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Elizabeth Weintraub
Sacramento Sellers Who Sell a Home Twice
Words a Sacramento home seller never wants to hear — and no, it’s not anything like we need to catch the Chihuahuas, but runs close — are: the buyer needs to cancel escrow. Especially at the last minute, when contingencies have been removed and everybody expects the loan to close. Part of the shock is the seller has already in her mind mentally closed escrow. She’s generally moved on and is just waiting for the check.
It’s jarring news to find out the buyer can’t close. It means a seller must sell a home twice. And why can’t the buyer close? Because the buyer can’t get the stinkin’ loan. The first thing sellers question when this happens is what about the preapproval letter? They believed the lender who said the buyer was qualified to buy a home, and I don’t blame sellers for feeling misled. Mortgage lenders don’t guarantee preapproval letters. But there’s more to it than that.
Sometimes, you don’t know that one of the parties has a lien filed against that person until the preliminary title report discloses a judgment. If there are two people buying the home, the lender generally removes one of those persons from title and proceeds with the remaining individual, providing the remaining individual has enough income to qualify.
Which reminds me, a teacher yesterday in Redding wrote and asked what piece of advice I would give first-time home buyers today. That piece of advice is: don’t buy a home for which you must rely on two incomes to meet the mortgage payment — because people split up, get divorced, become sick, die or lose jobs. Things don’t always stay the way they are.
That’s good advice for anybody to follow. But the really important thing I tell sellers is if the buyer does not qualify at the end and needs to cancel the escrow it could actually be a good thing! When I say this they look at me like I’m dense, this goofy, overly optimistic agent. However, it could mean that the seller will put her home back on the market and sell it for more money, perhaps even to a buyer with cash.
That’s exactly how it generally works out, too. It can be a good thing if the buyer cancels. And because I’ve closed over the years hundreds of short sales in Sacramento, this Sacramento real estate agent has unparalleled experience in selling a home twice.
Question Home Equity by Marilyn vos Savant
I grew up with the expression: Question Authority, but as the billboards around Sacramento seem to imply, today’s message is more along the lines of Question Everything. It’s not that people don’t always tell the truth; it’s much more complicated. In part, it’s whose perception of truth is the truth, and it’s also human error, among other things. The human error doesn’t always originate at the source. Let’s not even start talking about FOX News.
For example, when I enter a listing into MLS, I am not the person typing the data entry. An error could happen at that level. Ultimately, I am responsible for checking the contents of my listings; however, I also send the link for a new listing to my sellers so they can double check the information as well. You can never have too many eyes on a document to verify information.
However, I noticed this weekend an entry in the Ask Marilyn column by Marilyn vos Savant, whose claim to fame is a high IQ. It asked how co-owners of a home worth $200,000 with $10,000 in equity must divide the asset. Ms. vos Savant went into great depth explaining loan balances and various options available should an unpaid loan balance be higher or lower than market value, but she ignored the equity position entirely.
The fact is if a person has $10,000 in equity and a home is worth $200,000, that means the encumbrances are $190,000. It’s simple math. The equity is already computed and disclosed. The discussion should have been centered around how to divide the $10,000 of equity: $5,000 for you, $5,000 for me. If you want the house, you’ll give me $5,000. If I want it, I’ll you $5,000. If we plan to sell to a third party, we don’t have enough equity to pay a commission, so we’re hosed.
Which just goes to show that there are times you can’t even trust the words in front of your eyes. Something was missing in that column.
Increase in Number of Elk Grove Homes for Sale
While talking with a client yesterday in Elk Grove, the strategy for pricing came up in the conversation. The client suggested that I must have a certain way that I advise sellers to pick a price for their home. Although I sell an awful lot of homes in Elk Grove — enough to put me on the radar of companies trying to sell buyer leads to top producers — my strategy is not the same for every home. That’s one of the things that sets me apart from other Elk Grove agents.
I take into consideration the temperature of the marketplace and blend that with the seller’s goals to develop a unique home pricing and marketing strategy for that particular home. It’s also what keeps real estate so completely fascinating for me. If every real estate transaction was identical, I’d most likely not have lasted in the business all these decades.
Not to mention, the fall market in Sacramento is different than the spring market of 2013. Springtime in Sacramento was wild and crazy, coupled with limited inventory. Now, interest rates are inching toward 5% and inventory has more than doubled. The demand is still strong, especially among entry-level homes, but the strategy is different to sell. The light green columns above indicates number of homes for sale in 95624, 95757 and 95758.
