Selling to Home Buyers In Sacramento in a Sellers Market?
Believe it or not, that house that you live in or are considering buying, is much more than a home. It is a critical piece in a residential market that is dependant on the other houses surrounding it for its value. All of the houses in every neighborhood are dependant upon one another for the health of that specific real estate market to thrive.
Real estate is also a business that is dependent on buyers and sellers to turn the inventory and spur new investment and rejuvenate older neighborhoods to remain vibrant contributors for all kinds of critical services that would otherwise not exist.
Healthy real estate markets are created and maintained with a balance of new and existing housing sales that allow sellers and buyers to easily move from one housing situation to another. Some families need to upgrade and expand while others need to downsize. Regardless of that dynamic, it all happens with the opportunity to buy and sell and none of it occurs outside of a vibrant real estate market.
So Who Are the Buyers in Sacramento?
Every town and city in California has buyers that are qualified, ready and committed to buy a house. Finding them has always been the challenge. Up and until about 10 years ago, if you needed to sell a house, regardless of the condition, the conventional wisdom was to hire a real estate agent and pay a commission to get your house sold. That traditional type of retail sale succeeded roughly 61% of the time.
You hired a real estate agent. They planted a sign in the front yard, they did some marketing, they held open houses and in about 3 to 6 months you got an offer that was acceptable and the house was placed in escrow waiting for the lender to appraise and approve the loan. I say it worked 61% percent of the time because for 39% – 40% of the homeowners that tried to sell using an agent, had a major problem. Their listing agreement expired before there was an offer that was accepted. It is one of the best kept secrets in real estate and why I say that real estate agents have horrible closing rates.
That part of the real estate market has not changed very much at all. Hiring a real estate agent still only nets results roughly 61% of the time.
Wouldn’t it be great if you could just call a real estate agent and they had a list of all of the buyers that are pre-qualified for a loan at every single price point and you could pay them to send them an email today? Now that might be worth a 6% commission. I wish it worked that way but buyers are a bit more stealth and are not always prone to giving up all of their data and privacy right away and certainly not to one master buyers database. So for the time being if you want to sell your house with a real estate agent you are going to have to continue to do it the old fashioned way. Wait and Pray.
So while the failure rate in real estate has always been pretty high, the difference is that today we get to talk about it because real estate agents no longer have a monopoly on that data so the numbers are no longer buried and today we are openly discussing them. As a result, these properties that are coming off market are doing so for several reasons.
- The location of the house matters (that house next to the 7-11 is always going to be a tough sale)
- No amount of marketing in the world is going to mask years of neglect or deferred maintenance
- residential real estate sales is one size fits all by design
- Pristine Properties are Cherry picked by top Agents
- Real Estate Agents dont take into consideration the condition of the house
So, in looking at the real numbers it’s more than a coincidence that the 40% failure rate is also the same 40% of cash home purchases made by real estate investors or cash home buyers. You heard that right, the properties that typically fell by the wayside as expired listings are showing up as Sold to cash home buyers and that means that Sellers dont have to wait six months anymore to have a viable sales option. Real Estate Investors have hit the main stream and it doesn’t look like were going anywhere soon.
So, can we dispel the myth that just hiring a real estate agent and planting a for sale sign in the front yard guarantees that you will attract the right buyers or that you will sell your house. Remember, for sale signs are just advertisements and cannot be seen by a buyer unless the buyers is right in front of your house. Even so, for about 40% of the houses the condition of the house matters and price is just one issue.
The Power of the Real Estate Agent is Strength in Numbers
Real estate agents come with a lot more horsepower than I am giving them credit for. They are a group, and as such they are connected through a very large network and by a very powerful database known as the Multiple Listing Service. In the old days, that database and the sheer numbers of real estate agents meant that no matter which one listed the property another could show it and ultimately the buyers could make an offer on it. But that database is no longer exclusive and what used to be a monopoly is available on any smartphone or tablet to any buyer.
In today’s world there is still no solution for that 40% of the market that fell by the wayside. That is of course, until the crash of 2008. It is interesting to note that nearly 40% of all houses sold are purchased with cash and the majority of those buyers are real estate investors.
That is no longer the case and in just 10 years everything in residential real estate has changed. Buyers who used to be at the mercy of real estate agents are now in the driver’s seat, at least when it comes to shopping for houses online. The numbers bear that out and according to the data and the research, 90% of all home sales today, begin online and without the help of a real estate agent. Would be homebuyers are now starting to look before they even get loan approvals and the online tools provided by Redfin.com, Realtor.com, Zillow.com show every house that is currently on the MLS. Buyers can look from the comfort of their own homes and research school information, local parks and even crime rates. The conventional wisdom of today is that buyers have access to the same information as the real estate agents and so as a cornerstone, real estate agents are becoming less and less relevant.
To combat that, real estate agents are developing custom marketing plans tailored for you and your house and using the Internet. Holding more open houses with wine and cheese???? Blah, Blah, Blah, Blah, BLAH. Yes that is laced with a bit of sarcasm and skepticism because 39% is a huge number of houses that are not sold once under contract with a listing agreement.
