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Elizabeth Weintraub
Representing Two Buyers for Land Park Homes
Representing two buyers for the same Land Park home doesn’t happen very often. But in our crazy Sacramento real estate market, it’s possible. Yup, an agent can represent more than one buyer to buy the same home. Especially with limited inventory. Our California Association of REALTORs team of lawyers have even designed a form for this called a DA — Disclosure and Consent for Representation of More than One Buyer or Seller. It lets an agent engage in dual agency, too, as well as disclose the terms and conditions of an offer (without a confidentiality agreement). When I read that document, I no longer wonder why the public has problems with trust issues concerning real estate agents.
Can you imagine a lawyer representing two different clients who were competing with each other? I work with a lot of lawyers. I’m not sure why lawyers tend to gravitate toward me but I like to imagine we speak a similar language; we probably approach the same subject matters in an analytical way. They know I will be direct. I suspect they appreciate that directness as not every person does.
There are some Sacramento real estate agents who won’t work with lawyers. They flat out refuse. They call lawyers “deal killers,” and maybe they’re worried a lawyer will sue them; I don’t know. The way I see it, I’m least likely to get sued by a lawyer, knock on wood. And I really love the fact I get to tell them that I can’t give legal advice. Especially when they ask me for legal advice. But I also realize that lawyers specialize in certain types of law and not every lawyer knows much about real estate, much less short sales. But they do understand strategy. I respect lawyers, and I like them. I wish all my clients were lawyers. That would be a happy day for me.
I recall a few years ago I was working with several lawyers to buy homes in Land Park. This was back when law firms were flourishing and hiring new lawyers, bringing new talent to Sacramento. As luck would have it, both of these lawyers decided they might be interested in buying the same home. Let’s just say I was not about to whip out the DA form. Instead, I explained the problem to both of them individually.
I suggested one of them could choose to work with me and the other could choose to work with a different buyer’s agent. However, as I reminded them, the lawyer who drew the short end of the stick would be competing against me in negotiations. Which Land Park agent did they want to represent them? This Land Park agent or my associate? Put that way, one of the lawyers decided to look at a different home and keep me as their agent. The other lawyer bought the home through me.
Not every agent employs this approach. In fact, not every agent who represents more than one buyer for the same property even uses the DA form. I received this week two different offers on the same listing from an agent, and no DA form with either offer. The second offer was much better than the first offer. Coincidinky? We just don’t know.
Bank of America Fannie Mae Cooperative Short Sale
Why would Bank of America issue a denial for your Fannie Mae Cooperative Short Sale? It might astonish you to learn that not every Bank of America loan will qualify for the Cooperative Short Sale process simply because your home is underwater and the investor is Fannie Mae. Moreover, at any time in the short sale process, even if you’ve signed a Borrower Acknowledgement of Interest, Bank of America can still yank out that rug from under you. As a Sacramento short sale agent, you would not believe the things I witness first hand. But then, I close a lot of Bank of America Cooperative Short Sales in Sacramento. Sooner or later, I’m bound to see a lot of crap.
Just last week, I accepted a counter offer in Equator for a Bank of America Fannie Mae Cooperative Short Sale. Typically, this is the point in the short sale when, shortly thereafter, the approval letter arrives. I thought the short sale was finished and we were about to close. Nope, next thing I discovered Bank of America denied the Cooperative because, low and behold, Fannie Mae released Bank of America as a servicer. Now, Fannie Mae has supported Cooperative Short Sales at Bank of America in the past. This was an odd move, from where I sit. So, since Bank of America was no longer the servicer, the short sale will have to start over through the new servicer, which is no stranger to short sales, Seterus. Don’t even get me started on Seterus. That’s another blog.
In another Fannie Mae Cooperative Short Sale, we have a problem with the second lender, which won’t back down to Fannie Mae’s demands. This is another file in which Fannie Mae is about to release Bank of America as the servicer and hand over the file to somebody else. Why is Fannie Mae dumping these Bank of America files? One would think that files in the middle of a short sale would receive some kind of priority. In any case, this is one reason your Bank of America Cooperative Short Sale could be denied — because Bank of America is no longer the servicer.
It’s just been the last 30 days in which I’ve noticed a change in the Fannie Mae Cooperative Short Sales at Bank of America. Generally, Fannie Mae will authorize a higher payment for the relocation incentive than a traditional Cooperative Short Sale, which is $3,000 vs $2,500. Then, if you get the HIN Incentive, that could bump up the cash payment tremendously. I have some clients who qualify for both incentives and are getting paid $15,000 or so.
