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Elizabeth Weintraub
What is a Short Sale BPO?
Back in the olden days of real estate, before short sales in Sacramento, you almost never heard the term BPO if you weren’t working in the REO market. The REO market means “real estate owned” and it’s an acronym. Refers to bank-owned foreclosure homes. But BPO can also apply to a short sale.
The way it works is this: When a Wall Street bank worth billions wants to know how much a Sacramento home valued at multiple hundreds of thousands is actually worth, instead of hiring an appraiser — a person most likely with a college degree, who has specialized training, knowledge and the experience to conduct real estate appraisals and receives a fee of $400 to $500 for this service — this bank instead might hire a Sacramento real estate agent, a real estate agent who quite possibly could have dropped out of high school and never sold a lick of real estate a day in her life, and pay this agent fifty bucks to do a BPO.
This is the infinite wisdom of our banks that helped to get us into this miserable state of affairs in real estate to start with. What what are ya gonna do?
Now that we have short sales, banks use the same principle to determine value. They hire a real estate agent to do a BPO. This acronym stands for Broker Price Opinion. Whether the home is valued by an appraisal or by a BPO understand one thing: they are both a matter of opinion. Albeit the appraisal is a bit more complex and calculated, but it’s only as good as the comparable sales that are used, in the opinion of the appraiser.
You ever notice how two people can look at the same thing and see completely different things? One person might look out the door and say, “It’s raining.” Another person might see clouds on the horizon, the sun peeking through and say, “It’s a beautiful sunny day.”
Nonetheless, the bank will accept the short sale BPO and base its decision, in part, on whether to approve your short sale on this price. But it’s only good for 3 months. After 3 months have come and gone, that value vanishes and becomes questionable, so the bank will want to acquire a new short sale BPO. A really clever bank negotiator who never wants to close a file can continue to let BPOs expire and drag the file on and on and on into infinity and beyond, Buzz Lightyear.
Get Your Short Sale Package Upon Initiation
Did you miss the earthquake drill yesterday? We were sitting in the doctor’s office waiting room when 10:18 had come and gone. Darn it. But then, until my husband told me about the earthquake drill, I had not heard about it. That’s because I don’t hang out on social websites during the day. Nope, this little hamster on the hamster wheel is busy wheeling and dealing in short sales and Sacramento real estate. Nose to the grindstone and all of that.
Still, I managed to miss observing the drill. Because if I had known about it, I would have wanted to observe. Certainly, nobody in the doctor’s office was doing a duck-and-cover. You’ve got to ask yourself, though, did anybody really believe that diving under your desk with your hands over your head would protect you against a bomb? A nuclear bomb? No, in the 1950s, you just did what you were told and you didn’t question it. It’s life experiences like this, the duck-and-cover, that has prepared me for my career-turn to a Sacramento short sale agent. It takes a special kind of person, I’m convinced.
Take a short sale package, for example. Way back in the early years of short sales, like 2007, I used to hand out short sale packages in advance to my clients. Sometimes, I would email the packages. Mostly these were financial P&Ls like a 710. Today, we have a ton of options at our disposal, but I don’t routinely send out a short sale package before we open the short sale file. The reason I don’t is because I don’t want my sellers to do any more work than they have to do. I want to limit the pain.
Not only do the requirements change from day to day, but the forms change, too. There is a short sale in Lincoln that I’ve sold 4 times now. The first 3 packages did not include this particular financial, but the present sale does. You may wonder why did Wells Fargo not require this and now it does? Legal crap. Sometimes, it’s one word in a document that changes.
It’s not just a Wells Fargo short sale in which the required forms and documents can morph. Bank of America has changed its third party authorization more times than I can count. I’ve run out of fingers and toes. So, when I don’t give you a short sale package in advance to complete, it’s not because I’m failing to be proactive or shirking my duty. It’s because I don’t want you to have to fill out one package and then be told you need to complete a different package. Especially those arm’s length affidavits that require a notary. I’m trying to save you time and agony. Because heaven knows there is enough agony in a short sale as it is.
Get Cash for That Sacramento Cooperative Short Sale
Not every person is cut out to be a Sacramento real estate agent. That’s a fact, Jack. In fact, some are unqualified to be in sales in the first place, and let’s not overlook the fact that some people think salesperson is a dirty word. Like, there is something wrong with sales or that if you don’t have the natural ability to sell then you can’t acquire that ability or wouldn’t want to. But when it comes to selling your home in Sacramento, a seller will increase his or her chances of maximizing profit potential and obtaining a fast sale by hiring a professional real estate agent.
In our Sacramento real estate market, often that means hiring a Sacramento real estate agent who knows how to sell short sales. You might think that any real estate agent can sell a short sale but that’s faulty thinking. Without jumping into a million reasons why that’s wrong, let’s just look at one reason. Like this seller in the Pocket. She had a good job and made a good income, and did not really have a hardship.
After looking at her situation, we devised a strategy. Because this Sacramento short sale agent knows her stuff. We put her home on the market in early September as a Sacramento short sale. A pre-approved Bank of America Cooperative Short Sale. It closed escrow yesterday. From the day the For Sale sign went into the yard to the day the buyer was handed the keys, it took 43 days. Start to finish. That’s faster than some homes sell and close that are not short sales.
