home buying sacramento
Does leasing a car affect a buyer’s ability to buy a home? As a mortgage professional for almost 20 years, I know just about every gotcha that can cause an underwriter to deny your loan. We look at a borrower’s monthly minimum obligations paid on debts. We take those minimum payments, including your proposed total mortgage payment (principal, interest, taxes, insurance, and private mortgage insurance). Then we divide this by your gross income. This debt-to-income ratio is the barometer we use to determine your ability to repay the mortgage.
Submitting home buying offers in Sacramento 2020 should be well-thought out with a strategic plan. The market is very competitive as inventory is down by a third in many areas. What does this mean for homebuyers? Perseverance is the answer. Understand your priorities. Be willing to compromise and invest in sweat equity. When buyers cling to very stringent criteria, it is a challenging journey. To have “it all,” you will pay dearly and may have to build a custom home, which is not inexpensive. However, when you buy a resale home, you are not paying top dollar for upgrades.
The way I see it, the problem with Sacramento home buyers who offer less than list price is it’s often a case of the blind leading the blind. I’m sorry, there is just no other way to say it. You’ve got buyers who have probably never bought a home in their lives trying to figure out how much to pay. And you’ve got a buyer’s agent who probably doesn’t sell very many homes. The agent most likely has had little, if any, training about appraising a home.
Often, these are buyers who offer less than list price because they saw an HGTV show. In those mythical fairy tales, buyers are always offering less than the amount the seller asks. Talk about overly generalized. We have a Sacramento sellers market, which means sellers can hold out for and will get list price. Very few homes for sale, high demand, hello?
Further, many agents struggle with deciphering comparable sales. They might notice a comparable sale in the neighborhood that sold for a higher price and try to compare it to the the home their buyer wants to buy. The difference might be a slight variance in the lot size. But they don’t know enough to figure out that maybe the back yard of that larger lot is filled with high tension power lines. So a smaller lot size does not equate to a lower sales price for the home in question. It is very likely they also don’t realize an appraiser might give only an extra $5,000 for a slightly larger lot. For many reasons, they hand out bad advice to a buyer.
Bottom line is most buyers who offer less than list price don’t get the home. The buyers wrongly blame the seller for being stubborn when they should be looking elsewhere for answers. These guys should be examining their own inadequacies. Coupled with the skills lacking in the agent they hired. Because that’s what caused them to lose the house.
Also, take a moment to realize that comps are not the only way to figure out the value of a property. Sometimes it really does boil down to the amount the seller will accept and the sum a qualified buyer will pay. That is the true definition of market value.
In closing, if a buyer is so certain a home is not worth the asking price, why not make a full price offer anyway? If it doesn’t appraise, the seller is likely to renegotiate. But the buyer will never get to that spot if the buyer doesn’t go into escrow. When it does appraise at the sales price, just close escrow. Get on with your life. Arguing gets you nowhere. Five years from now it will make no difference whatsoever.
Selling Sacramento real estate is a little bit like selling pastries. Everybody always wants the cherry beignet or creme brûlée, and they walk right on by the original glazed creme doughnuts or cinnamon rolls. Sell out of the chocolate-sprinkled pastries, and people go wild and keep calling, wanting to know when you’ll get more chocolate sprinkles. Or, maybe it bothers me more than I let on that Doughbot has closed its doors over on 10th Street and W.
The thing is once a home goes into escrow, it seems everybody wants it even if for months nobody wanted it before. Bam, pending sale and buyer’s agents start calling to see if the seller won’t at least allow one more showing, puhlease. They want to know how the sale is moving. If we don’t have a release of contingencies on file, we don’t really know for certain how the sale is moving.
The truth is I can’t predict whether a buyer will close escrow on a Sacramento real estate transaction. I can call the loan officer to ask if the buyers have actually filled out a loan application and submitted tax returns, and that’s a step in the right direction, but it doesn’t assure anybody that the buyer will close. Buyers have a way of freaking out lately, maybe more so than usual. Sacramento real estate has been a bit squirrelly over the summer.
It’s almost like I want to ask the buyer’s agent, are you certain your buyer wants to buy a home in Sacramento? Because a signed purchase offer for that piece of Sacramento real estate is NOT that assurance. It should be, but it’s not. Further, I would like to shelter my seller from any disappointment these types of situations can generate. But we can’t protect them from buyers who will change their minds.
Their agents aren’t likely to ask if they are certain. Their agents are more likely to say sign here and here,?and thanks for the earnest money check. Not because they’re ruthless or whatever, it’s because they often wrongly assume that because a buyer signs a purchase offer that the buyer really wants to buy the house. So, I don’t know how solid an offer is and there is no way I can accurately or honestly tell a buyer’s agent if it’s worth pursuing a pending sale.
If the buyer doesn’t want the chocolate eclair but prefers the creme brûlée, then by all means, put a backup offer on the creme brûlée but that chocolate eclair, I tell you, is mighty tasty. I encourage you to call Elizabeth Weintraub for all of your Sacramento real estate needs.
Oh, sure, there is a closing date specified in the purchase contract on page 1 near the top. It will either indicate an exact date, such as April 30th, or it will give an approximate number of days (usually 30) from the date of the contract to close. The date of the contract is the date the agent (or buyer) received the executed contract, which is usually the date the last buyer signed, not the date the purchase contract was drawn. However, to many mortgage lenders in Sacramento, those closing times are simply estimates and mean little.
If the closing date expires, the mortgage lender will simply expect all parties to extend the purchase contract. That’s because mortgage lenders might not give a crap about whether the loan blows up because the seller refuses to extend. They work in some other financial arena, worlds apart from Sacramento real estate. It happens. Sellers are not obligated to extend the purchase contract upon expiration. Buyers might cry foul under those circumstances but what happens if a seller could sell to another buyer for more?
Big name banks, and you all know who they are, are the most guilty of not closing on time, but so are the itty bitty real estate companies that try to wear two hats and be a mortgage broker plus a real estate agent to some poor fool. The first is because they’re too big to care and often employ salaried employees who don’t give a hoot either. The second is because they’re generally inexperienced and too small to carry any weight.
The fact is we real estate agents can push and shove or be as sweet as sugar all we want to manage escrow closings, but until the underwriter releases the file from underwriting and sends docs to title, we don’t really know for certain when we will close. Once we get the docs, then we can target the date. This is why it’s so important to work with a mortgage lender who can guarantee a closing date. These lenders do exist.