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Elizabeth Weintraub
What You Need to Know About The Short Sale Approval Letter
Bank of America broke out its Cooperative Short Sale program in California about 3 years ago. Since then, many short sale agents have taken advantage of the fact that they can get their sellers preapproved for the program prior to going on the market. Preapproved is probably not the right word, although, that’s pretty much what happens. Preapproved suggests that nothing can go wrong, and things can go wrong.
For example, a preapproved Cooperative Short Sale seller last year lost her chance to close on a short sale because Bank of America assigned the loan servicing in the middle of her short sale. The new lender did not participate in the cooperative short sale program, so she was denied. She was denied because under ordinary circumstances, this seller had too many assets and her disposable income was too high. There was no hardship.
Some sellers think that they when they receive the Buyer Acknowledgement of Interest that they will receive a short sale approval letter before submitting an offer, but that’s not how the program works. First a seller will receive the BAI, and then a valuation letter. The valuation letter assesses and predetermines the minimum approved listing price. If that price is reasonable, you’re in luck. If it’s not, you’re kinda hosed. Most of the time, though, unless the investor is Fannie Mae, that price is reasonable.
Then the home goes on the market at the preapproved sales price. Generally, the seller does not submit financials nor a hardship letter unless the investor specifically requests it after the offer has been submitted. The short sale approval letter arrives after Bank of America has approved the purchase offer and the buyer. The buyer is named in the short sale approval letter and generally another buyer cannot be substituted.
In California, a deficiency judgment is not permitted, and by agreeing to do the short sale, the bank waives any right to pursue a deficiency judgment. If the property is a personal residence, odds are the seller will qualify for relief from paying any taxes on the amount of the mortgage that was forgiven. Talk to your personal accountant and seek legal advice before starting a Cooperative Short Sale so you feel comfortable moving forward. Do not ask your Sacramento short sale agent for legal or tax advice.
The short sale approval letter will arrive somewhere between 10 days and 4 weeks after the offer is submitted to the bank. The letter will most likely give the seller 30 days to move, so a seller might want to start making plans to relocate when the home goes on the market, especially in our fast-moving Sacramento seller’s market. Sometimes extensions are granted but not always. Sometimes, instead of granting an extension, the bank makes the seller start over with the short sale and will order a new valuation, which could increase the value for the buyer, if the buyer elects to wait. It’s not a good idea to ask for an extension because it is risky.
Bank of America will also require that the seller have no preexisting relationship with the buyer. Can’t have done business with the buyer or know the buyer or be related to the buyer. Selling to a friend could be fraudulent if the bank doesn’t know about it. If the bank proves mortgage fraud, it could overturn the deficiency waiver, so it’s just not worth it to try to manipulate the stipulations. If you know a person whom you believe has committed mortgage fraud, you can notify the bank anonymously at 866.880.1232. There is no reason to gamble with your short sale.
If you’d like more information about a Cooperative Short Sale in the Sacramento metro area, call your Sacramento short sale agent, Elizabeth Weintraub, at 916.233.6759 for a confidential consultation by phone.
The One Tool a Sacramento Real Estate Agent Needs
Besides a charming personality, which certainly helps a Sacramento real estate agent to get along with people, the number one tool an agent needs is a cellphone. But it goes beyond that. You can’t just buy a cellphone and stay in business. To stay in the business, you’ve got to actually answer your phone. It sounds so simple, so easy to do that people might scoff at this and believe anybody can answer the phone, even a trained monkey can answer the phone, and they would be wrong. There are many real estate agents who don’t answer the phone.
I know this because when potential clients call this Sacramento real estate agent, the first thing they say is: “Am I talking to a real person?” or “I can’t believe I have a live person on the phone.” For that reason alone, I’m getting the business and not some other agent in Sacramento. I’d like to think that people are working with me because I’m witty, fun to be around, smart, I’ve got years of experience, and I care about them, but no. They work with me because I answer my darn phone.
Yesterday, I held 6 open houses in Sacramento. It’s hard enough to believe that I have six homes for sale in Sacramento that have not yet sold, but five of those have not been on the market for very long. It was National Open House Weekend. It was also Lyon Real Estate’s Extravaganza Sunday. Ordinarily, open houses do not sell houses but they don’t hurt the sale process, either. It’s good to let people know the inventory is there.
Two hours before an open house was scheduled to begin on a brand new listing that just hit the market on Friday, the agent called to say she was sick. Because she was so ill, she couldn’t hold open the house. My commitments conflicted with the Open and could not be changed, but I would be danged if I would let down a client to whom I promised the home would be open. None of my Elizabeth Weintraub Team members could do it because they already had open houses scheduled. If push came to shove, I decided, I would find a way to be in two places at once. But first, I called my back-up open house agents, those who are eager to meet and greet the public.
I called 21 real estate agents. Of those, 3 answered the phone. A fourth called me right back because she was with a client at another open house and could not answer her phone. Another returned the call a few hours later when she noticed that a person had hung up who had called her, and she wondered who it was. I left messages for four of them and not one returned my call. The 3 who answered the phone had other commitments themselves that afternoon, but I noted the fact that they answered their phone. If I’m ever in this pickle again, they are the agents I will call.
