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Warning: Sacramento Short Sale / REO Buyers, Don't Hire Cousin Louie

By Elizabeth Weintraub Sacramento Broker

Real Estate Agent with Elizabeth Anne Weintraub, Broker DRE #00697006

January 23, 2009 01:46 AM

Sacramento's real estate market -- Is it a buyer's market or a seller's market? -- a client asked yesterday. The answer is, for those buying short sales and foreclosures, it's a buyer's market behaving like a seller's market. That's because inventory is low, which is one of the signs of a seller's market. On the other hand, prices have declined, which is one of the signs of a buyer's market.

Sales are rising, which is a sign of a seller's market. But the homes that are selling are mostly foreclosures and short sales, which is a sign of a buyer's market. Are you with me so far?

Throw into the mix low interest rates in the range of 4.5% to 5.5%, and you've got a lot of buyers vying for the same inventory, which results in multiple offers, especially when that inventory is superficially priced way below comparable sales.

Every deal is different. Depending on the circumstances -- which can vary from the bank wanting only the highest and best offer to banks who want to see every offer or only those offers within a specific time frame, to agents who sandbag offers to agents who try to double-end their own transactions, to clueless agents, clueless sellers and clueless buyers, the combination possibilities are too many for me to type this morning -- trying to buy a home is like entering a war zone.

A home buyer's best defense is to hire a knowledgeable agent with REO / short sale experience. This is not the time to hire your Cousin Louie to help you out.

Hiring Cousin Louie is like throwing a live mouse into a snake pit. Sacramento home buyers -- if you find yourselves writing offer after offer and all those offers are rejected, I can almost guarantee you that you're not working with an experienced short sale / reo buyer's agent. It might be time for a change.

I wonder about this because when my buyer's offers are accepted, it often means that 12 or so competing buyer's offers were rejected. That's a dozen home buyers and investors who are told no. Where do those buyers go? Who ends up helping them buy a home or do they simply give up?

The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you in February.

Photo: Big Stock Photo

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Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

Elizabeth: It is certainly not time for family or friendship guilt to run a buyer's deicison making. Full-time, experienced professionals are the ones a buyer needs right now....at least...if they want a house. If they just want practice signing offers, go for Cousin Louie.

Jan 23, 2009 02:06 AM

Colleen Fischesser Northwest Property Shop

NextHome Experience - Chelan, WA

A Tradition of Trust in the Pacific NW since 1990!

"Every deal is different." Wow, if that isn't the understatement of the century....now more than EVERY every deal is different and sometimes unprecedented! Buyers would be very wise to take your advice and avoid Cousin Louie unless he has a proven track record.

Jan 23, 2009 03:01 AM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

I just have to add one thing to your great post Elizabeth, if a homeowner is trying to short sale and avoid foreclosure I think they should list with you and not Cousin Louie as well. It can hurt sellers in this market to have a unexperienced agent too.

Jan 23, 2009 04:10 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

Hi Chris Ann: Buyers think they can find a home, ponder buying it for several weeks, talk to everybody in their family about it, and then write a lowball offer. I want to say, "You aren't shopping for shoes at Macy's." LOL.

Hi Colleen: I haven't had an identical transaction for years. There are similarities in all of them, but just trying to head off at the pass things that can go wrong takes up a huge chunk of my time these days. I imagine it's the same for you, too.

Hi Tammy: Well, those short sale sellers and buyers don't have to call me; I'm in the enviable position of having a never-ending supply of business lately, but they should find an experienced Sacramento short sale / reo agent if they truly want to buy or sell in this market and not rely on a relative who churns one or two deals a year.

Jan 23, 2009 04:23 AM

Kevin O'Shea

Coldwell Banker - White Plains, NY

White Plains, NY Real Estate

But aunt Sally (Uncle Louie's wife needs a new dining room set.

All the best!

Jan 23, 2009 09:09 AM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

Elizabeth - "You aren't shopping for shoes at Macy's." What a great line, can I use your line with the ding dongs who ask me why they should use me (or any f/t, licensed mortgage professional for that matter) instead of Cousin Louie who owns a restaurant but does loans on the side and said he would give them a discount if they used him. Although, I must say that there can be more to the issue of getting offer after offer rejected than simply working with an inexperienced Realtor.

I have a client who is the epitome of the perpetual lowballer. He's about to lose his second Realtor because of his foolishness. Both Realtors are experience and professional Realtors (I personally know both) but after dealing with my client for awhile and his obstinant attitude (he simply refuses to offer full price on an REO), they become so frustrated with him, they simply refuse to work with him anymore.

Oddly enough, I've never had a problem with him. You would think with someone like that, he would try and nickel and dime me to death on his loan costs/fees but he never has (so far) and he's always nice and polite as well. Hmmm?

Jan 23, 2009 11:30 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

No Cousin Louie's for real estate HIRE ELIZABETH!!!

Jan 23, 2009 01:24 PM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

Hi Kevin: I don't know if they realize it. :)

Hi Donne: Sure, go ahead and use it. And then refer him elsewhere. Life is too short to work with buyers who aren't serious and don't listen to you.

Hi Gary: Actually, I have a family of buyers now who have relatives with a real estate license, but they came to me because they were tired of not getting their offers accepted. I got them a short sale and an REO, which both will close within a week of each other. The bank-owned home was negotiated within a 48-hour period: multiple offers, counter offers and the executed contract was delivered. They don't know how it happened so quickly, LOL.