multiple offer tips
Weintraub & Wallace took a new East Sacramento listing last week in a very popular area of East Sacramento. We worked tirelessly preparing our pre-launch efforts. Friday evening, it went live in MLS with the first open house scheduled this last Sunday. There were about 70 people through the open house!
There were plenty of buyers through with solid interest looking to make one of many multiple offers on a new East Sacramento listing. Additionally, we had about 20 + agent showing appointments over the last 3 days. Buyers had seen it online, advertised on our Facebook Boost or any one of the other search engines such as Elizabethweintraub.com, Zillow, Trulia, Redfin, Metrolist, REMAX.com and many others.
Given our strong seller’s market in Sacramento, many home buyers today are finding themselves closing escrow but not being able to move into their new homes due to the free seller rent backs. Part of the reason for the free seller rent backs is to induce the seller to accept an offer over another offer without the holdover possession. It’s also because many sellers are not moving up. At least not in my listing inventories.
Sellers are either a) a successor trustee or trustee of a trust; b) moving out of the area; c) selling an investment rental or d) buying a brand new home. They are not coming to me and asking to sell their home so they can buy a bigger, nicer home in a different neighborhood, which would be a normal Sacramento real estate market. But these are not normal times. We need to remind ourselves that much of what is happening today is NOT NORMAL. We can’t get complacent.
Ordinarily, buyers are sometimes a bit timid about offering free seller rent backs. This is a new concept to many home buyers. They don’t understand why they can’t collect rent from the seller, nor do many feel the full impacts of the craziness in limited inventory neighborhoods, but it is a fact of Sacramento real estate today. Sellers expect it and buyers will agree or the seller will sell to somebody else. It’s that simple.
To protect all of the parties, though, we do ask for signatures on a Seller in Possession addendum. This legal document was prepared by C.A.R. lawyers to protect all sides and state who is to continue paying for things such as utilities.
Three of my recent closings involve free seller rent backs. One was for 45 days. Another 3 weeks, and yet another a couple of weeks. In the last transaction, the seller was worried. Now I could understand a buyer’s reluctance, but a seller exhibiting hesitance was unusual. Why, I asked, would you fret over the free rent back when you’ve already closed escrow? Not to mention, you have your big ol’ pile of money, and you get to stay put until you’re ready to go. Doesn’t this exhibit peace of mind for you?
Because what if I broke something, the seller responded. Hmmm . . . you’ve lived in the property for 7 years, have you broken anything yet? No, but I might. OK, good point, let’s discuss.
But for everybody else, it’s a super great deal for sellers, even if buyers have to wait a little.
Dear Sacramento Buyer’s Agent:
Thank you for showing my listing and asking about how the seller will handle offers with a Sunday Open House on the horizon. Oh, and thank you for sharing your buyer is fully qualified through The Internet Lender. I would be remiss if I didn’t share my opinion of The Internet Lender. It doesn’t necessarily mean your buyer is qualified. We’ve all had transactions with internet lenders fall apart because the monkey, excuse me, I meant monkeyfied mortgage loan officer, did not take the time to thoroughly scrutinize the loan application.
Further, these types of internet lenders often end up with out-of-area, and by that definition, non-qualified, appraisers. We all know where the rabbit hole that leads, but I’ll spell it out. Low appraisals. Unhappy sellers. Kicked out into the street buyers. Your buyer might get an edge if she were to get qualified with a local lender, which tends to carry a lot more weight with experienced listing agents and their sellers than an internet company. This is just a suggestion, not a requirement. Unless it is, and we’re just not telling you.
We also expect to receive multiple offers, so a list price offer probably won’t get her the house. We are holding the home open on Sunday, and there is no guarantee the seller will take an offer before the open house, although I will send an offer immediately upon receipt. You never know, the seller might take it. Then again, maybe not. I may advise against it.
My suggestion is you write the offer as though it is already Sunday afternoon, and we’ve held the Sunday Open House. You may want to advise your buyer to put her best foot forward in that offer because she might not get a second chance. There is no guarantee a seller will consider a counter offer. Much of the time in these situations, I see sellers just take the best offer. On page 9 for acceptance of offer, you might give us until after the Sunday Open House for a decision . . . so your offer doesn’t expire, of course.
Moreover, the home is sold AS IS. Although we are not aware of anything wrong with it, you and I both know a home inspection will reveal a bunch of defects. Please be advised the seller will not issue a credit, renegotiate the sales price nor make repairs. It is best if the buyer is prepared in advance to accept the fact there might be a few things he or she will need to later on fix. That is an ongoing fact of life, btw, whether it’s a house or yourself.