Before you write an offer on a home in Sacramento, the very first thing your buyer's agent should do is look to the tax rolls for ownership and deed transfer information. If it's a company, Google that name, because the owner might appear to be a bank but that company might be in the business of buying up homes at trustee's auctions and not a bank at all.
If the entity that acquired title is not the entity that foreclosed, the buyer may face a struggle in finding a lender, due to the 90-day seasoning requirement by FHA and conventional lenders.
Savvy investors are buying Sacramento foreclosures at trustee's auctions and receiving title via a trustee's deed, some at 50% or more discounts from market value. I have a buyer who looked at homes in Land Park this weekend and now wants to buy such a home. The trouble is coming up with a price that is high enough to satisfy the investor's demands and low enough to make sense in this market. Using comparable sales is not the best way to determine this price.
I am employing a strategy that I used with a buyer who bought a flipper home in Woodlake last week. If you're thinking about buying a flipper home in Sacramento, you might want to ask your buyer's agent to gather the same data before picking your price. Knowledge is power, and there's no reason to stumble in the dark without it.
Here is how to choose an offer price on that flipper:
- Get the name of the owner from the tax records.
- Run a search of the tax records with this owner's name to find out how many other properties the investor owns. Very few investors buy only one home at a trustee's auction.
- Look up those homes in MLS to see if any are for sale by searching on the address name. They may be temporarily off the market. Each home on the market represents cash paid for a home that is not yet returning a single dollar to the investor.
- Pull up the last 18- to 24-months of production for the listing agent. Investors tend to pick one agent to move inventory.
- Check the tax records to see if the sellers of that agent's listings was your investor. You may find that agent doesn't sell any other property than the investor's and may even be related to the investor.
Armed with this information, put together a spreadsheet of all those properties that include the:
- Date purchased
- Trustee's deed price
- Date sold (to determine the DOM)
- Sold price
Then calculate the percentage of profit in each sale. Using this percentage, you can then apply it to the price the investor paid and come up with a price at which you and the investor may eventually settle upon. Then offer less and start negotiating.
Investors like to buy auction homes in stable communities such as Land Park or Midtown because there is a high demand for these homes. If you're looking for a home in the Land Park or Midtown area, call your area specialist, Elizabeth Weintraub at 916.233.6759.
The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.
Photo: Elizabeth Weintraub, Tudor home in Land Park, Sacramento
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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.
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.
Elizabeth
Good things for a guy like me to know. I still get a great feeling everytime I see your smile.
Sincerely
Tom Braatz
A direction I had not thought of. Thanks so much for sharing you analysis technique. I'm sure it will help several agents. Thanks.
Well, I know it's a little complicated for some to figure out, but this strategy really works. It gives one a complete picture of the seller, and one can draw conclusions from that information. I hope you (Tom and Terry) find this very useful.
Elizabeth - I continue to be amazed at the number of new developments and concerns in our industry which pop up each day! Are we having fun yet - or what:-)
Elizabeth,
Very good information. I got something to learn, and thanks for that. Sometimes i think that I am not up to something new, or a good surprise, and so often I am wrong
Hi Myrl: I believe that agents need to continually find ways to improve service. There is no such thing as doing something the same way over and over when technology and a little bit of brainwork lets one discover better methods.
Hi Jon: Like you, I try to learn something new every day. Especially for us veteran agents, we shouldn't shut off our minds to new opportunities.
Hi Elizabeth,
Great advice. I am wondering how to get the owner name from the tax records. I thought Sac County public website does not provide this information. Is it information available only to realtors? Thanks.
Hi Edward:
You can get this information online from the Assessor's office; however, you will need to have the APN number (parcel number). Or you can call the Assessor's office at 916.875-0700, give them the address and get the owner's name. You can also go to the County Assessor's office in person to search the public records from 9 AM to 4 PM, Monday through Friday. The Sacramento County Assessor's office is located at 3701 Power Inn Boulevard, Suite 3000, Sacramento.
It is much easier to just call a real estate agent, though.