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Elizabeth Weintraub
The CalHFA Short Sale and CalHFA Financing
We are fortunate in Sacramento to have a wealth of information at our fingertips by our sheer location as the state of California’s capital. There are also a lot of really excellent real estate agents in Sacramento whom this agent over the last 10 years has had the distinct pleasure of working with, as well as your usual run-of-the-mill whack jobs. We won’t talk about the latter because they don’t deserve chatter, except to acknowledge the occasional irritant will pop up in this business and it’s best to just step over them and get on with the business of buying and selling homes in Sacramento. Keep a positive attitude, that’s my motto!
One of the highlights of lending in Sacramento is the California Housing and Finance Agency, aka CalHFA. They assist first-time home buyers buy a home by securing a small second loan to the home. For a brief time last week CalHFA had pulled all funding and threw the homebuying market into a further panic. But then something happened and suddenly I received a notice that the funding was restored. Not that it will help buyers in most markets because those buyers are finding they are getting clobbered by the cash and conventional buyers.
There is another problem some homeowners in Sacramento are facing with CalHFA, though. The problem that arises is when a seller needs to do a short sale and discovers that CalHFA loan that they forget about. Those CalHFA loans need to be paid or a small portion needs to be paid in order for the short sale to be approved. With CalHFA being a government agency, it involves red tape and the agency is backlogged. It cannot possibly deal with the number of short sales it is trying to approve within a reasonable time frame.
You basically have two choices nowadays with a CalHFA short sale. You either wait the 90 or so days for CalHFA to respond to your request for a short sale — at which point the first lender might close the file on you — or you pay it off. Last winter, I closed a CalHFA short sale in Natomas under unusual circumstances.
I told the buyer it would be at least a 90-day wait for CalHFA. The second loan was pretty small, less than $10,000. The way prices are moving in Sacramento, 90 days could mean the home would sell for another $10,000. It might be smarter just to offer to pay off the second, providing the first lender will allow it, and close. That’s exactly what the buyer did. Paid off CalHFA. Makes you wonder if the delay for this processing is meant to induce payoffs, but I doubt CalHFA is that together. I don’t give a government agency that much intelligence.
But on another CalHFA short sale, we’ve been waiting since the first week in November for short sale approval from CalHFA. Since yesterday marked the 90-day point that is allowed before escalation, I asked CalHFA to escalate. The first is Bank of America, which said it will not extend past the end of February. Low and behold a miracle happened. I heard goldfinches singing in the yard. The sun came out from behind the clouds. My cats stopped puking. Was that the first robin of spring hopping about?
The negotiator at CalHFA picked up the file and asked for a few documents. Be still, my heart. I’ll get right on that. I like to take care of requests immediately. So do most of my short sale sellers. The seller emailed the documents the negotiator asked for, I put together the reports needed and sent her the package. Within an hour, the short sale was approved. In one day! CalHFA approved it, and we’re closing in 2 weeks. This is the fastest turnaround ever. And naysayers believe a positive attitude doesn’t pay off. Spittooey.
A Private Group Showing is Not an Open House
If the idea just occurred to you that now is a good time for buying a home in Sacramento, you need to talk to a Sacramento real estate agent pronto. I’m not gonna say this is not a good time because I am a real estate agent, and in my playbook it’s always a good time to buy, but it’s not an easy time to buy a home. It’s difficult. Exceedingly difficult. When your real estate agent tells you there will be multiple offers, let me tell you, there will be multiple offers, and some of them will undoubtedly be crazy, wild offers.
Our inventory is very low. There are not a lot of homes to choose from in certain neighborhoods. Even the number of homes in Land Park, for example, are about half the normal. But in neighborhoods like Natomas and Elk Grove, I might run a half-mile to one-mile radius to pull comparable sales and find nothing for sale whatsoever. Everything is pending or active short contingent.
In most situations, we might want to give a wide berth of exposure to try to attract the largest number of offers and the highest number of offers. Ordinarily, an offer is good for 72 hours, unless the buyer changes the time for acceptance. This means if a seller does not respond to an offer within 3 days, the offer expires. It’s no longer on the table. So, what’s a seller to do who wants to maximize exposure? Keep it on the market with instructions to review all offers on a certain day in the future.
In short sale situations, the approach might be different. It all depends on who the seller is and whether the seller is in an emotional state to handle the volume of traffic generated by this type of seller’s market in Sacramento. In some areas, it can be brutal. Buyer’s agents calling at all hours of the night, showing up without calling, parking on the lawn, barging in without an appointment when an appointment is required, this Sacramento real estate agent has heard it all. These are desperate times, but they do not call for desperate measures nor for losing one’s professionalism.
