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Elizabeth Weintraub
Two Loans on a Sacramento Short Sale
One of the reasons I write a daily blog is to educate and share my real estate knowledge with other people, and I hope it’s entertaining along the way. My secret to being so successful at blogging is that I write about what I know; I don’t write about what I don’t know. I might not know how to keep a souffle from falling or a yogurt from curdling so I don’t write about cooking, but I do know how to negotiate and close a Sacramento short sale.
As such, I recognize those who do not. It’s like a secret club in Sacramento. Nobody wants to admit that they don’t really know much about short sales, but most agents rarely deal with a short sale. I wish they would just tell me they need help, and I’d gladly help them, but some of them don’t want anybody to know. It’s like a badge of shame or something, which is ridiculous. While I can understand that reluctance, they’re not doing anybody any favors.
For example, an agent who doesn’t know much about short sales might tell their buyer that the buyer should not write an offer on a short sale with two loans. The agent might erroneously believe that it won’t close or the odds are it will be more difficult, which isn’t necessarily true. Two loans on a short sale provide less excitement than, say, a Bank of America FHA short sale or certain lender’s HAFA short sales or even a Fannie Mae short sale. Sometimes the two loans are held by the same institution, in which case even if the second loan was hard money that loan is probably exempt from recourse in California, so the lenders are more likely to cooperate.
I just closed a short sale recently that had a loan for almost $500,000 and that bank accepted a $6,000 pay off from the first lender. Don’t let the fact that there are two loans on a short sale frighten you away. Of course, there is one exception that could cause difficulty, although I haven’t yet encountered it, but I see it out there on the horizon. That is when the first lender refuses to issue an approval until the second lender issues its approval, and the second lender refuses to issue its approval until the first lender issues its approval. Yeah, it’s a Catch 22, and I did not much care for the book, either. One bank eventually caves in.
The reason a first lender might not want to issue an approval letter is because of the new law that went into effect on January 1 of this year which says after an approval letter is issued, the lender must stop foreclosure: The Homeowner Bill of Rights. It’s the only way to stop dual tracking. But I have ways to work around it, so if you’re looking for an experienced Sacramento short sale agent, make sure you call an agent like me who has closed hundreds of short sales. Don’t draw the short straw when it comes to your very own short sale agent.
A guy told me yesterday he had been talking with his property management company about doing a short sale. The property management company admitted that it does not sell real estate, it only manages rentals, but offered to do the short sale for him. What? How insane is that? It’s bad enough to give your listing to an agent who doesn’t sell real estate, but give it to an agent who doesn’t do short sales? Why don’t you just cut off your head now and leave it rolling in the street?
Getting Married on Valentine’s Day
Candidates to be first-time homebuyers in Sacramento got married yesterday every 7 minutes. That’s more than 68 couples saying I do in an 8-hour period. Getting married on Valentine’s Day is kind of like being born on Christmas. You know, for the rest of your life, you’ll get fewer presents than you ordinarily would receive if the celebrations were clearly separate. But it is a way for some people to remember their anniversary. One guy actually admitted to the Sacramento Bee that getting married on Valentine’s Day now means the whole world will help him to remember the date because, as though this is an excuse, because he’s a guy.
It’s economical to get married at the County clerk’s office in Sacramento. A marriage license costs only $83. A couple could save that $5,000 to $50,000 they could plan to spend on a wedding and use it as a down payment to buy their first home. I say this as a person who got married during dim sum while our witnesses graciously picked up the lunch tab. I’m often amazed at the amount of money spent on full-blown affairs to get married, especially since this once-in-a-lifetime experience has a tendency to repeat itself, twice or more.
It’s not like you’ll ever get that money back if one of you decides I don’t down the road. Not like you’ll probably fare if you buy a home in Sacramento. At least buying a home nowadays is building equity. So, my advice is skip the big wedding and save your money to buy a home. If it doesn’t work out, sell the home, take the money and be happy about something else. Don’t try to buy each other out. I see far too many spouses who later refinance to come up with the money to pay off an ex, and then they run into trouble and can’t pay the mortgage. Refinanced loans are hard money in California. Just sayin’.
