Sacramento Real Estate Views

Offer Clause of the Moment

Increased Investor Presence in the Coming Year

I work with many all cash investors in the Sacramento real estate market.  My feeling is there is going to be more investor activity in our area this year than we’ve seen in many years.

Here’s why:

1.  The inventory will be increasing this year over last year.

2.  This will depress values more than they have been depressed already.

3.  That said, the perception from various economic sources is that we are well within 20% of the bottom of the market.  This is when smart money comes out of the woodwork.  (I’m seeing this in my business currently)

4.  Not so smart money will be “waiting for the bottom” before they purchase.  This won’t decrease the competition, just extend it for a longer period of time.  By the time not so smart money finds out that the bottom has come, it will be gone.  The media generally reports real estate info 90 days late.

The Ebay Approach to Getting Your Offer Accepted

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Tags: foreclosed homes, Sacramento homes

Sacramento Foreclosed Homes

What Can $60,000 Buy in Sacramento?

I got a call from a fellow who lives in San Diego, he just graduated from the State college there and wants to purchase a home in the Sacramento area.  His funds are limited but he’s paying all cash for the home.  He wants to spend no more than $60K.  So what kind of home can you get for $60K in the Sacramento region?

First thing I needed to let him know was that the homes in this price range can be in seemingly “dubious” areas of the region.  He is a very level headed guy, thinks that if the market goes down much further it won’t effect his long term goal and doesn’t think we’ll see prices like this in the area for some time to come if ever again.  I can’t sell a home, in this scenario, unless I feel that the decision is based on solid and basic home buying fundamentals.  Especially to someone who isn’t an investor.

I searched the entire Sacramento County area and came up with 71 homes that were listed at $50K or lower.  He has $60K to work with but I wanted to leave room for new carpet, paint and cosmetic fixing if need be and funds for closing costs.  I cut the 71 homes into about 10 due to time constraints and we went out a looked.

The Common Theme

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Tags: foreclosed homes, homes in sacramento

Paying Too Much at Auction for Sacramento Homes?

I’m working with an investor right now who was telling me a story about a friend of his who has a big team of people working to help him purchase homes at auction in south Sacramento.  My investor heard him boasting about getting a beat up Sacramento home for $100K.

For my client, we acquired two homes.  One for $77K with $1200 in pest work and about $5K in updating and another at $100K completely pest clear with new carpet, newer HVAC and ready to rent to the highest bidder right now.  Positive cash flow immediately.

What’s he doing wrong?  He is under the impression, like a lot of people are, that buying a home at auction is always the cheaper way to go when buying foreclosed homes in Sacramento.  While this can sometimes be the case, often times it will cost you more money than if you were working with someone working for you.

3 Reasons Why Buying at Auction is Risky

Buying a home at an auction is the riskiest way to purchase a foreclosure for the following reasons:

1.  You may not be able to inspect the home prior to purchasing.

2. You may have to come up with the money to purchase in hours rather than having a few days to get the money together.

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Tags: bank owned homes, foreclosed homes, foreclosures, homes in sacramento, real estate auctions, Sacramento homes, sacramento real estate

A Sign of the Times

I’ve made a change in my career over the last week.  I’ve left my position at Pulte Homes, Inc. to go back into the resale side of the market with the #1 REO team in the Sacramento region.  I’m working with REO Deal Makers at ReMax Gold.

This change will be a good thing for my career as it will expose me to another side of this business that, frankly, I had pushed away.  I realized that learning this side of the business is an essential for any Realtor looking for continued success.  There was always something that didn’t feel right about “capitalizing on someone else’s misfortune” and that thought or perception, kept me away until this week when I began my new position.

The day I gave my notice I began getting calls from potential buyers which stands out because I had told no one that I was quitting my position and starting a new one.  I hadn’t given it any of my attention, it just happened.  One of those potential buyers is a great lady I had worked with about 2 years ago named Joyce.  Joyce is from Modesto but has relocated to the Roseville area to pursue a love interest.  She is about as saavy as they come in so far as investors are concerned.  She has done more with less than anyone I know.  This is one of the benefits of educated risk taking.

Today, we went out looking at bank owned properties.  This is my first excursion into that market and, I’ll tell you, it was an eye opening.  I found myself oddly affected by entering these homes knowing that someone had been forced to leave for financial reasons.  The conditions I saw were startling.  A couple homes we saw were in good enough areas but were just trashed inside.  These were newer homes all built within the last 10 years and some were in just terrible condition while others were in better but still tough condition.  The minimum repair bill was about $8K.  That said, all penciled out as profitable in the standard investment scenario.

I found myself fighting back a little emotion after visiting our second property.  I’m sensitive to the point of being sappy sometimes.   Joyce, however, was gleeful.  All a part of experience I guess.  There was a lot of opportunity in what we saw.  I understood how she felt.

What occurred to me was this:  As a Realtor, my business is neighborhoods and communities.  I feel a responsibility as a Realtor to do everything in my power to get these homes sold to families or persons who will take care of them and act responsibly to make these neighborhoods, now blighted with properties that are unmaintained and unsightly, better than they were before.  We’ve got to make it a priority for the sake of our communities to get our region past this crisis and act responsibly in the neighborhoods in which we work.

Naive? Probably but it motivates me and makes what I do for a living worth it. Cheesy?  Sometimes that description definitely applies! Sincere? Always!

Interested in a great deal on a home?  We’ve got plenty of choices in our market at the moment.  If you’d like to make it happen, give me a call.

Tags: foreclosed homes, foreclosures in sacramento, Sacramento real estate market