The fourth agent who was busy with a potential client is the agent who agreed to hold the home open. She finished her early open house just as mine was about to start. She rushed over and there were already people on the front porch waiting for her to open the door. I will call her again, too. She has all the marks of going far in this business. In my book, she’s my go-to open house agent. The one you can count on in an emergency. When you need something done, you call a busy person. When that busy person answers the phone, you’ve come to the right place.
If you’re looking for a Sacramento real estate agent, call Elizabeth Weintraub at 916 233 6759. I’m a busy agent who answers her phone.
Tips For Buying a New Car Are Useful When Buying a New House
My husband accused me of car shopping because I was reading the new Consumer Reports about new cars for 2013, but I was really comparing the marketing to the new homes of 2013 in Sacramento. I’m talking about buying a new home from a builder. Personally, I don’t sell very many brand new homes — I mostly handle resale — but one of my Elizabeth Weintraub team members, Linda Swanson, has more than a decade of experience in new home sales. She was once a new home sales manager, too. So, while she is out showing homes to buyers, if they run across a new home subdivision, she’s extremely qualified to go to bat for her buyer.
Caution: new home buyers! Don’t ever walk into a new home subdivision alone because, if you do, they will track you, get your name and number, and no other buyer’s agent anywhere in Sacramento will be allowed to represent you. You will be on your own. With the builder’s agents who are experienced and with training you do not possess. You should hire your own separate buyer’s agent.
Here are new car tips from Consumer Reports, which also apply to buying a brand new home in Sacramento:
1. Start Online: Absolutely, spend all the time you want in your comfy PJs, search naked if you want, just don’t forget and use FaceTime. Get a feel for the homes that have come on the market and the homes that have sold, the types of neighborhoods where you might want to live.
2. Take Test Drives: Go to open houses. Book a private tour of a few homes you might want to buy. Sit in the living room and imagine what it would be like to entertain guests, ditto at the kitchen table. Just don’t fall asleep in the bed.
3. Get Approved For Financing Early. You can’t go home shopping without the ticket to ride in your hand. You need that preapproval letter. It’s not to prove to your agent that you are qualified because your agent probably doesn’t give a tiddlywink about it. Your preapproval letter is for the builder and because every other buyer competing with you will have one. Don’t be the odd guy out or people will poke fun and laugh at you.
4. Find Your Old Car’s Trade-in Value. If you have a home to sell, interview a couple of agents and ask for a comparative market analysis. Just don’t choose the agent who gives you the highest price because you might never get that price. Choose the agent you trust. Don’t sleep with your agent, either. You may develop a close bond, but keep the relationship professional.
5. Get Price Quotes. Ask your buyer’s agent to give you the complete financial history of this home and competing homes around it. Knowledge is power. You need numbers. You need to know what other homes have sold for, how much homes are presently pending at (because they will be your future comps) and, in this seller’s market, don’t pay too much attention to the sold comps because most homes are higher in price now than they were last week. Just don’t ask your agent to write a lowball offer in a seller’s market or she might be tempted to smack ya.
6. Have Dealers Compete. You can go with your agent to different new home subdivisions and look at the inventory offered for sale from various builders. If you can find a similar home in a different neighborhood, you might be able to use that home as a comparison to the home you prefer to buy. Remember, though, that in a seller’s market, the builder is in the driver’s seat, and if the subdivision is not overbuilt, this strategy might not work.
7. Negotiate Everything Separately. New home builders often want to bundle services and offer you a package deal on the lot, the home itself, the upgrades for the home, the appliances, the furniture (in a model home) and the mortgage and homeowner’s insurance to boot. All of these things have separate price tags and buying them in a package does not mean you are getting a discount. It could mean you are paying a premium. Unless you just like to throw around money, then go for it. Throw some in my direction, too.
8. Skip the Add-Ons. If you really need those granite counters, put them in afterwards. Granite is cheap, cheap, cheap right now. If you want hardwood flooring, buy the floors and install them after closing. If you desire top-of-the-line appliances, work out a price with a wholesale dealer from a distributor and don’t buy these items from a builder. Because you’ll pay through the nose. And we have enough problems with our noses and spring pollen allergies around here.
9. Check the Math. Everybody makes mistakes because we are all human. But even machines can make a mistake because they are input with data from human beings. It’s easy for a line to be eliminated or a zero to show up in the wrong place. Just think about text messaging and auto correction on your cellphone. Have you never sent an inappropriate message before by mistake? Hey, it can happen in a purchase contract, too.
10. Finalize the Paperwork. Don’t move in before you close escrow. Don’t sign any blank documents if all of the information has not been completed. Use a reputable title and escrow company. Oftentimes, builders will send all of their escrows to a particular company because they have negotiated a whopping discount in exchange for volume. When a company is flooded with volume, sometimes service vanishes and integrity diminishes. Make sure your paperwork is completed correctly. You won’t know what most of the financial documents say, so make sure your name is spelled correctly and the property address is right. That will be half of your battle right there.