The seller did not fork over her tax returns. She did not give Bank of America her bank statements nor payroll stubs. There was no hardship letter required. She had to make one phone call to say NO to HAFA and YES to the Cooperative Short Sale.
Bank of America paid two cash incentives on this short sale. The cash payment to the seller at closing was more than $12,800. No strings. Just: Here, take this cash. In fact, escrow wired the money to my seller’s bank account because she was on a plane when her home closed escrow. The seller received a cooperative incentive on top of an HIN Incentive. Yeah, I know what you’re thinking — it’s taxable. Yup. But yowza! It almost seems criminal and hard to believe that a seller can get paid to do a short sale yet it’s happening all over Sacramento, especially to my clients.
The bank did not approach the seller in this situation. This is an important component. Her Sacramento short sale agent figured out that the seller qualified and talked to the bank on the seller’s behalf. Bank of America wanted the seller to do a HAFA. But HAFA would have given her only $3,000, involved financial disclosures and made her life a total nightmare. Instead, the Cooperative Short Sale was fast, easy, no hassle and the seller put almost $13,000 into the bank at closing.
So, you tell me which was better for this seller, OK? HAFA or Cooperative short sale? I believe the Cooperative short sale wins hands down every single time. If you have a mortgage with Bank of America and want out, call Elizabeth Weintraub at 916 233 6759. It doesn’t cost you a dime out of pocket. In fact, it can pay.
Why, No, You Can’t Buy That Sacramento Home
Tell a person she can’t have something, and she wants it even more. Just seems to be human nature. The way things work. If Sacramento home buyers are interested in a home, all you have to say is they might not be able to buy it, and they break out in a sweat. I imagine their hearts begin to beat rather fast. I mean, I know that feeling. I am not immune to not always getting what I want.
There’s a restaurant in Chicago that I feel compelled to visit, and there are no reservations available in November when I will be there. It serves 23 courses for dinner. The only way to get a reservation at this restaurant is to hope a table opening pops up through Facebook. There’s a chance my husband and I won’t be able to go this restaurant. That will be a little bit disappointing, but it’s not the end of the world. You know why? Because there are other restaurants in Chicago and, like my mother used to say, think about the starving children in China!
OK, that didn’t help at all. But you get my drift.
Not having any inventory in the Sacramento real estate market is driving some home buyers nuts. They can’t stand it. I know because as a busy Sacramento real estate agent, I manage a lot of listings — more than some brokerages –and I get calls all day long about homes that are pending. Pending as in ready to close escrow. Solid offers from committed buyers, yet all of these callers want to know if the present buyer might change his or her mind. People might be off their rockers, but they’re not crazy enough to back out of a transaction when there is nothing else to buy.
All of the normal things a Sacramento real estate agent usually worries about are no longer much of a concern in this market. Home inspection? Spittooey. No problem. Long as the home is still standing and supported by four walls and a roof, they’ll take it. No seller concession? Who cares? Not today’s home buyers. You want a contingency release? Where do we sign? This is a fabulous real estate market for a seller and her listing agent! It’s not so hot for home buyers but it’s unusual, to say the least, to be on the other side of the fence for a change.
Equator Starts the Day for a Sacramento Short Sale Agent
When it’s 5 AM in Sacramento, it’s 8 AM on the East Coast. I get a head start on my day by updating my Sacramento short sales before people start calling. However, I am finding it is increasingly difficult to write my blog uninterrupted on a Tuesday morning because all of the short sale negotiators in Equator are up and at ’em first thing. It’s like they don’t touch their computer all week or something. They wait until Tuesday. My inbox begins dinging with Equator emails at 5 AM. I could not imagine looking at a file only once a week, but that’s how some short sale negotiators seem to handle their workload.
Many short sale lenders are using Equator now for processing short sales. We’re all anxiously awaiting for JPMorgan Chase to join Equator but it doesn’t seem to be happening. I keep hearing rumors that Chase will be on Equator. First, it was last summer, then by this fall, and it’s just not a reality yet. But we do have the top 4, which are Bank of America, Wells Fargo, GMAC / Ally and Nationstar.
The thing with Equator — as I was explaining yesterday in my presentation to the ballroom of agents at Lyon Real Estate’s FRED (Fun Realtor Education Day) event — is it over communicates. It used to send agents emails containing specific messages and those messages were also kept in a property folder on Equator. Now, for some reason, Equator generates an email to tell a Sacramento short sale agent that there is an email in Equator. And when the agent gets to Equator, the email directs the agent to a task. Except the task is not really always a task. I prefer the old method because I knew what I was getting into before I got there. It’s not always worth it to open Equator. Sometimes, the messages are pointless.
Not only are some of the messages pointless, the messages can also be “system generated.” A system-generated message will say things like somebody is reviewing documents. But nobody is really reviewing documents. Yet, I am not about to complain about Equator. No sirree. I know what life was like for this Sacramento short sale agent before Equator, and I never want to go back there.
It’s bad enough that I have to work on Bank of America FHA short sales outside of Equator. I don’t wish that horrible experience on any short sale agent. I love Equator and an Equator short sale. I am Equator Platinum Certified, not only for short sales but also for REOs. I received certifications for both. I don’t handle REOs, but you never know, one day I might. I have belonged to Equator since its transformation from REOTrans. It’s a lifeline for Sacramento short sale agents.
