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Elizabeth Weintraub
Sending Short Sale Offers to the Bank
I recall way back when short sales first started in 2006 the confusion among real estate agents over sending short sale offers to the bank. Some real estate agents believed that every offer should go to the bank. That’s only because they did not think through the facts. First, the bank does not own the home. Some agents were used to dealing with REO banks and thought a short sale was handled the same way. In an REO, the bank owns the property because the home has already been foreclosed upon and title has been delivered to the bank.
Moreover, some people erroneously describe a foreclosure as the home “going back to the bank.” The home doesn’t “go back” because the bank never owned it. The bank has a security interest in the home but not a real property interest. The home is owned by the homeowner. It is still owned by the homeowner during a short sale.
Second, banks must approve a short sale and agree or counter the terms in the accepted offer. This does not make the bank a party to the real estate transaction, however. It makes bank approval of the short sale a contingency of the purchase contract.
The only offer that should go to the bank is the accepted offer. If the seller wants to accept a backup offer and send the backup offer to the bank, the seller is generally free to do so. In that event, the bank will ask the seller which offer the seller wants to accept. At that point, the seller can certainly point to the backup offer. It is not customary for the seller to send a backup offer to the bank. As long as the submitted offer is reasonable — an offer the bank is likely to accept because it is at or near the comparable sales — that’s the offer that is likely to win approval. That’s the offer a Sacramento short sale agent submits at the seller’s direction for approval.
Banks don’t want to be in the real estate business, too. They have a hard enough time determining fair market value without us Sacramento short sale agents giving the banks the right to weigh the merits of each individual offer. But that’s not stopping a few enterprising entrepreneurs from starting up high-tech platforms that allow banks to receive all offers ever submitted by nitwits. I won’t do them any favors by naming those companies because I just hope in all that is halfway sane in a short sale that it never happens. For everybody’s sake.
A New Tech Gizmo for This Sacramento Real Estate Agent
Thoreau was not talking about voice recognition software when he advised us to simplify, simplify. But I am considering buying it to make my life easier. Ah, the things we can’t do without these days. As an extremely busy Sacramento real estate agent, I spend a great deal of time talking to my cell phone. The problem with that is it types the weirdest things, sometimes using swear words that it didn’t learn from me, so I don’t know where my phone got it from. It must be sneaking off to pool halls late at night while I think it is charging. Although, actually the problem isn’t so much that it types weird crap, it’s that I click so quickly that I can click send when I don’t mean to.
Uh, oh. I hate that. That’s how I get into trouble. That’s when I have to actually call the person I just sent the nasty message to and explain I did not really say: screw you and the horse you rode in on, I meant to say: she’d love to give you the refrigerator.
Much of the time when I’m sending a text message or email via my phone to someone like my Transaction Coordinator — to a person who knows me well and the types of things I’m likely to say — I don’t even fix the mistakes, though. I just let them go through knowing that she will most likely figure them out. I suppose this drives her nuts. But she does a good job at figuring out the messages I am trying to convey. If my phone types: pls ask the cellar to shove it, she knows I meant for my phone to say: please ask the seller to sign it. Or, maybe that’s why my next door neighbor just listed with ZIP Realty . . .
The other day I found myself holding my iPad in two hands and shaking it. For just about 2 seconds there, I suspect I was trying to erase the screen, like it was an Etch-A-Sketch. Even more irritating, I was ready to send an email yet nothing was typing. I talked and talked, and it just sat there. That’s because I was working so quickly I temporarily forgot the iPad wasn’t my phone. Talking to it was not going to make it type anything. Gizmos can be frustrating. They all don’t do the same thing, even though they all meet up briefly through the “cloud” together.
However, my husband shoved his phone under my nose the other day and asked me to say something I would normally say to my phone. So, I said please find out from the bank negotiator when we will receive the short sale approval letter and whether it will come when pigs will fly, and it typed it precisely. I was amazed. Dragon software. That seems to be the answer.