In a short sale, we need one offer at market value. An offer that will appraise as well. An offer from a committed and dedicated buyer. We don’t need 55 offers. Just one that will close. If it’s cash and the buyer is serious, that’s a good sign, too, but it doesn’t mean that a cash offer will win out over a financed offer. Cash buyers can sometimes be distracted by shiny new things. Owner occupants, buyers who want to buy a home to live in, tend to be more committed.
The approach to marketing a home and receiving / presenting offers differs with each situation and is tailor-made for the individual seller. There is no one-size-fits-all. Now, more than ever, the confidential agent remarks in MLS are crucial for a buyer’s agent to read prior to submitting an offer.
We’ve had situations in the past in which the confidential remarks stated showings would be held on a certain day for a two-hour period. Buyer’s agents need to accompany their buyers on a showing. That’s how the real estate business works. Buyer’s agents cannot simply send their buyer over to the property because the buyer’s agent is unavailable on that day. No buyers will be admitted to a seller’s home if the buyer is unaccompanied by an agent. This is not an open house.
My sellers are instructed not to let strangers inside their home. A buyer’s agent needs to produce a business card at the door. If the buyer’s agent sends over an unescorted buyer, we can certainly arrange for another agent to represent an unrepresented buyer or we can send the buyer back home to get her agent. After all, buyers don’t have access to the confidential remarks in MLS. Moreover, it’s important to understand that a private group showing is not an open house.
The Point of Contact in the Real Estate Business
One of the little perks given to homeowners in distress through the California Homeowner Bill of Rights, apart from restrictions on dual tracking, is the right to a single point of contact, what we refer to as the POC. That acronym stands for Punch on Chin. No, it doesn’t, it means Point of Contact; you just feel like punching them. It’s nothing to really get excited about because the POC is often pretty useless. It is a person assigned by the bank to answer the phone when a customer calls. I don’t know if that person physically works at the bank in person or lives in Canada but by golly, it’s a live person you can talk to each and every time you call, even if that person is worthless and no help to you whatsoever.
There are no provisions in the new law that says the POC needs to be knowledgable or carry any authority. The POC doesn’t process your file; the POC accesses a computer database where supposedly notes are stored to glean information. As a Sacramento short sale agent who has worked with hundreds of bank negotiators over the years, I can tell you that much of the data that is not always entered correctly. But by George, you’ve got a live person on the phone. That’s a remarkable feat.
More than half of the time, the information the POC gives to a customer of the bank is incomplete or incorrect. I know this because my client will call to say the POC told her, for example, that the hardship letter is not in the file. Not only is the hardship letter in the file, but it’s at Fannie Mae for review. Along with all of the other docs such as the bank statements and tax returns the POC also says are missing. That’s because I am talking to the person who is processing the file. I am speaking to the short sale bank negotiator while the seller is talking to a POC — a POC who would dig through her bag to find an unwrapped Tootsie Roll pop and plop the thing in her mouth without washing it off.
I had a bank offer me a credit card a while back that would cost me $100 a year. At first blush, I rejected the idea because I am not that interested in accumulating points or cash-back bonuses as I always pay my bills in full and never carry a balance. However, the icing on the cake offered by the bank was not really the cash-back bonuses. It was the fact that I could talk to a real live person who would answer the phone through a direct phone number. That is now a luxury today! To be able to call a person directly and have said person answer the phone without punching through a menu or sitting on hold or talking to other doofuses.
There is little more frustrating than screaming Operator at a recorded message and hearing the reply: Did you say: Call Back Later?
The personal touch is missing from so much in business today. You can’t talk to anybody anymore. I was looking for a small business to help me over the weekend, and I was searching online. Most of the websites were geared to the company and not an individual. I don’t want to do business with a company. People do business with other people. That’s why my website features me because that’s what people want. My website is more than a search engine for homes in Sacramento. And I answer my phone. If you need a sharp real estate agent in the Sacramento area, you can call Elizabeth Weintraub 916-233-6759, and THAT, I promise, will make you happy.
How Long Will It Take to Sell My Home in Elk Grove?
Last week I talked to a seller who lives in the ZIP of 95757 in Elk Grove. I sell a lot of homes in that ZIP code, probably because so many of them are short sales, but some of them are not. It’s a desirable place to live, and some neighborhoods are located in a certain school district, which enforces the desirability of those subdivisions. This seller asked me how long it takes to sell homes in Elk Grove, and I told him we would be in escrow within 7 to 14 days, and probably closer to 3 to 7 days. His jaw dropped, but that reaction is expected because that’s what everybody does when this Elk Grove agent explains the market.
