home sales to a place where the lean-to is immaterial.
In the photograph above, I can see many things that are wrong with this kitchen. The cabinets are older, worn and lack hardware (pulls); the appliances are a horrifying white (which buyers hate) and they are mismatched, plus the stove is electric and not gas. There is no effective backsplash. The overhead lighting is not contemporary, and the flooring appears to be vinyl. Colorless walls, too. And let’s not even talk about the fact the refrigerator, which usually does not convey as personal property, supports an upper freezer (not bottom), and that triangle thing — stove, sink and ‘frig — is not working in this space.
On the upside, the kitchen is immaculate. It is perfectly functional the way it is, and all of the appliances are operable. The colors are light, which makes the kitchen appear much larger. The granite-appearing counters are not tile nor laminate, thank goodness, for purposes of this illustration the counters are granite with detailed edging, and they are a darker color so they won’t show marks or dirt. On top of which, the darker color of the granite provides contrast to the rest of the kitchen.
Look at that oversized window, too. It’s dual pane (yay) and runs the entire length of the sink, plus it appears to offer enough room to grow potted plants, which lend a nice touch to the ambience. The view is semi-private and the tree can provide a nest for birds, which means when you rinse dishes in the sink, your eyes can rest upon the delightful sight of frolicking birds, transporting a person away from the mundane existence of her miserable life. JK about that last part.
I share the good, the bad and the ugly with my home sellers. My practice is to downplay the negatives and play up the attractive points. Plus, if I shot this photo, I would remove the edge of the refrigerator; it’s distracting. I would not shoot the opposing wall because it makes the space appear smaller than it is. And I would stage the counters with more appropriate items to draw the eye toward the granite and away from the cabinets.
If you’re interested in knowing more about Sacramento home sales and want to hire a top Sacramento Realtor, please call Elizabeth Weintraub at 916.233.6759.
Having just sold a home on 5 acres in Auburn when I work primarily down the hill in Sacramento was no easy feat but thank goodness the sellers hired this Sacramento Realtor. Now, I know what some of you are probably thinking, so I’ll bring up the White Elephant in the room right away. I am not a specialist for Auburn real estate, but I have sold many homes in Placer County and I’ve done a fabulous job for my sellers. I get 5 star reviews. My position is if a seller has to choose between a Realtor like me with 40 years of experience or a newbie neighborhood agent who attended school in the area, has family in Auburn and knows everybody in town, the sellers are still much better off with an experienced Realtor from the big city. And Sacramento is about as big as we get around here.
Because this Realtor employs big city ideas and has had years of making mistakes elsewhere to learn from. So, yes, I don’t own any Wellies. I showed up wearing heels and a silk dress to meet with the sellers because that’s who I am. Mr. Seller shook my hand and said he had promised me the listing because I had been referred to them from a relative whose home I had earlier sold in Cameron Park, and even though another agent tried to wrangle the listing away, he and his wife were sticking with me. Loyalty. A person of word. Great Realtor selection. 🙂 All excellent qualities in a seller. I accepted the job.
We discussed market value, and I had studied the Auburn real estate market extensively. I showed the sellers my homework. Coming up with accurate price suggestions is one of my strong suits. I examine not only the comparable sales but which way the market is moving and buyer attitudes. My suggestion for a sales price was $595,000 (not $599K, not $625K). The sellers agreed.
Now, I would not be human if I said the Estimates of Value for this home on 5 acres in Auburn that came from my Lyon office in that neck of the woods were not a little bit disturbing. These are called EOVs, and when agents tour new listings in the area, they often prepare an EOV to help the listing agent. I actually figured these agents would probably be the agents to bring us an offer because they represent a lot of buyers in Auburn. I also used the Auburn office listing signs, not my own, on both Highway 49 and the property, which was located at the end of a private road, so that office would get most of the sign-generated phone calls. They could dash over at a moment’s notice to show an interested buyer.
If they read this, and they probably will, there is no way to ignore what happened. So I’m gonna just lay it on the line in hopes they will do better next time. The EOVs I received from the real estate agents at the Lyon office in Auburn for my $595,000 listing were as follows:
- Agent 1: $499,000 to $525,000
- Agent 2: $545,000
- Agent 3: $525,000 to $535,000
- Agent 4: $550,000
- Agent 5: $549,000
I sent the EOVs to my sellers, and I thanked the agents for coming out to tour the home and for preparing the EOVs for me. I am always grateful for the support from my other Lyon offices. However, I could not for the life of me figure out why these 5 agents did not believe the home would sell at our list price. I figured these guys sell in Auburn, that’s their specialized real estate market, and they should know the value. What if I was dead wrong? I reviewed my homework and decided to stay the course, and suggested the same to my sellers. We’d stick at $595,000.
Sure enough, the home on 5 acres in Auburn sold at $595,000 and closed yesterday. They Lyon agent EOVS were all way off base. Maybe it was a freaky thing?
Not only that, but the sellers did not pay for any of the inspections, even though it is customary in Auburn for sellers to do so. We just said no. We got away with it because of the market conditions. Because the sellers hired an experienced Realtor to sell their home who devises custom strategy for each of her sellers as a matter of practice. I truly keep their best interest at the center of my focus. Bottom line, you don’t always need a neighborhood specialist and, in fact, sometimes you’re better off hiring an outsider from the big city with better skills.