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Elizabeth Weintraub
Should You Notify the Bank Your Home is For Sale?
Should you notify the bank your home is for sale when you’re selling as a short sale? Clients sometimes confuse my role as a Sacramento real estate agent with that of a lawyer. I have fiduciary with my clients and am their advocate 100%, no doubt about it, but I can’t give them legal advice — even if I know the answer. Because even if I know what seems like a reasonable answer, if it’s a legal answer, it might not be the best answer, and it certainly doesn’t take into consideration all of the finer nuances of law much less the client’s particular individual situation. On top of that, believe it or not, I don’t have a license to practice law.
So, I freely tell clients that if I so much as address what seems like a solution to their dilemma, they should get legal advice and not rely on any of those words that may or may not fall by accident from my lips.
The question I get asked a lot is whether a client should notify the bank that his or her home is for sale. First, think about all the things that can go wrong in the world of business and commerce. How often do you make a request that is carried out in the manner in which it was requested? Probably not very often. Second, consider the fact that if you’re behind in your payments, for example, the department that has mostly likely been assigned the task to get that payment is the collection department. The collection department might be located in a different building, perhaps a different city than the department that escrow or your Sacramento real estate agent would speak with.
These two departments rarely speak to each other or even communicate with each other. They post notes in a computerized file sometimes, but that would take a person capable of accessing the correct file on top of actually reading it to decipher. That’s probably not gonna happen, I mean, let’s get real.
The collection department, if a seller is delinquent, wants the seller to make a payment. The collection department is not likely to say, “Oh, why didn’t you tell me your home was for sale? We’ll just slink away and leave you in peace.” They are like a horse racing at Santa Anita. They just want to get to the finish line, and that’s the focus, to get a payment out of the seller. There is no other focus. There is no human element of caring and compassion.
Why do people want to think that banks are compassionate? Where do they get this idea?
If I stopped making my mortgage payments, I’d immediately change my phone number. I’d notify the bank it’s not allowed to call me at work. In fact, I’d change all of my communication preferences to mail. Snail mail. Through the U.S. Post Office. But I’m not a seller who is delinquent. I’m just a Sacramento real estate agent who will say what the hey; it can’t hurt to call the bank and let an employee know. For all the good it will do. Yet, there is that 1% chance it might make a difference, so, go ahead and call. At least once.
Nationstar Bank Short Sale and Down Syndrome
I woke up this morning with a Nationstar short sale and Down Syndrome whirling around in my brain. I don’t know why. See, this is what being a Sacramento real estate agent does to you. I didn’t dream about Shameless — that Showtime series about my family when I was a kid. No, seriously, my father was not nearly as sweet nor endearing as William H. Macy’s character. Yet, I couldn’t help but wonder if that baby on Shameless with the Down Syndrome really has Down Syndrome. I don’t mean on the show; I mean in real life. Because that would be really tacky. The NDSS would be all over that.
Unless the baby could talk. Then, it might be a way to better understand those born with Down Syndrome, we could develop empathy and this would be considered acceptable. Except the kid can’t talk. But if the baby could talk, I bet he could speak more clearly and distinctly than a negotiator at Nationstar.
A kid at Nationstar told us yesterday that the bank will no longer let sellers pay for a natural hazard disclosure when selling as a short sale. They don’t want to see that crummy little $99 fee on the HUD anymore. Yes, they realize it is state law that a seller must give a copy of the natural hazard disclosure to the buyer. Yes, they realize it is also against state law for the seller to pay for a natural hazard disclosure out of the seller’s pocket because all fees must be paid through the short sale. California Civil Code 580e says the seller is not allowed to pay for anything.
So, on the one hand, you’ve got Section 1103 in the California Civil Code that says the natural hazard disclosure must be delivered to the buyer as part of the sale. On the other hand, the Civil Code says sellers can’t be required to contribute or the bank is breaking the law. And then you’ve got a group of managers at Nationstar Bank deciding it won’t allow the seller to pay this fee from the proceeds of sale.
I realize every $99 adds up. Hey, I sell real estate in Sacramento and not in Newport Beach or I’d be retired by now. But, really, Nationstar. My TC sent me a copy of the email from the negotiator who told us to read the California Civil Code again, although it still says the same thing it said the last time we read it. Nationstar might be making her go sit in the corner for lunch, but that’s not our M-O.
Here is part of that email: “There is nothing to check with my managers as they are the ones who told us to no longer accept the NHD on the HUD. Guidelines change all the time, you cannot expect things to always stay the same. Malyssa”
All over ninety-nine bucks.
Today, there are more than 400,000 individuals people with Down Syndrome living in the United States. I hope none of those people ever have to subject themselves to Nationstar.
Wells Fargo HAFA Short Sale Approved in 2 Weeks
The earth stood still for just a second last week after Wells Fargo approved a HAFA short sale for sellers in Elk Grove. We were expecting approval at earliest by the end of March but we instead received short sale approval on March 1. The usual 6 weeks that Wells Fargo typically takes to approve a HAFA had been shrunk to about 14 days. Completely incredible. I knew Wells Fargo could eventually shorten its timeframe for a HAFA short sale, and it has exceeded my expectations.
