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Does Seller Motivation Mean No Regrets After Listing a Home?
Seller motivation is important in any Sacramento real estate transaction and extends beyond an urge to sell a home. It extends all the way to closing. Seller motivation means many things, though. When buyer’s agents ask me if my seller is motivated, they are asking if my seller will accept a lower price for her home, and the correct answer to that question is: I send all offers to the seller. A listing agent who responds without permission: heck yeah, let’s negotiate, could be guilty of violating her fiduciary duty to the seller.
Sometimes I spot listings in MLS in which the listing agent has entered that phrase into confidential remarks, the seller is motivated. This may cause a person to think to herself: sure, of course the seller is motivated because the seller has his home on the market, right? Followed by well, there is the matter of the home being priced $100,000 over market value, so that sort of extinguishes the flames of seller motivation right there. In those types of cases, seller motivation might be a secret code to buyer’s agents, letting them know the agent is aware, say, of overpricing, but can’t say so.
Sellers often don’t want to reduce the price because they expect a buyer to negotiate. They fail to understand that buyers really don’t want to negotiate. They cannot wrap their heads around that fact because they are too stuck on the mentality of being a seller. In cases of homes priced too high, buyers often just skip them.
There is also seller motivation that backfires and turns into seller’s remorse. This tends to happen when a home quickly sells or at a higher price than the seller anticipated. The flurry of marketing activity, preparing the home for the market, surviving buyer showings and open house traffic can shift the focus from moving out to getting ready to sell. When the purchase offer arrives, it can cause shock, especially when the seller typically needs to sign within a 24-hour period. A seller can feel pushed. Aggravated.
Harried, exhausted, irritated and feeling like always running a day behind can cause seller’s remorse. It’s not unusual for a seller to question whether he or she has done the right thing by signing a purchase contract. Often this feeling of uncertainty will pass if they just give it a little bit of time to settle in. We all do not process data in the same way. This is why it’s more important now than ever to establish and review your reasons for selling a home before putting your home on the market.
I try to spend a sufficient amount of time with prospective sellers before I take a listing. I met with two different sellers on Friday who are not yet ready to sell their homes. One seller lives in Elk Grove and the other in a 1920’s brick bungalow in Midtown Sacramento. It was easy for me to ascertain that the time is not right because I asked the right questions. The last thing anybody needs is an unexpected upheaval in her life or feeling coerced into signing a listing agreement. I have plenty of patience and compassion. When you’re ready to sell your home in Sacramento, I hope you will call Sacramento Broker #00697006, Elizabeth Weintraub at 916.233.6759.
No Guarantees in Sacramento Real Estate for a Seller
It seems that Sacramento sellers are wanting a lot of guarantees in a sale these days, some of which they just can’t get. That’s a recipe for a few frustrated sellers. For example, I’ve had sellers tell me they want 100% assurance that the buyer can get the loan. Well, I’d like to be 29 again, too, but it ain’t gonna happen. OK, maybe not 29, maybe 39 instead. Yeah, like Jack Benny and 39. A perpetual 39, never a day older.
We can get a preapproval letter from a lender, and we can do all the due diligence possible about that letter, but it’s still not worth a damn thing. Lenders are not required to guarantee that the buyer can get a loan. Some of them don’t even run credit reports, if you can believe it, and I do because I see this sort of thing all the time. Many don’t even complete a loan application, because it’s too much work for a buyer who might never get an offer accepted, or whatever.
We can demand a DU (desktop underwriting) but even that is not a guarantee. It will disclose FICO scores, but that doesn’t mean that one of the parties doesn’t have a lien filed against her or an ex-husband has had a foreclosure in the past or that a buyer won’t lose his job midstream. Anything can and often does happen during escrow. Buyers change their financial situation and ruin their chances of buying a home, all on a whim, as they seem to undergo a temporary lapse in judgment. But it was so pretty, sparkly, dangly, fast, sleek, new, modern, um, they forgot. Oops.