On the other hand, the other GSE, Freddie Mac, does not participate in Bank of America’s Cooperative Short Sale. You would think whatever guidelines Fannie Mae comes up with would be followed by Freddie Mac, but it doesn’t always work that way. It doesn’t work that way in a HAFA short sale. A Freddie Mac HAFA short sale is very different from a Fannie Mae HAFA. This means if your loan is held by Freddie Mac and serviced through Bank of America, you cannot qualify for a Cooperative Short Sale.
I discovered an Elk Grove short sale would not qualify for a Cooperative as well because the investor was Aurora. The homeowner thought that Bank of America was the investor. Morever, Aurora says it has a policy that if the homeowner has filed for bankruptcy and completed a bankruptcy, it won’t let the homeowners participate in HAFA. The devil is in the details. The devil is always in the details, which is why it’s a good idea to hire a Sacramento short sale agent with experience. Why take a chance on a denial letter for your short sale?
And be careful if you’re trying to pursue a Cooperative Short Sale through Bank of America in which Fannie Mae is the investor. Although, this is only a few short sales in which Fannie Mae has released Bank of America as the servicer, it could be the initiation of a new policy. Even scarier is the fact there is a huge profitable market for buying and / or insuring bad loans. Not much has really changed, you know. But that’s a blog for another day.
The Problems With Carbon Monoxide Detectors
This Sacramento real estate agent is not out to solve the world-wide problems of death, destruction and mayhem, but it would be nice to figure out how to ensure a carbon monoxide detector is installed in a home at the time of sale. The small things. I like to focus on the smaller picture because those things I should be able to do something about. Making sure carbon monoxide detectors are installed is not really a newsworthy or noble cause. Not like the founder of Facebook, Mark Zuckerberg, electing to personally kill, clean and consume his own food for a year.
I can barely cut off a fish head and clean out its guts. If I had to shoot my own cow or strangle a chicken, I’d give up meat. Then I’d starve to death because I don’t much care for hard, raw vegetables like eggplant or zucchini, for example, veggies that multiply and are easy to grow. I’m no Sarah Palin. Nope, nobody would ever confuse us, thank goodness.
Neither was my mother. My mother as a teenager took a job in a chicken plant. It involved plucking the feathers off of a chicken — after wringing its neck. This was in the 1940s. I would never eat chicken again if I had that kind of hands-on experience. I like my food not to resemble the animal from which it came. Let’s face it, some foods are better off being disguised, like bacon. It would be so much easier for me if I were a committed vegetarian but the truth is I like being carnivorous. I just don’t want to get all up-close and personal about it.
I have to get up-close and personal about carbon monoxide detectors, however. My job requires it. Whenever I list a home in Sacramento, I have that “talk” with my sellers. I explain what happens when the buyer’s appraiser comes out. The first thing the appraiser looks for is a reason not to be in the home, and that reason to leave is no carbon monoxide detector. If the carbon monoxide detector is missing, the appraiser can’t finish the appraisal. This means he gets to charge another $125 to come back.
When that happens, the buyer yells at her buyer’s agent. You know the direction crap rolls. This means the buyer’s agent calls me to yell. Although, I will not yell at my own client. Sometimes, I suggest that sellers put a sign on the wall with an arrow pointing down to the receptacle where the carbon monoxide is plugged in, especially if it’s a spot that is not easy to see.
When the California law requiring carbon monoxide detectors in a home went into effect a year ago in July, this forward-thinking Sacramento real estate agent bought 50 carbon monoxide detectors and stuffed them in my front trunk. If I ever rammed into the rear end of some SUV, the road would be littered with dozens of carbon monoxide detectors, but at least I’d never be without a carbon monoxide detector when I needed one. So, I used to just give them to my sellers when I listed their home. But that didn’t necessarily solve the problem.
I have almost poked out my eye on more than one occasion trying to open that theft-proof packaging. Once, I stabbed myself in the chin and drew blood, and then ran around the vacant house trying to find toilet paper. Why do people take partially empty rolls of toilet paper with them when they move? How expensive is toilet paper? The other problem with that solution is when the sellers moved out, they take the carbon monoxide detectors with them as well. By accident.