I listed this particular Elk Grove short sale in early February. We held off showings for at least a week to build momentum and pushed for multiple offers. From the half dozen offers, we chose the cleanest offer from the most qualified buyer and submitted it to Wells Fargo. Under Wells Fargo new guidelines, it has reduced tasks in Equator and now asks for limited documentation. We uploaded additional docs a week later and, 7 days from receipt, we were notified of approval for this Wells Fargo HAFA short sale.
The only little glitch is the bank set closing for 29 days from approval. This might not be enough time to get the buyer’s loan processed. Moreover, it’s difficult to find a rental that allows occupancy at the end of the month. Because Wells Fargo, like most short sale lenders, requires an arm’s length affidavit, the seller can’t rent back. But unlike some short sale lenders, oh, like Citi, for example, Wells Fargo doesn’t put up a big fight to issue an extension. Sometimes, getting a short sale extension from certain short sale lenders can be cause for handing over your first-born child. But not in a Wells Fargo short sale.
So, don’t believe all the crap you hear about short sales. I hear buyers say they wouldn’t touch a short sale if it was the only home for sale in Sacramento, and that’s not a fair attitude. If you choose a short sale listed by an agent who closes a lot of short sales and you get the right lender to work with, a short sale doesn’t have to be complicated or lengthy.
Wells Fargo gets 2 thumbs up from this Sacramento short sale agent. I’ll throw in a couple of toes, too.
Active Short Sale vs. Active Short Contingent Listings
My phone rings all day long with buyers wanting more information on homes in Sacramento, especially on short sales. The problem is half the time they are calling from listings on Zillow or Trulia that are not for sale. I can see that buyers sometimes think real estate agents are overlooking or hiding homes from them, and they find these secret homes on Zillow or Trulia and get all excited. I hate to say this but by the time a home shows up on Zillow or Trulia, it’s probably either sold or it was never for sale in the first place.
We live in an instant society and people want instant information. We have little to no patience. We want it and want it now. You can have it now if you’re looking on an agent’s website that pulls data directly from MetroList. Not the public MetroList, which delivers limited information, but the full-blown stuff you get from a Sacramento real estate agent.
Yet, there is one little tweak with MetroList that I keep hoping will get fixed because it’s pretty darned confusing for home buyers. That’s the Active Short Sale status modifier, which is bundled with the Active Short Contingent status modifier. Generally speaking, when a short sale is sold, a seller has choices when changing the status of that listing. The listing can be changed to:
- active short contingent
- pending short lender approval
- pending
As long as the listing is changed to one of the last two modifiers, it will reflect as pending in some manner in MLS. This means the seller does not want anymore offers. However, if it is changed to Active Short Contingent, it means the seller will consider back-up offers. A back-up offer does not mean a buyer gets to buy the home. The buyer will get the home only if the first buyer cancels.
But don’t you think a buyer would like to know if that short sale is really available for sale? I think so. Yet, a buyer can’t tell if the listing is available for sale or not unless a buyer knows the secret. The secret is to look at the listing (yes, you’ve got to click on it and open it up) at the very bottom right-hand corner. If you see “active short contingent” in that spot, it means you can only write a back-up offer.
Even though I explain this over and over to buyers, they can’t see it. So, I am writing this blog and including a self-imposed photo over an existing listing. I can’t show you the entire listing because the active short status at the top is a long ways from the active short contingent at the bottom, so I’ve just cut out the middle for you.
It’s tough enough to figure out the difference between active short sale and active short contingent, but the way MetroList reports it for you, you can’t even find it.
Paying More Than List Price to Buy a Home in Sacramento
When I was a kid and allowed into a grocery store with my parents, I used to beg them to let me play the fishing game. This was a contraption set up by the entrance in Applebaum’s, close to the mechanical horse, a machine with four walls of glass, filled with little toys. A fishing line with grabby-like tongs dangled over the toys, and for a nickel, you could try to grab one. Some were worth more than others. Generally, I failed, but it was fun to play because if I won, I got a toy that cost more than a nickel. The focus was on the hope of winning and not on how many nickels I lost.
Does paying more than list price to buy a home in Sacramento get your goat? Welcome to the club. I completely understand how that can bug you. To some people, it’s a totally foreign concept, and they might believe they are paying more than they have to to buy a home in Sacramento, yet I can assure they most likely are not. Because it probably comes down to a home buyer either offers over list price or a home buyer might not buy a home at all. If you think that’s discouraging, wait until I tell you that even if you offer more than list price, you probably still won’t get the home.
Why? Because the list price you offered most likely won’t be high enough or the competing buyer is utilizing better financing methods or cash. If often comes down to the numbers.
I recall a long time ago thumbing my nose at a property because the agent suggested I pay more than the seller was asking for the home. I thought she was nuts. I could not fathom forking out another $5,000 — even if it was rolled into the loan and the difference in my monthly payment was fifty bucks. As a result, I didn’t get the home. This is how most buyers learn that painful lesson. This practice still goes on in seller’s markets, and it will continue in your children’s children’s children’s seller’s markets.
Although all home buyers are ultimately responsible for choosing their own offer prices, a Sacramento real estate agent can guide and advise you. Listen to your real estate agent. If you don’t like or trust your real estate agent, hire a different agent, but don’t try to buy a home in Sacramento without a competent advocate by your side.
