As a big listing agent in Sacramento, I know first-hand it is common that the first offer often wins in Sacramento real estate. But buyer’s agents tend to disagree. Not sure why except that they are vested in having their buyers win, and perhaps they are not thinking through the entire situation. You hear it in their voices when they say, “Oh, maybe we’ll wait until after the open house.”
For what? For more buyers to submit offers? To become a speck of dust in the pile of offers? What are they waiting for? Offers, no offers, makes no difference.
Not only that, but sometimes agents sabotage their efforts from the get-go. A buyer’s agent called another listing agent recently to disclose that his client was part of a profession known for causing problems. Followed it up by asking about the cracks in the exterior stucco (all stucco has cracks), and making other comments that made the agent feel like this guy was gonna be a PITA. Not a smart move, you know, telling the listing agent you are a PITA and your client is a potential PITA, too.
If agents would just think through what happens, it would be easier for them to properly advise their clients. Be the first offer. The first offer often wins.
Say a home goes on the market on Friday with an open house scheduled for Sunday. Buyer tours on Friday and loves the house. But the buyer’s agent wants to wait to write an offer. I say no, write the offer right now. Write that offer although it is already Sunday afternoon and there are 2 other offers, because that could very well happen. Submit it now.
As a top listing agent, I am likely to advise my seller to wait until Sunday before making a decision. Because that is in my seller’s best interest. But the seller might love the offer and not want to wait. There is always that possibility. Odder things have happened.
However, if the seller takes my advice and waits, what do you think the seller will think when she wakes up on Saturday morning? She will second-guess her decision, wonder if she made the wrong call. Further, she will spend most of the day and the following day thinking about this wonderful and patient buyer, probably feeling a bit uneasy that she is making the buyer wait.
Come Sunday, even though there are several other offers, which buyer does the seller feel closest to?
Bingo. The first offer. Because the first offer often wins.
If you’re thinking about using a bad renegotiation strategy in Sacramento real estate, listing agents everywhere urge you to reconsider that tactic. That kind of game plan is hard enough to pull off in a normal real estate market, or even a buyer’s market. But our present market is a seller’s market in Sacramento. Apart from a bad renegotiation strategy being annoying as hell, it just doesn’t work. It backfires.
What am I talking about? The guys (mostly investors but not always) whose bad renegotiation strategy is to lock down a property and then try to lowball at the 11th hour. You wonder about this especially when the offer starts out low and then suddenly leapfrogs into the realm of possibility. That’s the first red flag. It makes me wonder what the buyer is possibly thinking by offering less than list price starting out. Dude, we generally get multiple offers, and if we don’t, we will if we wait.
You know, like, say, the listing is $700,000 for example, and the buyer submits an idiotic offer at $625,000. When you ask the buyer, what? Are you crazy? The sales price is $700,000, if you want it, pay $700,000. And the buyer immediately says OK, that’s a red flag.
Then, after a few weeks pass, after the inspections, which are all fairly minimal regarding findings, the buyer tosses a wrench into escrow. Usually it’s some stupid thing like the buyer wants to remodel. So the buyer submits an estimate for his remodeling costs and expects the seller to participate by funding those projects. That’s an insane proposition. It’s a bad renegotiation strategy.
Wahhhh, the buyer whines, why won’t you pay for my new pool?
I especially enjoy the buyers who tell their agents: What can it hurt to ask? Makes me want to wring their necks for not thinking. Just stop focusing on yourself and consider ramifications. It DOES hurt to ask. Big-time. It infuriates the seller. It makes the seller angry and unwilling to help the buyer do anything. When the seller says no, absolutely not, and don’t let the door hit you in the ass on the way out, the buyer moves on to his next victim.
Throw enough crap at the wall enough times, maybe something will stick, is the buyer’s rationale. What kind of reputable buyer’s agent wants to go through that agony? If a buyer’s intention all along is to try to finagle a lower price, that means the offer submitted was not a real offer. It probably breaches all of the good faith covenants in the contract. It’s a lousy way to try to buy real estate in Sacramento.
Buyer’s agents who ask is there any flexibility in the sales price are really asking the listing agent if the seller will take less. You might wonder who would ask this sort of question? Or, maybe, what kind of responses would they receive? All sorts of agents ask this question. They ask because sometimes listing agents in Sacramento do not stop to think. They get caught up in the moment, forget about their fiduciary relationship to the seller and, as such, they can commit one of the worst blunders a listing agent could ever do. They could lose their real estate license. Yet, they spill the beans. And let’s talk about spilling the beans.
For starters, a listing agent who delivers messages without authority is in a heap of trouble. Further, even if the agent knows the answer or thinks she knows the answer, she doesn’t. You know why? Because she’s not inside her sellers’ heads. Try as I might, I cannot crawl into a seller’s gooey brain. Oh, geez, now I’m imagining Dr. Thackery on The Knick poking that long needle into that addict’s brain on Season 2. Further, what a seller tells me one day might not be true the following day. Things change. Circumstances can dictate different answers in direct opposition to the facts one thought she knew 2 minutes ago.
I take nothing for granted. When a buyer’s agent asks me is there any flexibility in the sales price, I tell them I don’t know. I don’t know because like I said, I don’t really know. But I do know how to find out.
You know how you find out? You write a purchase offer. I deliver the purchase offer to my seller and my seller makes a decision. We may discuss pros, cons and other strategies, but I never tell anybody what to do. Not my house. Not my monkey. I may offer alternatives, but the seller has the final say in the matter.