This is a huge problem for home buyers because they are the people who get stuck paying for a second trip by the appraiser. Short of handing a buyer $125 when they write a purchase offer, I think instead I’ll try to be more diligent. That seems the easier path.
CHDAP Loans for Sacramento Home Buyers
Buying a home in a seller’s market, especially in our Sacramento seller’s market is super tough. Which is worse, you think? Being a CHDAP buyer in a seller’s market or being a VA buyer in a seller’s market? Because no doubt about it, we are in a seller’s market in Sacramento. And the buyers who really get my empathy are those who are struggling with having to write offer after offer after offer, and getting none of those offers accepted.
Fortunately, the Elizabeth Weintraub Team members don’t experience much of this. We often find our buyers get a whopping edge in negotiations. We’re experienced, and that alone is a major factor. Sometimes, other listing agents advise their sellers to accept our offers because they know us. They know we will perform. If it’s a short sale, our buyers will wait for short sale approval. They are educated about the short sale process. Our buyers are prequalified and have the preapproval letter and proof of funds to show it.
But I hear from other agents whose buyers are not so lucky. One agent last month told me she had written 15 offers for her buyer. It was tough because her buyer was relying on an FHA loan. We accepted her offer; most sellers are sympathetic with FHA buyers because they once stood in those shoes. The CHDAP buyers, however, are relying on down payment assistance because, for whatever reason, they often don’t have enough money to buy a home. VA buyers are different story. They are not required to put any money down but it doesn’t mean they don’t have it.
CHDAP stands for California Homebuyer’s Downpayment Assistance Program. It helps first-time home buyers with the downpayment and / or closing costs. There are income limits. CHDAP loans take longer to close, often 45 days or more. In a short sale, many lenders expect to close 30 days from approval. Some short sale banks will not grant extensions. This makes buying a short sale extremely difficult for CHDAP buyers. Moreover, in a competing multiple-offer situation, a CHDAP buyer is very unlikely to win when pitted against a cash buyer.
I question whether CHDAP is the right choice for a first-time home buyer who wants to buy a short sale in Sacramento. It might be better, depending on the situation, for a home buyer to scrape up the downpayment, ask the short sale seller to pay their closing costs and be done with it.
Give the Seller Time to Accept Your Purchase Offer
When you’re buying a home in Sacramento — or anywhere else in California, for that matter — you should give the seller enough time to accept your purchase offer. This sounds like a simple concept, but it’s not. It’s more complicated than you might think. There are two things going on that affect the legality of your offer acceptance. You’ve got the time period in which the seller can accept your offer before it expires, and you’ve got the person to whom your offer needs to be delivered to be considered “in contract.”
You can easily lose a home over offer acceptance and offer delivery. In our California C.A.R. purchase contracts, this acceptance and delivery is discussed in paragraph 29. If an agent does not insert his or her name as the agent for delivery, the purchase contract is not considered delivered until the buyer receives the offer in his or her hands. If you want the deal to be done quickly — over and sealed — then the agent’s name should be noted in paragraph 29. But most important, give the seller enough time to accept the offer. Because anything can and does happen in real estate.
In the old days — the days of bellbottoms and stinky patchouli oil — agents used to write offers that expired “on presentation.” Sellers had all of 3 seconds to decide whether they wanted to accept an offer. There was no sleeping on it or I’ll get back to you. It was Take it or Leave it.
Today, we seem to be a much gentler bunch and, by default, our standard purchase contracts give sellers 3 days to ponder whether to accept, counter or ignore an offer. However, when those 3 days come and go, the purchase offer has expired. If you’re in the midst of buying a home in Sacramento, you don’t want your purchase offer to expire. Neither does the seller.
My sellers of a regular home (not a short sale) in the Sacramento area put that home on the market just before leaving for vacation. They figured this would give buyers plenty of time to view their home, without any inconvenience on the sellers’ end. The MLS comments to the buyer’s agents informed those agents that all offers would be reviewed on the day the sellers came home. That day is clearly noted in MLS.
So far, the first 5 offers will or have expired. We will be staring at expired offers when the sellers come home because the buyer’s agents did not give the sellers enough time to accept the purchase offer. Nobody read the MLS comments! If you’ve recently signed a purchase offer to buy a home in Sacramento and haven’t heard anything from your agent, read paragraph 29. Maybe your offer wasn’t rejected. Maybe it has expired.