I recall a couple of sellers who demanded that I lay out for them every situation that could possibly affect them during the term of escrow. What? Do you want to sleep at my house while I do this? Then, they asked if I would recite line-for-line each page of the 10-page purchase contract and explain each sentence as though I am a lawyer. In the middle of another escrow, sellers decided they no longer cared for the buyer and asked to replace the buyer with a new buyer, as though I have the power to magically unwind a contract. Abracadabra. I do my best to anticipate problems and head them off before developing, but I can’t possibly predict every scenario that could pop up during escrow.
Some things are surprises because, well, they are a surprise.
Like when a buyer drops dead. I don’t always expect that to happen. But it does.
But I know what it is. It’s fear. It’s fear that sellers are doing the wrong thing or making the wrong call. If one little problem pops up, there are sellers who will try to find a way to pin it on the listing agent. And that’s OK, really. You could pin a tail on this donkey, and I wouldn’t feel it. I don’t force them to take responsibility for their own actions. I’m not their mother. My job as a Sacramento Broker is to move them from Point A, which is putting the home on the market, to Point B, which is to closing and pocketing a big ol’ wad of cash in the seller’s bank account — at which point, they forget all about the drama.
I can’t guarantee that nothing will ever go wrong, but I can promise to try to fix it.
Call Elizabeth Weintraub, Broker #00697006, at 916.233.6759.
Why the Sales Price a Sacramento Home Seller Wants Does Not Matter
One of the questions a Sacramento home seller asked me last week during a FaceTime interview is why didn’t I ask her how much they wanted to sell the home for, because every other agent they talked to had asked this question. I was very honest, as is my nature, and I explained that it doesn’t matter. Because it doesn’t matter how much the Sacramento home seller wants. That’s actually pretty much immaterial in a transaction; what is more important, what takes center stage, is the appraised value, which is based on comparable sales.
In fact, asking how much a home seller wants is a way to nail a seller to a lower price. It’s also a way to determine if a seller is crazy. Those words: how much do you want? are never the words that come out of my mouth because I want to do a good job for the seller, not take advantage of a seller. I would advise a client not to work with an agent who asked that question as though it was important to the matter at hand. It’s not.
Being honest like that probably cost me that listing. I could tell they didn’t like the answer. And in retrospect, when I noticed that reaction, I could have soft-shoe pedaled around it but I didn’t. The truth is there are many values to a property:
- what the seller wants,
- what the agent thinks they can get,
- what the buyer will offer,
and none of those really matter one iota if the home doesn’t appraise for those values.
However, I work for the seller, so I do whatever that Sacramento home seller wants and what is best for the seller. My clients can always count on the fact that I will protect our fiduciary relationship and do the best job possible.
These particular sellers wanted a list price from me on a home I had not viewed in person. That’s pretty difficult to do unless it is a tract home in Elk Grove or Natomas or Lincoln. Mid-Century modern homes that are custom built on acreage, well, you’ve gotta see it in person and feel the vibe, as kooky as that might sound.
Then I can give an accurate list price, a number in line with pricing the home to sell. Which might have nothing to do, btw, with our final projected sales price. Those can be 2 different numbers as well, depending on strategy, type of market and timing. Each home that I sell in the Sacramento Valley is unique, and I don’t really sell any two homes in any identical manner. I apologize that it doesn’t matter what the Sacramento home seller wants because we all want to feel that our opinions and desires are important and they matter, but what I want doesn’t matter, either.
It’s only what the appraiser determines. The appraiser has the last word. Unless . . . and that’s another blog for tomorrow. Call Elizabeth Weintraub, Broker #00697006 at 916.233.6759.
What Does it Cost Sellers to Close Escrow in Sacramento?
