Elizabeth Weintraub
Wishful Thinking Won’t Close a Short Sale
I’m not from Missouri, so you don’t have to show me the money. But I do have built-in radar that makes me question certain things. If something seems off, I tend to explore it. That’s my nature. I grew up with the expression: Question authority, because I lived through the 1960s. You will notice I did not say I completely recall the 1960s, but I did survive those years.
Today the expression is: Question everything. When one is a Sacramento short sale agent, one tends to question everybody and everything anyway because a real estate agent has a legal fiduciary to her client. I look at what people do and not so much what people say. Sometimes, agents can be bamboozled. Some of them so badly want to hold a deal together that they’ll let things slide and they’ll believe their own wishful thinking. For example, I am working on a short sale in which the buyers were unwilling to meet the bank’s demands. They sent a signed cancellation. Then, after talking with a third-party vendor for Bank of America, I was able to get the bank to agree to look at a different solution.
I presented this solution to the buyers in the form of an addendum. That was a couple days ago. The buyer’s agent says the buyers will sign the addendum. Every time I ask him for it, he says it is coming and he is working on it. But the addendum has not arrived. There comes a point in which somebody needs to be the grown up in this situation. Today is that day. We need to examine the facts. The facts are we have a signed cancellation. We do not have a signed addendum. We have a verbal that the buyers will sign the addendum but the addendum is not in my hands.
It’s nothing personal, but that short sale is going back on the market today. My advice to my sellers is to sign the cancellation and find another buyer who is willing to perform. As a professional courtesy, we gave the buyer’s agent until 9 AM today to produce the document. If it shows up, the home won’t be released to inventory, but I am not holding my breath. I wish people would do what they say they will do. But that’s what they call wishful thinking. If you’re looking for a short sale in the Sacramento area, call me.
Two Loans on a Short Sale for Luxury Homes
Having to deal with two loans on a short sale is always a bit tricky. I’ve yet to encounter a dual loan short sale slam dunk, and I’ve closed hundreds of short sales over the years. Over the last 12 months alone, not counting my regular equity sales, this Sacramento short sale agent has closed 138 short sales. Not one involved an easy second loan to negotiate. They are all a pain in the butt. But I do them because they come with the territory. I’m not about to decline a listing just because it involves a little bit of extra work. After all, I sell short sales. By the very nature of the transaction, a short sale is a lot of extra work over a regular sale.
I can share with you one such solution to the two loans on a short sale problem involving a luxury home sale. Upper-end short sale homes are handled differently than entry-level short sales. I just closed a short sale home in Roseville with a $1,000,000 first mortgage and a $300,000 second mortgage. Both were held by the same lender. This is important only to the extent that two loans on a short sale, held by the same lender, does not necessarily mean the investors for each loan are the same. The investors can be different. Plus, the junior loan can be managed through another department in a different state.
The second loan was hard money. Lenders aren’t always flexible with a demand for a hard-money second. That’s because these loans carry recourse in California. A lender could just wait for foreclosure, get wiped out and then pursue the seller for the deficiency. This is why it’s important to consider a short sale for hard-money loans because the rules governing short sales are different. When a short sale is approved, under California state law, the lender must forgive the deficiency and waive the right to pursue the seller.
In this particular instance, since both lenders were the same, the second lender might not have had a legal right to pursue the seller in the event of foreclosure because there’s a little known law that excepts those instances. You can’t have your cake and eat it, too. But that’s neither here nor there, and I am not here to give legal advice. If you want legal advice, you must ask a lawyer.
In this luxury home short sale in Roseville, the second lender wanted a lot more money than the amount the first lender would approve. Most first lenders will authorize payment from proceeds somewhere from 6% of the unpaid principal balance up to $8,500 maximum. There are a few exceptions, and I’ve seen banks authorize a payment of 10%, but in this instance, the second lender demanded a big chunk of change. Peanuts as compared to the deficiency balance, but it amounted to a lot of money. The seller can’t pay it. California Civil Code 580e prevents a seller contribution. But the buyer can pay it providing, and this is the tricky part that you can’t overlook, the first lender approves. We negotiated the payment and reduced it but it was still almost $20,000. Since the first lender was the same lender as the second, the first lender approved the payment.
This was a good deal for the buyer because the buyer really wanted the house and was picking up the home for about 50 cents on each dollar of debt. We suspected a buyer contribution was a distinct possibility when we chose the buyer for this short sale. We asked the buyer: If push came to shove would the buyer step forward? Because you never know exactly what a short sale bank will do. When you think you know, that’s when you get into trouble. But this buyer agreed to discuss if the issue came up. It did, they paid it and we closed.
Sacramento Short Sales are Like Snowflakes
You can do all of the research in the world online and still come up with the wrong answer about a Sacramento short sale. That’s because no two short sales are identical. Short sales are like snowflakes. Each is different from each other. Sure, you can try to categorize them and say, oh, a Bank of America FHA short sale is so bad it makes you beg for a bullet between the eyes to put you out of your misery, but that wouldn’t necessarily be true. Sometimes, you might trade having your guts stomped on by King Kong.