So, if you find yourself talking to your iPad, don’t feel bad about it. It can happen to any of us. And you kids, get offa my lawn!
If You Are Not A Weintraub Client
Just because I deal honestly with other people doesn’t always mean people will deal honestly with me, and I can live with that. I can’t change other people; I can only change myself, but I have to really want to change, ha, ha, little joke. I mean, what other business in the world can you be in that involves working with other people without a contract or guarantee that you’ll ever get paid? Apart from the state of California, I mean. The real estate business is an odd duck.
You know what else is odd? U. S. Customs. I went through U. S. Customs in Los Angeles earlier this week when I came back from French Polynesia. I filled out my custom’s form in meticulous detail, and drove my husband crazy trying to compute the value of each item I had purchased in the islands. We had to convert from Franc-er-roos to American dollars, and the conversion rate was different on different days, but we managed to arrive at a value to report.
The guy at the first window stared at my declaration and gasped, “You spent !!!! (a bazillion dollars)?” He stared into my eyes. My husband volunteered, “Hey, I was stunned, too.” I answered in the affirmative. Yes, I did. Well, then I was ordered to go to Section B. Oh, no, not Section B! I grabbed my suitcases and marched over there. Thank goodness for those new rollers on luggage that allow a person to maneuver her luggage with one finger, that’s all I’ve got to say.
I handed my declaration to the guy standing behind the sign that read Section B. He studied it. His eyes narrowed, brows crisscrossed. He, too, made the bazillion-dollar comment. Then he questioned, “These pearl necklaces . . . do they have a tie clasp?” I retracted a necklace that did and showed it to him. He asked about the others, but they were gift wrapped. He did not make me unwrap them. He said simply that he would presume they were all similar, and he exempted them, adding that he believes that U. S. Citizens should get a break. I suppose it’s because I was not a “permanent resident” but instead a U. S. Citizen. I don’t know for sure but he gave me a break, and most likely because I told him the truth.
But I don’t always get the truth out of potential clients who approach me. I ask if they are working with another agent. Most of the time, a person will say no, she is not. Perhaps in her mind she is telling the truth because her agent is not standing next to her. She has her own definition of what working with an agent means. If the agent believes you are her client, then you are working with an agent.
The problem with working with an agent is this Sacramento real estate agent can’t work with a buyer who has an agent. It’s not ethical. It is against the Code of Ethics if a buyer or a seller is in contract, in escrow, with no intention of canceling and just wants advice, for me to respond. If a person has signed a purchase contract and not yet canceled, that person has a fiduciary because the agency most likely has been signed as well. Once a person is under contract, a person should not try to get advice from another REALTOR without first canceling the existing relationship.
Yet, all the time I see buyers and sellers on Zillow and Trulia and other websites seeking advice from REALTORs. Most of these buyers and sellers are in contract. They also contact me directly. They email or text or leave me voice mail messages, and they ask for my help. They probably think I am being a witch when I don’t respond or say I cannot help them, because they don’t know any better. They don’t know how agents work. It’s not that I don’t want to help, it’s that to do so would violate the Code of Ethics. On top of that, I am paid to help clients. That’s how I earn my living. If you are not my client, then you must either become client to get my assistance or find help elsewhere. I don’t make up these rules. But I do believe that what goes around, comes around.
If you are working with the Elizabeth Weintraub Team, you can get help from me or any of my team members. But you have to first be working with us. If you are working with another agent, you need to get your help from your own agent.
Photo: Gift shop in Bora Bora, which was probably sued by the owner of the rights to Fantasy Island, by Elizabeth Weintraub
A Cash Offer to Buy a Home is Not Always Cash
A South Pacific reef lobster-related cut still smiles on my thumb. That and a few no-see-um bites is all that remains from my 3-week vacation in French Polynesia. At least that’s all I spot as I do a full body check, heading out the door this morning to my Midtown office. Eyeballs have contacts. Check. Keys. Check. Pants. Check. I’m good to go. The life of a Sacramento real estate agent never really stops, it just slows down a little bit over the holidays. It’s like my life goes into slow motion and all the seas are calm. As a reminder, I give you this red hibiscus found on Bora Bora.
