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Elizabeth Weintraub
A Home Buyer Almost Lost Her Rosemont Home
I just closed escrow on Friday for an incredible couple of sellers of a Rosemont home who had moved to Florida. They had owned a rental property in which the tenant had vacated and it was now time to sell. An agent in Florida referred this couple to me. I think the agent found me through one of my blogs and noted that I sell homes all over the Sacramento area. Because I sell so many homes (100+ /yr), odds are I probably sell a lot in any one area, and Rosemont is one of those neighborhoods for me. I know it pretty well. And I knew this particular home might pick up comparable sales from a nearby subdivision, which has a higher per median square-foot-cost than the surrounding neighborhood. Which meant if we positioned this correctly, the sellers could probably get a bit more for this home than they would otherwise.
I look to maximize profit for my sellers. That’s because I really enjoy what I do. It makes my sellers happy as well. I feel like I’ve done my job above and beyond when sellers walk away with a lot more money in their pocket than they thought was possible. Being a Sacramento real estate agent is one of the greatest jobs in the world. Being a top producer is even more fun, if you can imagine that.
The sellers had finished painting, making a few repairs, and buying a new microwave. The home in Rosemont looked great. Even the door knobs glistened. A bunch of offers arrived. One of them was all cash from an out-of-state investor (warning bells), but the buyer’s agent swore up and down the investor would perform. Easy peasy guy is what he said. Exact words. Except the investor was anything but easy peasy and the agent failed to respond to requests for documents. My recommendation to the seller was to drop the buyer. Fast. Like a hot potato. Because the Sacramento real estate market is too danged hot in itself. It’s a seller’s market right now, which means there are a lot of buyers competing for limited inventory.
Sure enough, we went back into escrow immediately with a new buyer. She wasn’t cash, though. She needed an FHA loan. And the appraisal came in a little bit lower than the asking price. That’s the problem with buyers who use financing. They must rely on a Sacramento appraisal. If they don’t have the cash to bridge the gap between the appraised value and the sales price, they risk losing the home. The difference wasn’t that great, though, and it was still more than the seller had hoped to receive, so the seller elected to move forward at the new sales price.
See, that’s the problem with an appraisal. Appraisals are not chiseled in stone. An appraisal is just somebody’s opinion of value. Could be a person of great integrity and intelligence who prepares the appraisal or it could be a lame-ass doofus who couldn’t find his way home with 3 maps and 2 flashlights. You just don’t know who you’ll get.
After we moved forward with the appraisal, the buyer’s lender simply could not close. It’s like an epidemic sweeping Sacramento: lenders who can’t close. Not on time anyway. They might say whose time frame are you looking at — is it the purchase contract that gives us only 30 days, which isn’t enough time to brush our teeth much less brush our hair? Or, is it our time frame, which is somewhere south of the border, west of the International Date Line and in another century?
The escrow dragged on and on and on. The buyer’s agent submitted an extension. Then another extension. The sellers questioned whether they should sign it. At this point, it might make more sense to just rent out the home in Rosemont, put it on the market next spring and deal with the new influx of buyers. Or, not. It was enough to give the buyer a heart attack. See, this is the importance of selecting a mortgage lender who can perform and not some group that can’t close on time. Because, as a buyer, you could run out of time and the seller could cancel the purchase contract, hand back your earnest money deposit and say nice to know ya; don’t let the door hit ya in the butt.
But these sellers elected to close escrow and extended. It made no difference to me because a commission now versus a commission next spring doesn’t matter; besides, I want what is best for the seller. Who it mattered to was the buyer. The buyer was a first-time home buyer. My agent who picks up my lockboxes after closing said the buyer was very grateful when he stopped by yesterday. It’s nice to have a happy ending. Happy sellers, happy buyer, happy buyer’s agent. What else could you want? How about a happy referring agent in Florida? Yeah!
Maybe Your Roseville Home is Worth More?
Of my four closings yesterday, two of those homes were regular transactions and not short sales. I hope this is a trend that continues. Fewer short sales, more equity sales. Because for the past 7 years, most of my business in the Sacramento four-county area has been short sales. That’s why they call me a Sacramento short sale agent. But before short sales, I enjoyed a long career selling regular homes. People tend to forget about that. But I don’t because my job is to help sellers sell their home, regardless of what it is.
One of those closings was a home in Roseville. It was owned by a spunky 82-year-old woman whom everybody adored. I mean everybody: the title company, the escrow officer, the buyer, the buyer’s agent, and especially me. This woman is incredible. Funny, sweet and smart. I could not believe that her family dumped her at the last minute. The home was hers alone, but a while ago her family members decided to join her in title. I’m not sure exactly why but I’m betting they felt she had equity, and they wanted a piece of it. When she told them she was interested in selling, they convinced her that she would have to do a short sale. If she was to short sale, they wanted to bail because they did not want to participate in a short sale. No money to them and nothing but a hassle.