But a belated Happy Valentine’s Day, and Best Wishes to all those who got married yesterday. Getting married on Valentine’s Day is pretty romantic but you just lost yourself an extra gift on that day, you know. Just sayin’ . . .
Trust and Dual Agency in Real Estate
While I was at the doctor’s office yesterday getting a shingles vaccine, the nurse practioner asked what I was doing the rest of the day. This was only 10 in the morning. Well, putting a home into escrow and listing 2 homes, I replied. The earth didn’t stand still. No trays of medical instruments shattered to the floor. It was obvious to me that no real estate agents were in the doctor’s office yesterday or the next question would have been WHERE? Because inventory is a prized possession right now. If you’re a Sacramento listing agent, you’re suddenly everybody’s BFF.
More on that a minute. About the shingle’s vaccine, though, did you know almost everybody over the age of 60 is supposed to get it? And did you know it’s only one shot, one time; it doesn’t guarantee you won’t ever get shingles, plus it’s pretty expensive. My husband says it’s not as expensive as the stuff we got for malaria when we went to Ecuador but it’s expensive enough that insurance companies want your signature on a document that proves you received the vaccine. I guess they are concerned that some doctors’ offices submit false reports / claims about patients receiving the vaccine, so they try to verify that the patient actually got it. If they don’t trust doctors, whom do they trust?
Trust is a funny thing. Some people don’t trust anybody, no matter what. Take desperate buyers. I’m a little wary of them right now because some will go to any lengths to buy a home. Some buyers can be cluelessly insulting as well. They will call and beg me to represent them. They could be buyers with a real estate license telling me I can keep all of the commission, or they could be buyers dumping their agents in favor of working with the listing agent. They think they will get an edge because they believe all listing agents can be bought and manipulated. That kinda ticks me off on several levels, which I suspect throws them for a loop.
One guy yesterday tried to explain California real estate law to this California real estate broker. He rattled on and on about how it is completely legal for me to represent both the seller and the buyer. I won’t always do dual agency. There are some situations in which the line is so thin and finely drawn that dual agency could step over it. Plus, I’m way too busy to have to stop and calculate whether I am fairly representing both sides of the transaction. I just wanna represent the seller in some cases. Only have fiduciary to the seller. It keeps life simple. I like simple.
Buuuuut you’re giving away all of that money, people stutter. You would have thought I’m telling people the sky is green and the grass is blue. My integrity is not for sale. My ethics are not for sale. I don’t know why that’s so hard to understand. What they may see as stupid, I see as risk management and what’s best for my seller. Fiduciary carries weight with many agents, as it should.
As for my two new listings, one is in Curtis Park, and it’s a positively charming 1910 bungalow that is guaranteed to capture your heart. The other is in West Sacramento in the state streets and it’s updated, a three-bedroom, two-bath with hardwood floors. Call this Sacramento real estate agent for more information: 916.233.6759.
No Excuses Sacramento
If you think the real estate market is deplorable in Sacramento just remember, you could be stuck instead on that Carnival cruise ship that broke down in the Gulf of Mexico. Sewage spewing forth down the aisles. No electricity. Rubbing shoulders with 3,000 other people who haven’t bathed and are pooping into plastic baggies. I think that would be enough to make me want to swipe a life craft and jump overboard. Now, that would be desperate times. I wouldn’t even care if it involved a floating orangutan and bananas, I would not want to be aboard that disaster.
Unfortunately, no matter how bad the market gets, there will always be those people who justify their actions based on the extreme market conditions. At least that’s their excuse and they’re sticking to it. Reminds me of that movie clip my husband likes to recite from the Blues Brothers, with John Belushi explaining why it wasn’t his fault. You know: I ran out of gas I had a flat tire I didn’t have enough money for cab fare my tux didn’t come back from the cleaners an old friend came in from outta town someone stole my car there was an earthquake a terrible flood locusts it wasn’t my fault I swear to god except today agents blame their inexcusable behavior on the market conditions.
