pricing a home
Home sellers in Sacramento often ask me how much is my home worth when that’s not really what they want to know. They want to know how much will their home sell for, and that could be two very different numbers. On the other hand, they might want to know if they can do a short sale, in which case the answer is always, without fail: the price will be market value, based on comparable sales, providing the seller qualifies.
It’s not the sellers’ fault. Sacramento real estate can be a big confusing can o’ worms. I imagine sellers hear all kinds of crap from neighbors, coworkers, relatives and others whom, even though they might have actually sold a home or two, haven’t worked with an agent who works the way the one in front of you does.
People think it’s OK to hit up an agent for a sales price. Why do they think it? Because real estate agents have encouraged them to behave in that manner. Why else, we think, would anybody ever want to talk to us unless it’s to find out how much their home is worth — its market value? We’ll give them a free Comparative Market Analysis. Free, because it’s not worth anything.
Before I was licensed, I dismissed agents from the possibility of listing my home because they lowballed me on market value. At least that’s what I thought. Because I didn’t really understand how market value is determined. You can’t just give an agent your address and expect that person to name an accurate number. Maybe a range. Not a precise sales price.
I wouldn’t even give my next-door neighbor a sales price without completing an in-depth analysis of his features and studying the past 3 months of sales as they pertain to his home, and I live next door to him. I also sell hundreds of homes. I should know, right? Because I am a Sacramento real estate agent, I keep pretty close tabs on what my own home is worth, but I couldn’t give you an exact number on my house — even if you stuck burning toothpicks under my fingernails and sang horrible 1980’s songs out loud — without an analysis.
Agents who do might short change. I’m not one of those.
Of my four closings yesterday, two of those homes were regular transactions and not short sales. I hope this is a trend that continues. Fewer short sales, more equity sales. Because for the past 7 years, most of my business in the Sacramento four-county area has been short sales. That’s why they call me a Sacramento short sale agent. But before short sales, I enjoyed a long career selling regular homes. People tend to forget about that. But I don’t because my job is to help sellers sell their home, regardless of what it is.
One of those closings was a home in Roseville. It was owned by a spunky 82-year-old woman whom everybody adored. I mean everybody: the title company, the escrow officer, the buyer, the buyer’s agent, and especially me. This woman is incredible. Funny, sweet and smart. I could not believe that her family dumped her at the last minute. The home was hers alone, but a while ago her family members decided to join her in title. I’m not sure exactly why but I’m betting they felt she had equity, and they wanted a piece of it. When she told them she was interested in selling, they convinced her that she would have to do a short sale. If she was to short sale, they wanted to bail because they did not want to participate in a short sale. No money to them and nothing but a hassle.
See, the thing is a short sale lender will want everybody to participate in the short sale process, even if the parties are not on the mortgage. If they are on title, they need to fill out all of the paperwork, just like the mortgagors, and apply for the short sale. This seller’s family members were so sure she had to sell as a short sale that they deeded the home back to her and recorded that deed! I always check out title before I take a listing. Three decades ago I used to work at First American Title. This seller definitely had clear title to the home. A home with equity!
She was also very shocked when I told her she did not have to do a short sale. She had plenty of equity. This Roseville seller had enough equity to sell her home for top dollar, pay a commission, all of her closing costs and back taxes, and still have a lot of money leftover. Do you know how good that feels as a real estate agent to share with a seller that kind of good news? Or, as a seller to hear it? To find out that instead of a short sale, you can protect your credit and stash, say, $20,000 in the bank. When you’re on a fixed income, $20,000 could be a year’s income or more.
It beats the alternative. I had to inform a Land Park seller last year that her Land Park home had slipped into short sale territory and that she needed to sell as a short sale. We tried to sell as an equity sale but it hadn’t been working. She exploded to the point that I had to cancel the listing. Just blew up at me. I always try to tell people the hard truth but not everybody can handle an agent who is direct. Some prefer agents who sugar-coat, beat around the bush, and that’s not me. Eventually, that Land Park seller put her home back on the market as a short sale with another agent. That was too bad. Because I would have done a good job for her. You can trust that I will always try to do what is best for the seller.
But before jumping to the conclusion that your home is underwater, you should ask a real estate agent for her opinion of value. You might be pleasantly surprised. Some of us do a bang-up job at pricing a home and figuring out market value.