There will be more listings to take this week. Which is good because the inventory is so low in Sacramento right now that buyer’s agents are emailing and asking me to notify them before a listing goes on the market. That won’t do anybody any good though because there is no “first shot” at a property. All listings are exposed to the widest pool of buyers possible, which means complete mayhem in this market but that’s the way it goes. It doesn’t matter if the listing is a regular home for sale by a seller with equity or if it’s a short sale, every seller deserves equal opportunity among the vast number of buyers.
Sellers don’t want limited exposure. The short sale banks don’t want side deals going on, either, or buyers sneaking in the back door. Everybody gets a chance to buy. I realize it’s super tough to buy a home in Sacramento; it’s tough for many buyers in this market. That’s because some buyers are waiving cash around. Cash offers tend to get priority. Few buyers can compete with a cash offer.
I recall a few weeks ago a buyer’s agent emailed me while I was in Bora Bora. She asked if she could write an offer as all cash and yet reserve the right for her buyer to obtain a hard-money loan. That’s kind of back-door way to write an offer, and while I understand why a buyer would do it, it’s not really a true picture. The true picture is the offer is a hard money loan with the right reserved to pay cash. If you want to be honest about it. So, that’s the way she wrote it, and the seller accepted it.
You don’t need to play games to buy a home in Sacramento.
Photo: Adam Weintraub
Major Bank Settlements Pay Cash for Short Sale
Can you get money for doing a short sale with Bank of America, Chase, Wells Fargo or Citimortgage? That’s most likely the question in the minds this morning of many past, present and future short sale sellers. You might get enough cash to take a French Polynesia vacation, you never know. The New York Times reports payments as much as $125,000 to reduce principal balances could be offered as a result of these bank settlements. And the bank I see paying out the most in Sacramento is Bank of America on those Cooperative Short Sales. Yup, banks will pay cash for short sale.
Remember way back when, when this Sacramento short sale agent suggested that Bank of America was actively dumping those old Countrywide loans? It seems I was right on the money with that call. If I spotted a Countrywide loan in a short sale, on that hunch alone, I routinely directed the seller to a Cooperative Short Sale. Never had a Cooperative that way rejected. I have probably initiated more Cooperative Short Sales on my own through Bank of America than any other short sale agent in town.
I recall one instance in particular. I was dealing with a third-party vendor, either REDC or DTS, don’t recall, there are so many. This particular third-party vendor was telling me we had to do a HAFA, and I insisted, no, it needed to be a Cooperative Short Sale, even though I was going out on the limb a little with that demand.
I was driving through Midtown Sacramento with the top down on my car, so it was hard to hear the caller on my Jawbone, but we argued for a good 14 blocks, all the way from J Street to Broadway. Finally, I suggested she call her supervisor to discuss because I didn’t want to hear from her again about a HAFA when this short sale was destined to be a Cooperative. Sure enough, a day or so later, the bank switched to a Cooperative despite the negotiator’s initial objections. That seller received more than $10,000 to do the short sale and no documentation was required. It can pay to disagree with an individual’s assessment. Because individuals aren’t always right.
For months, Bank of America has been releasing servicing. Sometimes, the service release happens smack dab in the middle of a short sale, which is a rude awakening. The bank needs to pay Fannie Mae $11 billion and needs to get that money somewhere, so it’s dumping its loan portfolios. Part of the problem with that is it’s reducing competition among lenders if Bank of America withdraws from the mortgage market. When competition is reduced, it hurts consumers.
It will be interesting to see how this all plays out. If you’re looking to see if you could be a lucky recipient of cash for a short sale, call this Sacramento short sale agent and I’ll check it into for you.
Photo: Flower of Tahiti, by Elizabeth Weintraub
