I met with an East Sacramento seller yesterday who has a home he wants to sell. It's a 2 bedroom he bought a long time ago, and there is plenty of equity. I will put this on the market in a couple of weeks. Whenever I meet with sellers to talk about selling a home, especially a rarity such as a home with equity in Sacramento, I show them how others will look at their price.
Because it doesn't really matter what I think or what the sellers think or even what other agents think. Only 2 things matter. How the buyer views the home and how the buyer's appraiser views the home. And they both, unfortunately, tend to look at it differently. Especially in our ever-changing and wobbly Sacramento real estate market. That's why pricing a home is an art. Buyers compare homes to others available for sale, while appraisers compare homes to others that have sold in the last 3 months.
Appraisals are coming in low even though buyers are low-balling. That's a weird combination. Why would you get a low appraisal? Lots of reasons. There are often dual markets going on in the same neighborhood. As an East Sacramento agent, I can tell you that a home right across the street from another can sell for $100,000 more. If you don't work in that neighborhood and you're appraising it, you wouldn't know it.
I am happy that I'm focusing on listing homes in East Sacramento over representing buyers in East Sacramento. It's not because I don't like buyers; it's because many buyers in this market seem undirected, unfocused and misinformed, and I don't have the patience or time to deal with all of that. I prefer to focus on single agency with my sellers. I make a great listing agent, that's where my strengths lie. That's the secret to anybody's success -- focus on what you do well.
First time home buyers are unique. I've got to hand it to Sacramento's buyer's agents; it's difficult to manage buyer's expectations in today's market. You guys have a really tough job. I'd also like to nod my head in the direction of my own two fabulous agents: Barbara Dow and Linda Swanson. They have the patience level of saints. I am proud and honored to be associated with them. I can't believe somedays that they are willing to put up with me to be on my team.
Linda Swanson and Barbara Dow are talented, inspirational, witty and exude excellence on par. Between them, I bet they have more than 40 years of experience in the business, and they've never seen anything like the attitude of buyers in this market.
Buyer: How much is this home listed for?
Agent: $300,000, but the comparable sales around it are selling on average at $350,000.
Buyer: We would like to offer $125,000, please.
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Buyer: We would have to repaint this entire house. That will cost $20,000.
Agent: Average cost per room is about $50 for paint.
Buyer: Yeah, but we'd have to hire somebody, and that will cost $20,000.
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Buyer: We have cash. We heard cash is king. We'd like to buy a home for cash in East Sacramento.
Agent: How much cash do you have?
Buyer: We have saved $15,000 and saw a home on Trulia for $55,000.
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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.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
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The old cash is king routine. That last one cracked me up. Knowing the local market and it's rhythms are imperative to pricing a home correctly.
Elizabeth - Although I gripe, along with my fellow agents, about appraisers here in So Cal it sounds like you have it much tougher up there. My listing that I have is exactly as you explain. The sellers think their equity sale home is the best so why would a buyer not like and purchase their home?
Mr and Mrs. seller it is not that they don't want to buy your home for the value you seek it is that the property needs to appraise. And if your home does not have true comparables to reflect what you want for your home then I am sorry but you are caught up in the market. The market speaks.
I am finding that sellers are being pretty reasonable, it's the buyers who are out of whack. They follow no rules, no guidelines, nothing makes sense, they pluck numbers from thin air, it's almost as though we're negotiating with the mindset of two-year-olds. Many would not recognize a good deal if it snuck up and bit 'em on the butt, yet they'll yammer nonsensically about linear objects with 3D right in front of them.
Elizabeth - Loved your buyer examples; they'll have me cracking up for awhile. So glad that most of my borrowers are not like that. So many of my borrowers are just so glad that they can finally afford to be able to buy something better than what they are renting for. Being in the same market as Ken above, around here, it's the sellers that seem to be out of whack.
Elizabeth! Have you been talking to my buyers? It sure sounds like it. Your examples hit way too close to home. Buyers who pick an offering price out of outer space or some other dark place are way too common.
Some of today's buyers would bite off their nose to spite their face. In fact, I've seen them do it so I know that they do.
Elizabeth - Your story here reminds me of one of those old postcards that were titled, "Your House As Seen By. . ."
Excellent graphics, Myrl. Problem is nobody thinks they are real. Those people aren't in real estate.