Inventory (the number of homes for sale) is very low right now in the Sacramento home market. Trendgraphix reports show 5,251 homes on the market in February of 2009. In October of 2007, we had 10,320 homes for sale. By comparison, in October of 2005, we had more inventory -- 6,860 homes for sale -- than we do now.
So what's for sale in Sacramento? Here are some of the types of listings buyers will find:
- Foreclosures -- these are bank-owned homes. Most of these are sold "as is" and receive multiple offers.
- Short Sales -- these prices are fabricated. Some will close, some won't.
- Regular Sellers -- some are still overpriced. These make up a small fraction of the market.
- Probate Sales -- some heirs still believe the market is hot, and they, too, want to sell "as is."
- Relocation -- many relocation companies will pay for repairs, but these are likely to attract multiple offers.
- Flippers -- this is the newest wrinkle in the marketplace. And it's not going away.
Beware of flippers. A flipper is a home purchased by an investor on the courthouse steps at a trustee's sale. Investors want to turn around and sell these homes at market value. While it is unimportant how much an investor pays because everybody is entitled to make a profit, what is important is whether the investor will negotiate, and whether the investor will make repairs. Many refuse.
The drawbacks to buying a flipper are there are no warranties and no disclosures, same as buying a foreclosure. But more important is how long the investor has owned the property. If it's less than 90 days, a buyer will not be able to obtain a conventional loan from traditional sources. There are a few lenders who deal in conventional products, but it will cost more to get such a loan. FHA lenders won't lend at all during the first 90 days of ownership.
Because of this, some investors are not recording the trustee's deed, which means an agent can't find out if the home has been recently transferred. I now have to pull title history to determine if a Notice of Default has been filed to find out if the home is a flipper. I found such a home yesterday. By all appearances, it seemed to be for sale by the seller, but it was really for sale by a flipper who had not recorded the deed. When I confronted the listing agent, he confirmed it. I asked the buyers if they wanted to pay more for their loan to buy this home, but they declined. Buyers have a right to know.
On the other hand, I have buyers closing escrow early next month on a flipper. (Fortunately, this flipper has owned the home for beyond the 90 day seasoning requirement.) These buyers were able to buy this home for 3% less than market and list price, plus the seller is paying all of the buyer's closing costs. You can catch these buyers' story on FOX NEWS 40 tonight (March 23) at 10 PM. Yeah, I'll be on the show, too. :)
The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.
Photo: Elizabeth Weintraub
---
Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
