Why Did That Sacramento Home Sell for Less?
The question arose at my midtown office this week about whether all offers are presented to the seller when it seems a Sacramento home sells for less. The reason the caller questioned whether it happened is because the final sales price was so much less than the caller’s purchase offer. This buyer could not fathom any other reason why a home would sell for less than the price this buyer offered for it; therefore, this buyer concluded that there must be have been monkey business going on. It’s amusing that when a buyer doesn’t understand, the accusing finger is automatically lobbed toward the Sacramento real estate agent. It’s also sad because it tells you what some buyers really think about us but are afraid to voice.
First, all offers are always presented to the seller. I don’t know how other listing agents handle their processing, but I immediately forward offers when I receive them, and I imagine other agents follow suit. Offers are logged in my records 3 different ways to mitigate mistakes. Whether the seller reads, acknowledges or accepts which offer in which order is up to the seller. I don’t care if you write an offer on a roll of toilet paper and deliver that roll to my office, that roll of toilet paper will end up in the seller’s hands. You can offer $1.00 and write it with a bloody finger, and that offer goes to the seller. Not that I’m giving anybody any suggestions, mind you. Just making a point.
But I get asked the sell-for-less question so often that I thought it’s probably a good idea to explain some of the reasons how it can happen that an offer for more money is not accepted in favor of an offer for less. There are legitimate, behind-the-scenes reasons:
- The seller has taken a personal shine to the buyer, regardless of price.
- The offer was originally for more but the appraisal came in less.
- The offer was originally higher but the buyer negotiated a price reduction based on yada-yada.
- The home was vandalized and the seller adjusted the sales price to allow for the damage.
- The higher offer was written incorrectly and was missing pertinent documents.
- The previous offer was pending rescission and that original buyer elected to move forward.
You will notice that nowhere in those reasons is a line item that says the listing agent did not send your purchase offer to the seller. More often than not, it is the last reason, especially in a short sale situation, that is the actual reason why the home sold for less. Whenever I am faced with a buyer whose agent tells me is planning to cancel, I will put that home back on the market, with a pending rescission modifier.
I’ve had several of those lately. One last year comes to mind quite clearly because that particular buyer had been in escrow on a short sale in Elk Grove for almost a year. Why so long? It was a Bank of America HAFA, that’s why. When the buyer’s agent told me the buyer wanted to cancel, I put the home on the market at the pre-approved HAFA price, which was about $20,000 higher than the price the buyer had offered and the bank had accepted. I immediately received a handful of full-price and all-cash offers. I gave the buyer one more chance not to cancel. I explained that if the buyer wanted to cancel, he was a fool. Because a bunch of other buyers were waiting in the wings to step right into his shoes and pay $20,000 more.
That buyer saw the light and closed escrow. Sometimes, a listing agent has to show them the light. If often happens this way. Happened that way last week, too, on several transactions. Buyers tend to want what others want. A home can sit in escrow for weeks without any offers as an active listing before it turns into a pending sale, but as soon as “pending rescission” is added to the modifier, the offers roll in like crazy. If there is an existing offer pending on a listing, priority goes to that buyer. Another buyer could offer a bazillion dollars and a Lear jet, and the seller couldn’t sell to that buyer.
If you want to know why your offer wasn’t accepted for a home that may sell for less than your offer, ask your agent.