Yet, this Sacramento short sale agent continues to list B of A FHA short sales because I am an optimist. I’m one of those glass-half-full people, and I especially am happy if it’s half-full of champagne. I toast you Bank of America, for your FHA short sales and the opportunity it presents for you to overcome this monster of an obstacle.
So, while you can partially classify a short sale by the bank and the investor, the condition of the property, location and appeal of the home in Sacramento, and the seller’s particular hardship all play an important role in the short sale. You can tweak any one of those factors and conditions, and it will change the outcome of your short sale. Throw into the mix a second loan, a Fannie Mae investor and any kind of financing that was not purchase money, and flip that switch on the blender — turn it up high, so high that the contents blow off the lid and that icky, gooey mess hits the ceiling and drips back in your face. How does it taste? Yuck is right.
Here is what some Sacramento short sale sellers will hear this month: It’s OK that the buyer walked because we’ll find another. Yes, it looks like some little thugs and thugettes ripped out the AC unit in the yard. Fannie Mae wants a higher price than an appraisal will support. But a good Sacramento short sale agent will persevere, soldier on, and drag that short sale kicking and screaming to the closing table.
The moral of this story is if you have a question about your short sale, you should ask your Sacramento short sale agent. Don’t go looking for answers online because what you will find is somebody else’s nightmare, and you probably won’t stumble upon your own situation. Each short sale is different. Unique. It is a snowflake.
A Night at Alinea Restaurant in Chicago
If my mother had been buried instead of cremation, she’d be rolling over in her grave right now about such excess. There’s no way around it — dining at Alinea Restaurant in Chicago is a bit extreme in terms of taste (unique, unparalleled), number of courses (there were 18) and cost (you will shudder, the wine flight alone was the cheapest part at $150 per person). It’s a food adventure, which is why I was drawn. It’s also a challenge to get a reservation. Challenges are what this Sacramento short sale agent faces each and every day. Challenge is my middle name. We were going to Chicago for the Thanksgiving holiday and, by hook or by crook, we very much yearned to snag a reservation at Alinea for Saturday night.
Every day we checked email to see if the restaurant had contacted us. Religiously, we signed daily into Alinea’s Facebook page and checked for reservations. Finally, on Friday night, we received an email that Alinea was releasing a table for four. The problem was we were a party of two. We tried to persuade family members to go but none had an interest. We called some of my husband’s old friends from grade school — I kid you not. We checked Facebook again and found a few couples who had expressed an interest in sharing a table. Bingo.
You don’t make a reservation at Alinea. You reserve tickets for dinner. And each ticket varies in price depending on the time of the year and occasion. Lucky us, for Thanksgiving, these tickets, with tax and gratuity added in, ran about $800 for 2 people. My mother would say think about the starving children in China. Instead, I thought about my last Bank of America FHA short sale: I deserve this.
The door is unpretentious. We opened it. Behold, a long hallway strewn with a bed of hay. Scattered pumpkins. Hay bales. Low lighting. Spiced apple scent. A round tub, waist high, filled with hot water and bobbing glasses of apple cider beckoned. We scooped up a small glass of cider and entered the restaurant. We were greeted and directed toward the kitchen on the right. A huge room filled with too many tables and chefs to count, a whirl of stabbing, stirring, pinching, cutting, slicing, dicing, chopping, tossing, mashing. Mesmerized, I entered the kitchen. I thought this was like The Kitchen Restaurant in Sacramento, and that I was encouraged to mix and mingle among the chefs. Wrong. Neophyte. Short of grabbing the back of my sweater to yank me back, I was escorted in the opposite direction.
We entered a room to the left of the stairs and were introduced to our table mates. There were about 5 other tables in the room. All of the other guests were seated elsewhere, which was a little bit disappointing because part of the fun, I presumed, would be to check out the guests. I wanted to get a good hard look at the kind of people who would spend $1200 for dinner, and that’s without the white truffle option at an additional $150 per person, which we were offered. But everybody in our room looked like normal, run-of-the-mill people.
Our seat mates were on their first date, we later discovered. She is an associate professor of marketing in Lansing, Michigan. He is a student in Boston. He thinks Chicago is the best place in the United States to live. He used to think that place was Seattle, but now that he’s been to Chicago, he would love to live in an igloo. She is absolutely beautiful with long dark hair, an infectious smile and a warm handshake and, as my husband pointed out when she left the table, she clicked off wearing what I would call to-die-for boots.
I don’t have the time this morning to describe every course. I’d still be sitting here by lunch and I haven’t yet had breakfast. So, I’ll do my best to briefly give you an idea. Four bowls about the size that would hold Cheerios were set before us, each filled with tiny pebbles, the type you would find floating along the bottom of a river stream. Into the pebbles was set a 4 x 4 block of ice with a hole drilled in the middle, but not all the way through. I stuck my finger in it. My husband said: That one is yours.