See, the thing is a short sale lender will want everybody to participate in the short sale process, even if the parties are not on the mortgage. If they are on title, they need to fill out all of the paperwork, just like the mortgagors, and apply for the short sale. This seller’s family members were so sure she had to sell as a short sale that they deeded the home back to her and recorded that deed! I always check out title before I take a listing. Three decades ago I used to work at First American Title. This seller definitely had clear title to the home. A home with equity!
She was also very shocked when I told her she did not have to do a short sale. She had plenty of equity. This Roseville seller had enough equity to sell her home for top dollar, pay a commission, all of her closing costs and back taxes, and still have a lot of money leftover. Do you know how good that feels as a real estate agent to share with a seller that kind of good news? Or, as a seller to hear it? To find out that instead of a short sale, you can protect your credit and stash, say, $20,000 in the bank. When you’re on a fixed income, $20,000 could be a year’s income or more.
It beats the alternative. I had to inform a Land Park seller last year that her Land Park home had slipped into short sale territory and that she needed to sell as a short sale. We tried to sell as an equity sale but it hadn’t been working. She exploded to the point that I had to cancel the listing. Just blew up at me. I always try to tell people the hard truth but not everybody can handle an agent who is direct. Some prefer agents who sugar-coat, beat around the bush, and that’s not me. Eventually, that Land Park seller put her home back on the market as a short sale with another agent. That was too bad. Because I would have done a good job for her. You can trust that I will always try to do what is best for the seller.
But before jumping to the conclusion that your home is underwater, you should ask a real estate agent for her opinion of value. You might be pleasantly surprised. Some of us do a bang-up job at pricing a home and figuring out market value.
A Bank of America FHA Short Sale Disaster
This Bank of America short sale doesn’t compare to the Bank of America HAFA that had 25 HUDs. But we’ve had at least half that many HUDs requested already on this Bank of America FHA Short Sale. The negotiator can’t decide what he wants or needs. First it’s THIS, then it’s THAT, then it’s THIS OTHER THING and then he’s back to THIS again. I call it the HUD game. The Bank of America negotiators call it doing business in a normal fashion. It’s enough to make a Sacramento short sale agent watch FOX News. No, not really, nothing would make me that insane.
But I try to have empathy. It’s not easy being a Bank of America negotiator and being despised by so many. The clients can’t stand them and the agents aren’t faring much better. One of them accused my mild-mannered and extremely polite assistant of “bullying” when she asked why he refuses to do what he says he will do. It’s like the guy has suffered a total memory lapse, but I suspect his inability to perform is due to keeping incomplete notes. He will say one thing, and when we call him back he has no recollection of the conversation and says something else.
Unlike Alzheimer victims, the negotiators seem like they are coherent. However, on top of the poor record keeping and inconsistent behavior, is the sudden loss of files on those Bank of America FHA short sales. We have a Sacramento short sale that we started in February. By the end of March, we had approval from Citimortgage, the second lender, which changed its name a while back to One Main Financial. By the end of June, we finally received the Approval to Participate from HUD on this FHA short sale. I guess Bank of America fired the negotiator or maybe she died, hard to say, but she vanished one day. Poof. We got a new negotiator in the middle of September who informed us he had absolutely no paperwork whatsoever.
Maybe he picked up the file, glanced at it, and said: What is this garbage — and threw it into the recycling? Or, maybe the previous negotiator stuffed it in the shredder on her way out the door? I suppose it’s possible a Bank of America employee suffering from a combination of pica and low wages, driven by desperation and starvation, ate it?
This negotiator has asked us to add a dead person to the purchase contract and to all of the paperwork. The deceased person was never part of the contract. Her name was not recorded on the deed; it’s also not on the promissory note and not on the deed of trust. Somewhere along the line, in some ancient paperwork, a clerk at Bank of America typed the deceased person’s name on a file, on a piece of paper. In this negotiator’s infinite wisdom, that means putting a person who does not belong on title on all of the paperwork and on the HUD, which violates federal law (RESPA) as well as several local laws. Negotiators don’t have a real estate background. They don’t understand title insurance. They certainly don’t understand law, although I bet they dream of a career in law enforcement.
This is a $75,000 home in Sacramento. The person I feel tremendous empathy for is the seller. Next to that is the buyer who is sitting idle in escrow twiddling his thumbs. He is ready to close. His lender is ready to fund. The second lender forced the seller to pay $150 to get an extension that is good to next week. We told the second lender they cannot make the seller pay for anything in a short sale as a condition of short sale approval, according to California Civil Code 580e. One Main Financial did not care. It thumbed its nose at the seller and said: pay up or we won’t issue the extension.
Now, the negotiator at Bank of America is asking us to send him a letter from One Main Financial (the second lender) explaining how and why One Main Financial is servicing loans for Citimortgage. See, you can’t make up this stuff. As a Sacramento short sale agent, I see the most incredible crap go down at Bank of America. All one can do is send it to the Executive Office, write about it, and hope the the bank can eventually fix some of its problems.
Overall, Bank of America does a fairly good job with its short sales. But these FHA short sales leave this Sacramento short sale agent slack-jawed, shaking her head. I imagine this will close but not before we step over a few dead bodies. Forget the coffee, Bank of America could probably use some Viagra.