Sellers can’t be as demanding as they might like. Homes need to be priced right. A seller must prepare a home for sale. She can’t leave dirty dishes in the sink, floors cluttered and expect to quickly sell. Yet, it is still a seller’s market. Just not as strong as spring.
The Elizabeth Weintraub Team has a couple more homes coming on the market in Elk Grove. Watch for these gems and act quickly if you’re looking to buy a home in Elk Grove. Our sellers don’t need two dozen offers. They simply want that one qualified buyer who loves the home. Is it you?
Chart: Trendgraphix
Fighting HUD in an FHA Short Sale
It’s sort of surprising in a way but many home buyers in Sacramento do not know what kind of loan they have, especially after a few years pass since closing. From their point of view, it doesn’t matter. They still owe all of that money for decades. Whether their loan was FHA or conventional or VA, who cares? But it makes a difference if the seller needs to do a short sale. The rules are very different.
Whenever this Sacramento real estate agent approaches a short sale, the very first thing I do is figure out the seller’s type of loan. If the loan is FHA, for example, there is no requirement to submit an offer with the FHA short sale request. That doesn’t mean a seller might not want to submit an offer, as there are reasons for it, providing the buyer is willing to wait, but it’s not a requirement and, in some situations, it can be a much easier process without an offer.
We had a short sale recently that could not close. It was the first short sale in a long, long time that had been rejected without hope of any further action. Ordinarily, I do not give up; I continue the fight and, if the bank says no, I reconfigure the short sale package and resubmit. Eventually, the banks say yes. But when HUD says no, it means no. To protest would mean fighting the department of Housing and Urban Development.
One can request a variance and build a very strong case. But after that case is presented, it’s sort of like getting an opinion from Superior Court. One could appeal but an agent can’t do it. It takes a lawyer to do it at that level.
Sometimes, clients forget that Sacramento real estate agents are not lawyers. We might seem that way, but we do not have a law degree, we cannot give legal advice, and we cannot practice law, even if our shoes are nicer.
In this particular situation, even though the home was not habitable, HUD rejected a variance request. This was a round peg trying to fit into a square hole. Apparently, there is nothing in HUD guidelines that deal with homes that are uninhabitable. Because the bottom line is when you’ve got Lily Tomlin in her telephone operator role running HUD, the answer tends to be no, especially when they can’t figure it out.
Selling Sacramento Real Estate Without Internet
While this Sacramento real estate agent was on vacation in Alaska with limited Internet access, two real estate transactions blew up at closing — which is a rarity but seems to be more common lately. These would have blown up even if I was in Sacramento. Pending sales blowing up appears to be due to a mix of buyer remorse, uncertainty and severe underwriting guidelines. Fortunately, I was able to put both of these homes back into escrow almost immediately and at better terms, even from thousands of miles away.
I also sold another home in Elk Grove while I was cruising the Inside Passage. We had just left Skagway that evening and headed back to Juneau, a long stretch without Internet. I had anticipated this difficulty before I left, which is why my team members and assistant were on alert, jumping in to help answer questions and monitor listing activity. On top of that, I had set up my iPad as a Hotspot so if we did find cellphone coverage, I could receive wireless coverage through my laptop computer.
The only problem with the iPad is I should have named my iPad something other than Elizabeth Weintraub’s iPad. Like, maybe, Breaking Bad. Although we had only 35 travelers onboard the Alaskan Dream, many of them asked about it because it showed up in their wireless connections as a connectivity port. It kind of made me feel like the only rock pigeon dangling a slice of bread from my mouth, surrounded by starving, pecking pigeons.
My Hotspot only worked though if I was near a cellphone tower. As a backup, I also left my cellphone plugged in and turned to silent. That’s because I use two different cellphone carriers, so whichever was strongest would pick up the signal.
Sure enough, around 1 AM, while I was sound asleep, we cruised into Juneau to get diesel before continuing on to Glacier Bay. See, this is how I sell Sacramento real estate in my sleep. My husband set the alarm on his cellphone to wake me up. Eureka. Internet. I quickly uploaded the offer I had received to DocuSign, cc’d my assistant to send the executed offer on to the buyer’s agent, and crawled back into bed. Of course, it was hard going back to sleep with my brain on fire.