The waiter brought us each a glass straw about 3/8 inches in diameter and 10-inches long. The straws were filled with a pumpkin-squash mixture, a thai pepper and we were instructed to slurp. I finally removed my straw because stuff was stuck inside and sucked it from the other end. Voila.
One course was nothing but a leaf. A small leaf about the size of a nickel. An oyster leaf. But it was very oystery. This was followed by several courses of seafood involving king crab, lobster and a razor clam. If you’ve never seen a razor clam, they are long, like about 5 inches and an inch or so wide, sort of flat. You could play a musical instrument with each half if you wanted but I behaved myself because I needed my other hand to lift the glass of wine that seemed to be continually filled with nectar from exotic faraway lands and tended to by the natives.
I learned many things. I discovered that the fungus moldy stuff that grows on corn cobs — who knew there was even fungus to start with — is actually very tasty. But you’ve got to ask yourself, how hungry do you have to be to think about eating the mold off a corn plant? Well, I was ready to toast starving people everywhere. We also enjoyed a course made up of a very hot potato and pared with an extremely cold potato that should have been named a Minnesota winter meets summer in Sacramento.
The main course for the evening was lamb. Two round slices of rare lamb. Two round slices of a roulade, and two more round slices of fried lamb fat. Small circles, smaller than a baseball in diameter and slightly larger than a golf ball. With this course, we were given a tray of accompaniments, 60 (six across, ten down) dots, blobs, splats, tiny towers of taste extraordinaire. The idea was to sample each with a fork of lamb. Short of putting our faces on the platter to lick it clean, we pretty much managed to scoop off every morsel.
And the wine kept coming. Just as we were ready to pass out, the waiters brought us balloons made from green apple taffy and filled with helium. The balloons were edible and we were supposed to eat them. I poked a hole and slurped up the helium. When I spoke, the woman across the table from me broke into uncontrollable laughter. If I had closed my eyes, I would gone to sleep but before I dozed off I would have said this tastes just like an apple.
I kept my eyes open for the dessert. The last dessert. I show you a photo of it here. The waiter brought out what looked like a rolled-up sheet of silicone, unrolled it across the table. It fit perfectly. Then, a couple of chefs popped up out of nowhere and began to decorate the table. A spoonful of orange. A spoonful of lemony yellow. A spoonful of chocolate. Spoonfuls of other types of syrups and sweets, very psychedelic and groovy. Everything happened so fast and my head was already spinning from all of that wine, but I could swear two chocolate coconuts appeared and suddenly exploded before our eyes, dropping masses of chocolate, fudge chewy bits, white marshmallowy things, who the heck cared? It was dessert supreme, pushed to the extremes, with every flavor imaginable. It was like all of your favorite desserts mushed into one. I felt like Gollum coveting the ring: My precious!
This was the part where I could have easily put my face flat on the table and left it there until morning.
A Dinosaur Named Sue at The Field Museum
You might hear people say that certain types of dinosaurs are well suited to play piano, but I learned that is not true. Not true at all. Not even in the tiniest little bit. While it is indeed amusing to think about dinosaurs pecking away at the ivories, the truth is those Tyrannosaurus Rex guys couldn’t really play anything more complicated than Chopsicks. That’s because they have only two fingers on those tiny little hands. A T-Rex can only take selfies of her neck.
It’s kind of depressing to visit The Field Museum in Chicago because you learn these kinds of things. Right up front, when you walk in the door, there is Sue, the real Sue T-Rex, right there in front of your nose. I knew she was somewhere but I had no idea she was living at The Field Museum. I think they found almost all of her bones, too, unlike some of those other dinosaurs, including the guys from Spielberg’s movie — but those are up on the top floor, way in the back. And you have to wade through all of those depressing Mass Extinctions that happened when everybody was wiped off the face of the Earth, not once or twice, like you’d imagine but a whole bunch of times. So many that they pretty much lost count and started including some of the smaller mass extinctions in which only like 50% of the population of alive things died off.
That photo of Sue’s head is not her real head. Oh, her real head is at The Field Museum all right. It’s encased in glass in its own special exhibit. You might think it’s to stop you from poking at her enormous teeth and trying to feel the tips, but she’s in the glass case because her real head is too heavy to sit on top of her enormous body. Yup, that’s right, your head still stays fat and heavy even after millions of years of sitting in the sand and getting rained and snowed on now and then. There were all of those glaciers, too, and chunks of land splitting off, India slamming into Asia, although South Dakota stayed pretty much intact.
I hate to admit this but it was only recently that I learned about the Super Continent. All of my life I had suspected that South America had once been part of Africa, and a few years ago I discovered it was true. That was an amazing discovery for me because this was not something I had learned in school. It’s not that I was sleeping through my classes; I received a lot of A’s and stars and learned how to play nicely with others. But I did not realize that new things were being discovered about the earth each and every single day to the point that the entire way our planet was formed had changed overnight, and every person on earth knew about the Super Continent and Pangaea, except me.
This is what happens when you’re busy selling Sacramento real estate.