Achieving the Dream of Home Ownership is a Struggle for Many Young Couples

By
Real Estate Agent with RE/MAX Gold DRE #00697006

first-time home buyersDon't let anybody fool you; it's hard for some first-time home buyers to buy their first home. It's not as easy as some people make it sound. Oh, sure, sometimes buyers can get lucky and score a home right away -- especially if location and condition aren't that important, but the odds are it will take a while in Sacramento in the $200,000 - $250,000 market.

I am working with a wonderful young couple right now who have just submitted their 10th offer on a home in Sacramento. These are delightful people whom I will call Doug and Shereen, to protect their privacy. I initially had met them several years ago, when they first started saving money to buy a home, setting their sights on the spring of 2008 to move.

But they have a big ol' jumbo pile of challenges facing them:

  • Declining market
  • Sea of under-priced short sales and foreclosures
  • Need to use Nehemiah
  • Want desirable locations
  • Buying at the hottest price point in the market place

Doug and Shereen are sincere, dedicated, loyal and one of the sweetest and kindest people I know. They're the type who instinctively make me want to move heaven and earth to find them that home, regardless of how long it takes. With that, though, comes feeling their pain and frustration. I watch their eyes light up when they find a suitable home. Then, they make an offer, and I can hear the wheels in their heads spinning as they make mental notes: where they will put their one living room sofa and which wall will accommodate the TV. It's heart breaking to see those dreams shattered when offer after offer is lost in the war of multple offers. They lose out to investors with all cash or conventional buyers with big down payments.

As for the positives, Doug and Shereen are trying to stay within their means. They

  • Are wise enough to realize they won't win by lowballing.
  • Are making fast offers on homes well below their preapproval price point because they don't want to over-extend themselves.  
  • Are rational, logical and emotionally stable individuals who have planned for their long-term future.
  • Have established and excellent credit with high FICO scores.
  • Are willing to invest sweat equity.

Friday, we were told that the home on which they made their 10th offer had four offers. Two were outright rejected by the bank. This leaves them in a tie. We quickly increased the offer another $5,000, which is now 27% over the under-priced list price and still on par with comparable sales. If I could wave a magical real-estate wand, I would. It's tough for them to wait. During my 30-some years in this business, it's become relatively easy to focus on the client's end result and remove my feelings from these transactions, but in this particular situation, I admit that I am simply unable to do that.

elizabeth weintraub sacramento real estate agent

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Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

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 RE/MAX Gold. 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.

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Rainmaker
490,543
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Elizabeth;

You deserve a round of applause ---- here in San Diego, we are experiencing the challenge that you are experiencing with entry level buyers. The entry level market is selling-----and along with the multiple offers that they are receiving, we see the price creeping up in this price point.  What is disappointing is the buyers that you are working with that get their hopes up.

May 11, 2008 03:23 AM #1
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Hi Lorraine and Loretta: The entry-level market in Sacramento is mostly saturated with REOs and short sales. Banks are wising up, though, and pricing inventory way below market value, which then draws multiple offers. I tell my buyers not to place a lot of emphasis on the list price but instead look at how many offers the bank has received and pay close attention to the comparable sales. I also pull up the listing agent's last three month's of sold properties -- especially if that listing agent is an REO specialist. This typically will show patterns, including list-price to sales-price ratios, which gives me a pretty good idea just how high we need to go to get an acceptance.

The buyers who think they can "steal" a home and offer 20% less than the bank's asking price are those who continually lose out. But Doug and Shereen are offering way above list and still losing out to conventional buyers -- and they can't go any higher than their maximum comfort level, nor would I ask them to. If we changed any one of their parameters, they'd have an easier time of it, but they really can't change anything. I am confident, though, that their persistence will pay off. I gotta hand it to them. They're hanging in there, so they will eventually get a home. I hope that it's this 10th offer. I'm keeping my fingers crossed at this point.

Thanks for the note, and good luck in San Diego!

May 11, 2008 05:58 AM #2
Rainmaker
109,181
Jill Wente
Better Homes and Gardens Real Estate | Gary Greene - Spring, TX
Realtor, CRS, MCNE, CHMS

Elizabeth:

I love working with first time home buyers. Its so rewarding to see the excitement in their eyes and to know that you helped them achieve one of their dreams. Its also disappointing when you have to tell them they did not get for whatever reason the house of their dreams. You just hope that they can regroup and start looking again.

I hope your first time home buyers get a home soon.

May 12, 2008 02:09 AM #3
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Me, three, Jill. At least they are keeping their sense of humor about it, though. They asked if it would help if they perched themselves at a busy intersection holding up a hand-made cardboard sign that read: Will Work For House.

elizabeth weintraub sacramento real estate agent

May 12, 2008 02:42 AM #4
Ambassador
1,880,962
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Elizabeth, your story is amazing to me and I applaud your effort in working with the couple. Wow, ten offers. In our area, with the high affordability and the 50,000 homes listed they could be in a home tomorrow. What a difference an area of the country makes.

May 12, 2008 02:51 PM #5
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Hi Gary: All the homes these buyers want are either short sales or REOs because they are looking in a highly desirable neighborhood where homes sold for $400,000 several years ago. These properties are now listed in the low $200K's, so there is extreme demand. Plus, they are under-priced from the comparable sales. It's like going into combat to buy a home. I tell buyers to fasten their seat belts as it's going to be a bumpy ride.

May 13, 2008 02:43 AM #6
Rainer
101,891
Kay Perry
Kay Perry, Broker - College Station, TX

Ten offers...wow.  That would be a world record for me.  You have a lot of commitment to this couple.  They are lucky to have you as a realtor.

May 14, 2008 12:25 PM #7
Rainmaker
2,189,950
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Some buyers you instinctively go that extra mile for because they deserve your help. And gosh, this couple does. We are now on offer #11.

The listing agent of the last offer told me they were one of two offers that were not thrown out by the bank. Then, yesterday, she changed her tune to say it probably wasn't their offer at all that was being considered . . . she must have mixed me up with somebody else . . . but who knows what the bank might say . . . and what was her own name again?

elizabeth weintraub sacramento real estate agent

May 14, 2008 03:12 PM #8
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Rainmaker
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