Maybe someone should tell all homeowners that want to sell their houses that listing agreements are not contracts to sell a house. They are commission agreements that guarantee a real estate agent gets paid if and when your house sells. With that said, it is the marketing, the pricing, the condition of your house, its location, the school district, crime rates and the financing that is going to end up being the reason that your house does not sell. As a seller what is the one thing that you think will cause your house NOT to sell?
If you own a home and are thinking about selling to home buyers in Sacramento, you have a number of selling options available to you. Today we’ll look at the 2 Big ways and break them down to help you determine which way is best for you.
For most people, buying or selling a home is the largest single transaction of their lives. It also follows that what people remember about buying their house was a process was that grueling and brings back memories of a lot of anxiety, waiting and finally if they got approval a little exhilaration and a lot of stress. Between the banks demands and the number of houses that were shown, most people would rather shop for a car. It is understandable given the magnitude of the purchase and the impact on the family.
So what most people walk away with is the feeling that the process of buying a home or selling a home can be very complex. It is that way for the sellers as they are subject to the same nail biting and anxiety at each step of the approval process.
For me the Buying is always easier and less complex than the selling.
Motivation of selling.
Motivation of Buying.
My name is Peter Westbrook and I am a real estate investor in Sacramento, Stockton and Modesto. I find that the buying and selling a house are just two sides of the same coin and that it is more of finding that sweet spot where the buyer and seller can agree on a price and terms and that leads us to the common denominator. The actual House.
Here is the real story and the breakdown of why it gets so complicated. Each house is unique based on its age, condition and location. Every house has its advantages and disadvantages based on so many factors and the desires of the individual buyers. Let’s face it for some buyers big yards are nirvana and for others they are too much work. Some want open floor plans and other love the charm of older houses that are compartmentalized. Large kitchens for the chefs and small galleys for those that like to eat out. You name it the combinations are exhaustive. Now add the condition of the house to the equation and things start to get a bit more interesting, because with every new factor the process requires another level of examination.
I know that on the surface, the statement sounds like an oversimplification, but the truth of the matter is that most real estate sales and transactions get more and more complicated with every new person we add to the transaction and the approval process. It is at each of these access points that real estate sales are at the greatest risk of falling apart. I know for a fact that the simplest of all real estate sales are when you have the buyer and the seller and the title company. No Banks, No Appraisals, No Inspections and No Contingencies whatsoever.
Over the years, there really have been just three home-selling options to allow homeowners like you to sell to home buyers in Sacramento. As you think about selling your home, you need to decide which way to sell is best for you, given your financial goals and timeline to sell.
Home-Selling Method #1: Sell with the Help of A Real Estate Agent
This is the traditional way to sell your home, so it’s also the most common. In this home-selling method, the homeowner chooses a real estate agent who will list the house.
The agent acts as a “middleman,” showing prospective home buyers in Sacramento through your house until one of those buyers decides to buy. They’ll make an offer, the agent will negotiate on your behalf, and then you’ll close.
The timeline on this selling method can take months (the average is 3-6 months). Sellers who choose this method prefer to gamble on the timeline to do less work (the agent does the work) and with the hopes of selling at the market price. However, sellers who use this method will often need to spend money up-front to repair their house first, and then spend money after the sale on agent fees and commissions.
Home-Selling Method #2: Sell it On Your Own
Selling your house on your own is nothing new. It has gained in popularity over the past several years because it is a great way to save money on at least on side of the real estate agent agent commissions. The process is very similar to selling with an agent but it’s done by the homeowner themselves, and not by a real estate agent.
The homeowner lists their house, shows it to prospective buyers, negotiates with the buyer or buyers agent, and closes the deal.
There are a lot of similarities – the timeline is usually the same and the homeowner will still have to pay up-front for repairs on their house to make it get it to marketable condition. Sellers who choose this method don’t mind the extra work involved in showing their house; they usually choose this method to save money on commissions.
Home-Selling Method #3: Sell Direct To CASH Home Buyer In Sacramento
This method of selling is gaining popularity as homeowners look for a third way to sell. This process is very different – it’s it’s simple, faster, uncomplicated, and doesn’t cost the homeowner anything (so it’s not surprising that this method is going mainstream).
Rather than listing and showing the house or negotiating at every new threshold, there are three steps and the homeowner simply sells their house direct to a cash home buyer in Sacramento for cash. It’s really simple. We’ll buy your house ai is in its current condition, without inspections, appraisals and any contingencies. No bank approvals and no delays caused by a lender that may want repairs. You deal with the buyer directly that is ready to buy the house as-is right now.
It’s faster – the buyer already has money and is ready to buy. The Seller has no unmet expectations. There is no expense or effort to repair the house before it’s sold; and it doesn’t cost the homeowner anything – professional home buyers (like what we do here at Westbrook REI) usually pay closing costs and fees.