Go to The Kitchen Restaurant and Cancel Halloween
A Halloween alternative for those of us with homes in Land Park. Here is another option if you’re ever thinking about a way to cancel Halloween. My husband tacked a note to the front of our home in Land Park. It told visitors that werewolves lived there and we were out because it was a full moon last night. Perhaps you came by and spotted that note? The note also said if you took more than one piece of candy from the bowl on the front porch that zombies would eat your brains. Which reminds me that I have to see if there is a new version out of that Plants vs. Zombies computer game. No, there is not. Not until spring. Darn Pop Cap.
Our idea of canceling Halloween last night entailed going to The Kitchen Restaurant for a 4-hour dinner and a flight of wine. They call it a flight of wine because flying is exactly what you feel like doing after consuming all of that wine. True, you’re also stuffing food down your face to soak up much of that alcohol, but it’s still a lot of wine to drink with dinner. I shared my flight of wine with my husband, but he couldn’t drink much of it because he was our designated driver. This is a reason in itself to get married. Designated driver. Otherwise, both of you would have to take a cab.
The last time we were at The Kitchen was the day after Thanksgiving. My sister was in town from Minneapolis, so we hauled her and my niece out for a 7-course dinner at The Kitchen. As we were sitting at the counter at The Kitchen last night, my husband snapped a photo of me with his iPhone. He took the photo to send with a response to the text message my sister just sent him wishing us a Happy Halloween. He told her we were at The Kitchen. Except she had no idea where we were. I know her. She thought he meant we were huddled in the dark at home in our kitchen, avoiding trick or treaters. Because she knows us.
Nope, we were sitting at the counter at The Kitchen and spooning pumpkin bisque into our faces — followed by butter-poached maine lobster, swordfish, sea scallops, and a main entree of beef tenderloin with black truffle. I really enjoyed the apple pie dessert, with that delicious scoop of butter-chocolate crunch ice cream. All the ingredients at The Kitchen are farm fresh and mostly local. In fact, on Halloween yesterday, Mayor Kevin Johnson proclaimed Sacramento “America’s Farm to Fork Capital.” It’s true, he held a ceremony downtown, attended by all the top chefs in Sacramento.
I tell you the thing that really struck home with me last night was how passionate everybody is about their job at The Kitchen. There is a hierarchy but also a strong team spirit among the cooks and staff. There is distinct honor and respect among the workers. It’s clear that the job is serious business and everybody takes pride in their work. You don’t see that commitment to quality in many other establishments around town. In fact, you don’t see that passion in other professions, either. except maybe that of a Sacramento real estate agent. I care deeply, for example, whether my clients are happy at closing. When people say there is no pride in American jobs anymore, they should check out our restaurants in Sacramento.
When we got home to Land Park, we found our note still stuck to the front door. There were still a few pieces of candy in the bowl on the porch, too. They didn’t take everything. They also did not stomp on our Cinderella pumpkin. Yay! The kids in Land Park are a good bunch of kids.
Bank of America is Pro Short Sale
Bank of America has a message for underwater homeowners in Sacramento, it appears. That message is: Bank of America wants to do your short sale. People have heard all of the horror stories about the many, many months it takes to do a Bank of America short sale, and that is not always the case. In fact, it’s rarely the case. This Sacramento short sale agent can initiate and close a Bank of America short sale, from start to finish, in about 45 days. Even without a hardship. Yup, Bank of America is granting strategic short sales and all kinds of other short sales just to get rid of those loans, for whatever reasons.
For example, you might ask when is a HAFA short sale not a HAFA short sale? Because sometimes homeowners don’t qualify for the HAFA. There is a new law that says the banks must explain what constitutes qualification for a HAFA because that’s been left up to each bank to decide, and often that method is a complete mystery. Well, far as I can see, it still is a mystery. We can do our best-guess-scenarios here in Sacramento, and I have few theories myself, but nothing in concrete as to the exact criteria used. So, in that regard, nobody can really figure out if the bank is handing out crap or what because the bank still writes its own rules.
In any case, a HAFA short sale is not a HAFA short sale when Bank of America says it has switched to a Cooperative Short Sale. We started out with a HAFA application for a home in Natomas, a neighborhood in Sacramento in which almost every home is a potential short sale if it hasn’t recently sold. Somewhere in the middle, Bank of America switched the short sale to a Cooperative. If you ask the bank, it will tell you that you need to initiate the Cooperative short sale before you have an offer, not after an offer has been presented to the bank. It will also tell you it doesn’t do Cooperatives in which there is a second loan. But they make exceptions. This home had a second loan. I have, in fact, done other Cooperative Short Sales in which there was more than one loan, and that second loan was not held by Bank of America.
There are exceptions to everything. The banks decide what they will except and which variances they will not grant. That’s the thing about short sales. They use the rules when it’s to their favor, and they ignore the rules when it’s to their favor.
So, if you think you know exactly which end is up and what you are doing, then you are most likely not a Sacramento short sale agent working on a Bank of America short sale.
This Bank of America short sale closed yesterday as a Cooperative Short Sale, paying the seller $2,500 and releasing both the first and second mortgages without liability.