Please don’t tell me the buyer is “in love with the house” but won’t pay list price. People who are in love move heaven and earth for their heart’s desire. If you want to make sure you can buy the house, you write the offer at list price. In today’s real estate market, sometimes even list price is not enough. If a buyer’s agent asks if I have any offers and I hear of an offer coming, I tell them I have been told I will receive an offer but I don’t have it yet. Moreover, if I counted every offer as received that an agent promised was on its way, I would own an island in French Polynesia.
Sometimes it sounds like an agent is pressing for an answer because, as you know, the agent don’t want to waste his time. Wha? That’s the name of the game; it’s the job, write offers and negotiate. You might win, you might lose. That’s how you sell Sacramento real estate. There are no guarantees that a seller will take any offer, much less yours. You want a guarantee? You buy a certificate of deposit. You want to buy a home, you negotiate. There is no answer to is there any flexibility in the sales price for that house until an offer is submitted. Period.
The one thing all Sacramento agents should try to avoid have happen with their buyer’s purchase offer is to give the seller’s agent and seller a reason to issue a counter offer. A few weeks ago, a seller had a counter offer out, and while we waited for the response, another buyer swooped in and submitted an offer that the seller accepted. After pulling the counter offer, of course. If one can avoid the counter-offer situation all together, a Sacramento agent can increase the odds her buyer won’t lose the house.
The Elizabeth Weintraub Team members realize this and we try to avoid counter offers at all costs. When my husband and I bought our house in Hawaii, for example, there was already a counter out. Our offer caused the seller to pull that counter, too. Buyers, don’t ever let the fact that there is an existing outstanding counter offer discourage you. Jump on that baby like hot fudge on a sundae.
Some Sacramento agents never call the listing agent before submitting an offer. Even in this market of low inventory and high demand, which makes this a seller’s market. They just shoot over an offer, thinking this is how they’ve always done it, but maybe that purchase offer contains things that need to be countered. Now they’ve set up their buyer for possible failure.
It’s not just the sales price a buyer needs to worry about. It’s not always the big things. Often, it’s the little things. Here are some of the small things that Sacramento agents can do to cause their buyers to lose the house by inadvertently forcing the seller to counter:
- Asking for personal property that is not included in the purchase price
- Bucking local custom on how fees are split
- Requesting government retrofits, i.e. water-saving devices
- Demanding to choose title and escrow
- Asking for longer than 30 days to close
- Not tightening contingency periods
Success is often buried in the details. In the fine print. And it is to a buyer’s advantage for her agent to find out if there are special things the seller might hope to see in the offer. Maybe the seller needs a few days to move or to rent back? Sacramento agents won’t know if they don’t call the listing agent. (Of course, that agent would have to answer her phone.)
If you’re looking for Sacramento agents who work to avoid counters for their buyers (and answer their phones), call Elizabeth Weintraub at 916.233.6759.
If a Sacramento Realtor in Natomas knows her neighborhood, she can often guess how quickly that home will sell. I have noticed that certain neighborhoods are taking their own shapes and directions now that the housing bubble has popped in Natomas, and I have gained a sense of why some homes in Natomas might take longer to sell or whether they will fly off the market. But even though I might know instinctively how a transaction will progress, it is still not an excuse not to be completely prepared for the market. As I continually say, half of the hard work is done in advance to listing a home.
For example, let’s talk about a home in Natomas that closed yesterday. These particular sellers called me around the middle of July to talk about selling a home, which was presently occupied by a tenant and managed by an excellent property manager I’ve done business with in the past. The thing about tenants is you never know which way it will go, they will either cooperate or they won’t. But when you are working with a top-notch property manager, the property management company will send the correct legal paperwork to the tenant to explain the process, and that often gets the tenant on board.
So does being nice to the tenant and making her beds. Hey, I do what I have to do. She left me a key under a pot in the back yard, which I promptly confiscated. All of the beds were a mess. She knew I would be taking photos, but you’ve got to remember that tenants don’t always care about the listing agent’s objectives when they are suddenly notified their lease won’t be renewed and, oh, btw, that means you have 30 days to find somewhere else to move. They have other pressing matters on their minds, like where their children will go to school and whether they will find another roof over their heads in our super tight rental market in Sacramento. I get it. Tenants don’t care what we agents have to do when selling rental homes in Sacramento.
Without grumbling, I made the beds. Picked up the house, straightened out the bathroom towels, put the load of laundry on the floor so I could shoot the cabinets in the laundry room. To get to this point, took me about a month. A month of work I don’t get paid for until it closes.
We went on the market August 21. I could write a book about how to sell a home in one day, even though it really takes a month or more. On August 22nd, we received a cash offer for less than list price. Why is it cash buyers tend to think their offer is stronger because it is cash? It can close faster, but it is not necessarily stronger. I’ve had transactions in which the cash buyers suddenly developed severe needs elsewhere for the cash and they canceled. I sent the offer to the seller and suggested they counter back at list price. Come on, 24 hours on the market and the buyer can’t offer list?
The buyer agreed to pay list price. This is what a seller gets with a full-service Realtor. We also made the sale AS IS. Those sellers who sometimes pass by the more experienced agents in favor of a discount agent who will charge less have no idea how much money they are losing in their transaction due to limited vision; they just don’t know any better. I made sure we had no drama in this transaction. We closed a month later. No repairs, no concessions, the tenant moved out of the home in Natomas on time. Happy sellers.