Before listing, most people want to know how much it will cost sellers to close escrow. That’s a pretty loaded question because the largest expense is not always the commission. The way it works is you generally get what you pay for. If you want a top producer to focus on your home and maximize the profit potential, you will pay more in a commission, but you net more than the difference paid. For example, when top producers like myself charge 6%, we also pay attention to ways to reduce closing costs. On top of trying to attract multiple offers to increase the price. If we weren’t worth it, sellers would not pay it. They see the value. I show it to them.
So, actually the commission is not the biggest expense. The biggest expense is hiring a cheap agent who doesn’t know what he or she is doing. Or falling victim to the home inspections’ scam of a bloated request for repair. This is when the buyer bids over list price and then tries to grind down the seller after inspections reveal, guess what? That the house is like every other house of its vintage and has a few defects. Inexperienced agents can’t really explain repairs to buyers, and inexperienced listing agents are no better. Many just tell the seller to pay the buyer’s demands. That’s the extent of their so-called service, but that’s also why those listing agents don’t make the big bucks. Not like this elite club of top producers who get paid more because they are worth it.
Otherwise, to figure out how much it will cost sellers to close escrow in Sacramento, a seller would also need to add back all the money the seller didn’t lose after inspections. In addition to adding the higher list price because we grabbed a buyer from the Bay Area. Those sorts of specialities performed by top producers.
But an easier way to compute how much it may cost sellers to close escrow is to take the sales price times 7% and deduct that number. Then deduct the unpaid balance of your mortgage. What’s left is your net profit, assuming you have hired a top producer to list your home. If you haven’t, you can probably deduct another 5% to 10% for inexperience. If you have hired a top listing agent, then your net profit is 93% of the sales price, less your existing mortgage balance. My wacky way produces a result within $500 or so with this off-the-cuff method.
Of course, the sellers I work with get an estimated closing statement upon demand. But if you wanted to figure this on the fly, that’s how you do it. If sellers prefer a breakdown of itemized deductions, as a former escrow officer, I can certainly explain each item.
It reminds me of selling real estate in the 1970s. Yes, I am that old. I started in real estate when I was five, LOL. With seller financing — and I was a huge proponent of seller financing / creative financing back then — I often sold homes for a mere 7% down. Because that amount covered the seller’s closing costs and commission. Sellers carried owner financing for the balance. I can even see those days coming back.
Why There Are No Open Houses Over Major Holidays in Sacramento
If you’ve been wondering why there are no open houses over major holidays in Sacramento, you must be a seller. I never get this question from home buyers in Sacramento. And maybe part of it is because I tell sellers I will hold open their home every Sunday until it sells, except for major holidays. They don’t hear the “except for major holidays” part. They hear only: oh, goodie, every Sunday until it sells. Because agents work all of the time, right?
Yes, it does seem like we work all of the time, but we don’t work over periods when buyers don’t come to open houses. The reason there are no open houses over major holidays is because when a person has time off of work, rarely does a person want to do more work. It is work to go house hunting. Most people choose a different activity, perhaps spending time with friends or family, and / or traveling. That doesn’t mean we don’t show homes over major holidays because we do. We just do not attract large numbers of home buyers to an open house.
Throw into the equation the city of Sacramento. This is a city where the nicest thing many can say about it is it’s close to other things that are more exciting. Laugh as you may, I hear it all the time. Oh, we’re so close to the Bay Area, it’s only 90 minutes (the way the crow flies and hopefully you’re not in bumper-to-bumper traffic for 5 hours). Or, it’s so close to Lake Tahoe, only 90 minutes (see previous disclaimer). But there hundreds of places to go within a day drive of Sacramento, including other states. Sometimes it feels like half the population has left town over a major holiday.
Below are the 7 dates for no open houses over major holidays:
Easter
Memorial Day
Fourth of July
Labor Day
Thanksgiving
Christmas
New Year’s
That doesn’t mean you might not find a rogue agent sitting by himself at an open house somewhere hoping for business. But the bulk of listing agents in Sacramento are not holding open houses then. However, we still answer our phones and take care of business.