There is no excuse. If you’ve been less-than-honorable in your dealings with other people, you know it. Own it.
That’s not to say it’s OK. It’s not OK. The other side of the coin is that California mantra of Dude, I flaked. You don’t even have to be stoned when you say it. If you just hold out out your arm and bend your fingers into a gang symbol and wag that hand while sporting a pathetic look splashed on your face, you get your point across. But it’s still unacceptable. I don’t care what you did, missed dinner, late for an appointment, bit the dentist, ran over the neighbor’s dog.
I talked with a guy in Washington, D.C. last night who is having difficulty buying a home in Rancho Cordova. Like most buyers in Sacramento these days, times are tough. It’s worse than 2005. Much worse. He wanted to know what he could do to improve his chances of being able to buy a home. Well, the first thing you do is engage the services of a Sacramento real estate agent and don’t try to go it alone. You need somebody in your corner. A person with ethics, and a person who is willing to work hard for you.
Not excuses. Nobody needs excuses.
Why Multiple Offers Are Wrong
It’s not that I don’t trust people; it’s that people can’t always be trusted. Which isn’t necessarily the same thing. When you’re a Sacramento real estate agent like me — and been in the business since kids wore bellbottoms — you see enough to question what seems odd to you. People take that as mistrust, but it’s just enough usually to put my radar on alert. It’s the reason I was accepted into law school in my younger years. I am naturally inquisitive. The oddball in any equation is often suspect for a reason.
Sure enough, the offer that stood apart from all of the other offers this weekend for that home in Elk Grove did not make it past a 24-hour period. It’s not that the purchase offer crumbled and fell, it’s that it was most likely falsely presented in the first place. A statement in MLS informed buyer’s agents that all offers would be reviewed on a certain day at a certain time. This put buyers on notice that all offers would be given an equal opportunity for presentation. Therefore, by extension, a buyer who was not willing to wait for a response by that certain day should not submit an offer. To submit an offer without an intent to wait could very well invalidate the good faith covenant inherent in purchase contracts.
Whether a buyer realizes it or not, a buyer can make only one offer for a home in Sacramento. Some agents will tell buyers that they can make as many offers as they want and those agents would not only be wrong but they could be subject to discipline. If a buyer does not have the financial means to purchase every home a buyer writes an offer to buy, the offers are not real. There are laws that prohibit writing pretend offers. Buyers writing multiple offers they can’t afford to all buy is a big, huge, no-no. It’s also unprofessional, and fiduciary could be called into question as well because who would advise a buyer to break the law?
Yet, that did not stop an agent and Elk Grove buyers from writing more than one offer for a home in Elk Grove, offering as a lame excuse the buyers did not want to wait. This intent was undisclosed. This agent does not work for Lyon Real Estate, thank goodness. I can’t tell you which company but it wasn’t Lyon. I love working with Lyon real estate agents. I know they have been trained and they are supervised. Any little problems that could ever pop up are handled in a prompt and efficient manner. We have great management and communication among our agents at Lyon Real Estate. I can always trust a Lyon agent to do the job correctly.
When agents don’t respond after being informed their buyer’s offer has been accepted, that’s the first sign something is amiss. I didn’t hear from this buyer’s agent for more than 24 hours. A full 24 hours was also enough time to negotiate another offer. Of course, unknown to me, the agent could have dropped dead from a heart attack and been found lying splattered in the street somewhere, but that’s a long shot, don’t you think?
In any case, I have 3 very happy buyers this morning who have a renewed chance to buy a home in Elk Grove. If you read yesterday’s blog, 35 offers for a home in Elk Grove, you’ll see my gut said we should have countered all four offers. That was my suggestion. It’s not that I don’t trust people; it’s that some prove unworthy of trust. Being cautious is always wise in my playbook.
One deal is not worth a reputation. The shame is some agents never learn that lesson.