What’s going on in the market in Elk Grove and the Sacramento area in general is so wild and crazy that it’s difficult to believe. That’s in part because we’ve been depressed for so long. It’s like tying a circus elephant’s leg to a stake. The elephant eventually will give up moving, and you can remove the stake, and the elephant will stay there. It’s conditioned. And PETA will get after you for that. Yet in Elk Grove, homes are moving into pending very quickly and there are no consequences.
Unless you’re like this seller in Elk Grove I was talking to. When I showed him the pending sales to prove how quickly homes were selling, he looked at the numbers and snorted. He said the sellers were selling too quickly and for too little. Because he’s sold so many homes in his life that added up to the number 2, he knows for a fact the sellers in Elk Grove gave away money. Which is one way to look at it. Except they didn’t. They sold according to the market. They let the market dictate. And the market responded favorably for them.
Putting a home on the market for 30 days without accepting any of the dozens of offers you’ll receive is insanity. Because offer #29 isn’t going to be the highest offer. Neither is #30. Your highest offer will be among those received in the first 7 to 10 days. After three weeks, interest dies off. People begin to wonder what’s wrong.
My goal, as your Elk Grove listing agent, is to attract as many buyers as possible and let them bid for your home. In a seller’s market, like our present market in Elk Grove, a newer home in a popular subdivision priced between $200,000 and $300,000 will quickly sell. If your home is drop-dead gorgeous, buyers will be lined up down the block. An experienced Elk Grove agent can take one look at your home and tell you how quickly it will sell. Of course, selling is only the first step; you’ve got to get it closed and that’s another blog.
I will say this, if I were the owner of a food or ice cream truck, I would be driving around Elk Grove on the weekends.
A 3-Lockbox Friday for This Sacramento Agent
This Sacramento real estate agent should be adding 3 more homes to the inventory in the Sacramento area on Monday. It’s a small contribution to our sorry state of affairs in the Sacramento real estate market. We have fewer than 1,500 homes for sale in Sacramento at the moment, which is miniscule and does not meet the demand. This means when a potential seller calls to say he or she wants to put a home on the market, this Sacramento agent does her best to accommodate without delay.
I was driving back from Elk Grove where I have a lot of listings when I got the call to Rocklin. I seem to list and sell an unusually high number of homes in Elk Grove, even though I do not live there. I live in Land Park. Probably because so many are short sales in Elk Grove, and I am the best Sacramento REALTOR to handle short sales. Yet, a few that are not short sales are creeping into my listings. I closed a regular home in Elk Grove that comped out at the top around $245,000, and with one-eye closed and clenched teeth we pushed the limit to meet the rising pending demand to $259,000, yet it sold for all cash at $280,000.
Buyers are desperate to buy a home today. It’s hard to pick a sales price because it’s hard to predict how high a buyer might decide to go or how far out an appraiser will go to appraise. I realize sellers think us listing agents can pull rabbits of hats, but we can’t always predict what buyers will do. We can only guess. If your home is marketed correctly, the market will take you where you want to go. You don’t want to be too high because buyers will wonder what’s wrong with your home when you reduce. You don’t want to be too low because buyers might wonder upfront what’s wrong. You want to be priced just right, like Goldilocks and the Three Bears.
Which brings me to my 3 lockboxes from yesterday. One lockbox went on a home in Elk Grove that will be a short sale. Another lockbox went on a home in Elk Grove that will be a traditional sale, and the home is absolutely gorgeous. Don’t call me about it because you’ll get your chance to buy it along with everybody else next week. I don’t make side deals or give special considerations to my friends. I’m not that kind of listing agent. Don’t offer to let me write the deal in the hopes I will compromise my ethics and tell the seller to take your offer, because I don’t do that, either. Yada, yada, that’s not what you meant, yeah, right!
Another lockbox went on a home in Rocklin, which will be a short sale. It will need some work, and homes that need work are often a struggle with the short sale bank because the banks often refuse to acknowledge the homes need work. Or, maybe those darn BPO agents just don’t go inside. Hard to say, but it will be challenge, yet not a challenge that I can’t overcome.
Elk Grove in the morning. Rocklin in the afternoon. Back to Elk Grove in late afternoon. That was a lot of driving yesterday for a Sacramento agent who lives in Land Park. I love this business.