The other half will be moving.
If you’re thinking about buying a brand new home in the Sacramento area, please call Elizabeth Weintraub at 916 233 6759.
10 Easy Steps to the Best Deal, Money-saving tips from our car-buying pros, from Consumer Reports April 2013
Rare Mariemont Estates Home by Arden Park For Sale
This gracious home on Lantzy Court in Arden Park for sale is located near the end of a serene cul-de-sac and is more beautiful than words can convey. This is truly a home you need to see in person to fully appreciate. Surrounded by trees, the front yard features a circular driveway and striking red Tamukeyama. A two-rail, hand-sawn wood fence graces the edge near the street. It has tremendous curb appeal.
This home in Arden Park for sale has 3 to 4 bedrooms (the fourth has been used as an office), and 2 1/2 baths, one of which contains a jetted tub. You’ll find skylights, ample room sizes, two fireplaces, and plenty of storage space. According to the assessor’s office, the square footage is 2,672, and it’s a single-level ranch style, built on a slab with wheelchair access.
Everything is pretty much is in bloom right now in the back yard. The very back is sloped and terraced, featuring rows of flowers in a variety of colors — it’s a garden mecca. The lot size is enormous, almost 2/3rds of an acre at .63 acre or 27,443 square feet. Smack dab in the middle of the yard is a gigantic pool, solar heated, gunite construction.
But wait, there is more about this home in Arden Park for sale. In addition to all of this, there is a guest house in the back yard. The guest house can be used to care for aging-in-place inlaws or a place to send a person you might not want living in the same house as you. I can’t describe this type of person because federal Fair Housing disallows it, odd as some parts of that law can be. This house has a single bedroom, living / dining space, kitchen, bath and laundry room. The guest house was updated in 2012, says the seller.
For more information about this home in Arden Park fro sale or to find out when you might enjoy a private showing, please call the listing agent, Elizabeth Weintraub, at 916.233.6759, Lyon Real Estate.
4335 Lantzy Court, Sacramento, CA 95864 is offered exclusively by Lyon Real Estate at $875,000.
Buying and Selling a Sacramento Home at the Same Time
If this were a different type of real estate market in Sacramento right now, my advice would be completely different about buying a selling at the same time. The following advice applies only because this is a seller’s market in Sacramento. Sellers who want to move up or move down in a buyer’s market would have an easier time of it. What your agent might not tell you is trying to buy and sell a home in a seller’s market is almost impossible.
It doesn’t mean you can’t do engage in buying and selling simultaneously; however, it could be very difficult. The reason is we have very little inventory in our Sacramento metropolitan area. People try to equate this particular market of Spring 2013 to the Spring 2006 market, and they are not the same. Back then, in 2006, we had a lot of homes for sale.
This is what the numbers looked like in March of 2006 for all Sacramento counties combined:
- Active Listings (Homes for Sale): 6,488
- Pending Listings (Homes in Escrow): 1,479
- Sold Listings (Closed Home Sales): 1,425
Here are the numbers for March of 2013 for all Sacramento counties combined:
- Active Listings (Homes for Sale): 1,378
- Pending Listings (Homes in Escrow): 1,371
- Sold Listings (Closed Home Sales): 1,835
What is particular startling about these two comparisons is the fact that despite the fact that active listing inventory dropped by 78.8% — meaning we have 5,110 fewer homes on the market in 2013 than we did at this same time in 2006 — we sold 30% more. Moreover, national average interest rates were at 6.47% in March of 2006. Today, interest rates are unbelievable low. Yesterday, the rate offered by a major local mortgage broker was 3.5%. This is huge, and these facts are what is driving the market.
It’s why it’s to be buying and selling at the same time. As a seller, you are in the driver’s seat. As such, for some sellers, the only way to buy and sell at the same time is to sell and rent back for a few months. Because if you could ever in your lifetime make that kind of demand of a buyer for your home, now is the time to do it. Or, sell and move into temporary quarters. Or, sell and delay the closing for a few months. Because you really need to have the cash in hand to make an offer to buy.
Put on your other hat, your buyer’s hat. Now, you are probably one of 20 offers for the same house. Your offer is contingent on selling your home. It doesn’t matter if your home is already in escrow, it is still contingent. It is contingent until that puppy closes. And most sellers do not want to take a contingent offer, not when they see investors and home buyers waving cash in their faces or buying their home without a contingency on selling a home. Having a contingency to sell in your offer makes you unattractive to many sellers.
Having said that, I will say I have done it. But I do warn my sellers that if they want to buy a home and sell a home at the same time, they will have a much easier time of it if they have the cash and financial means to buy without selling. Or else, wait until their home is sold to buy another home. It doesn’t mean I won’t try to do both sales concurrently for them, but the odds are against that happening.
If you want to buy or sell a home in Sacramento and need a good Sacramento real estate agent, please call Elizabeth Weintraub at 916.233.6759. Put almost 40 years of experience to work for you.
