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A Fixer Home Selling As Is In a Probate Process
Today we would like to discuss a fixer home selling as is in a probate process. This was a recent sale on a listing where the seller was a “probate administrator with full authority.” I could write a book on selling probate listings but, I will stick to the as is portion of this sale as it is most interesting yet often confusing for buyers. From the photo you can see the exterior condition. There were also interior issues.
The seller left behind quite a bit of personal property in the interior, which we had to deal with. Also, due to dust, molds or other issues, these listings can require Hazmat.
Probate properties are sold as is, as a general rule. Also, sellers must declare if there was a death in the property within the past 3 years. To show a property in this condition, a seller may have to do some type of remediation prior to us marketing the property. So, this property had some remediation work completed before going on the market.
Also, as the seller had passed away, his payments had gotten behind so the property was in foreclosure. The foreclosure process, once a Notice of Default (NOD) is filed, is public record. We can tell if a home is in foreclosure because the NOD is shown on the tax profile (most of the time).
In this situation, we had a very short window to cure the loan default, so acquiring a hard money loan became urgent. I know several companies that do hard money loans but they usually require a minimum loan of $75,000 – $100,000. This property needed less funds and these are expensive loans with fees based on loan amount. Fortunately, I know a source for this type of loan. In fact, this particular hard-money lender used to flip homes. That company was willing to loan this estate the funds to pay off the delinquent liens and cure the foreclosure action.
The buyer was very committed to purchase the property. Also, the buyer’s agent was familiar with the area. She knew the importance of buyer’s inspections such as a well and septic. During the inspection process, a local company inspected the septic and found it was not working. They had to additionally bring in a backhoe. Further complications, it had been snowing at this elevation and there were very icy road conditions. A backhoe was not easy to arrange. The extent of the repair was extensive and the estimate, expensive. The even larger looming issue was it could be months before the work on the septic could be completed due to weather. Would the buyer move forward with these issues?
This defective septic system was a surprise to everyone. The estate attorney, the professional fiduciary, and the heir were all informed. I suggested a credit be considered as it was the request of the buyer’s agent. The reason for this credit was to encourage the buyer to continue forward with the purchase, in lieu of cancelling. The parties all agreed a credit was in order to provide a close of escrow as soon as possible. An immediate closing would prevent the estate from incurring any further costs or any other expensive surprises. With the winter weather conditions, a hard money loan due in one year, a septic that may not be operational for months, and property insurance issues, we needed to close asap.
Oh, yes, I forgot to mention the insurance challenges. The seller researched many insurance companies. Dealing with a very high fire rating for the area and an unoccupied property, these two items prevented most insurance companies from providing full coverage. A California basic fire policy was obtained to prevent a major loss from fire. Due to all of the recent California forest fires, all agreed there was immediate need for fire insurance to be in place. This is all part of listing a fixer home selling as is in a probate process.
We finally closed escrow and the buyer was thrilled to own the property. The buyer’s agent did a good job of completing inspections and keeping her side of the transaction moving forward. The probate attorney was fabulous to work with, too. In fact, we sold the property with all the personal property inside, including a truck and a trailer in the yard. The attorney completed all the additional documentation for the personal property to be included in the sale, without warranty expressed or implied. The professional fiduciary and her team were top notch, I cannot say enough kudos about their expertise.
As you can see, this was not a traditional real estate sale, this was a probate. Being declared an Expert Witness in probate court, I am often selected to work on very complicated cases. This is because I have been selling probate properties for over 10 years. It is a sub-specialty practice I enjoy. Closing a fixer home selling as is in a probate process is no easy task. Expertise counts here as mistakes are not tolerated within the probate court. Everyone is expected to complete their official duties in a professional and competent manner.
If you have a potential probate sale, a successor trustee sale, a conservatorship sale or a traditional real estate re-sale home, you can feel confident in the Weintraub & Wallace team to close the escrow. We are a solution-based team. Call us today at 916-233-6759.
— JaCi Wallace
Is Meeting the Real Estate Appraiser at the Property Important?
Is meeting a real estate appraiser at the property important for a listing agent? This Sacramento Realtor thinks so. Yesterday, I had a call from an appraiser. He was requesting access to a pending East Sacramento listing of the Weintraub & Wallace team at RE/MAX Gold. We met yesterday at 11:00 AM.
In fact, after offer acceptance, I had changed the access notes in MLS to appointment only. This ensures the appraiser does not make entry without my attendance. The reason for this is so that I can ensure he has comparable sales to support the sales price. Additionally, it gave me the opportunity to provide a list of upgrades and replacement dates of systems such as heat/air, roof, and sewer.
Now, the fact we had multiple offers on the property was indicated in MLS, but not every appraiser believes that should afford a price well over the list price. I prepared a market analysis showing sales in the area, attached to the list of upgrades that I gave the appraiser. It is never a guarantee of appraisal value, to offer information to an appraiser, and meeting the real estate appraiser at the property doesn’t always turn out the way we want. However, ask yourself if the above actions are important, rather than just letting the appraiser use the lockbox with no information whatsoever?
As a top producer, we always go above and beyond the typical service level. Our seller lives out of state and has put his faith in us to act on his behalf. We put his interests above our own. Not only do we believe this is important for out of state sellers but for every seller, even if right next door!
Most of the time, we find that meeting the real estate appraiser at the property is a good idea. You now have enough information to decide for yourself. Don’t guess with your real estate sale, call Weintraub & Wallace Realtors today at 916-233-6759!
— JaCi Wallace
Why the First Offer Often Wins in Sacramento Real Estate
As a big listing agent in Sacramento, I know first-hand it is common that the first offer often wins in Sacramento real estate. But buyer’s agents tend to disagree. Not sure why except that they are vested in having their buyers win, and perhaps they are not thinking through the entire situation. You hear it in their voices when they say, “Oh, maybe we’ll wait until after the open house.”
For what? For more buyers to submit offers? To become a speck of dust in the pile of offers? What are they waiting for? Offers, no offers, makes no difference.
Not only that, but sometimes agents sabotage their efforts from the get-go. A buyer’s agent called another listing agent recently to disclose that his client was part of a profession known for causing problems. Followed it up by asking about the cracks in the exterior stucco (all stucco has cracks), and making other comments that made the agent feel like this guy was gonna be a PITA. Not a smart move, you know, telling the listing agent you are a PITA and your client is a potential PITA, too.
If agents would just think through what happens, it would be easier for them to properly advise their clients. Be the first offer. The first offer often wins.
Say a home goes on the market on Friday with an open house scheduled for Sunday. Buyer tours on Friday and loves the house. But the buyer’s agent wants to wait to write an offer. I say no, write the offer right now. Write that offer although it is already Sunday afternoon and there are 2 other offers, because that could very well happen. Submit it now.
As a top listing agent, I am likely to advise my seller to wait until Sunday before making a decision. Because that is in my seller’s best interest. But the seller might love the offer and not want to wait. There is always that possibility. Odder things have happened.
However, if the seller takes my advice and waits, what do you think the seller will think when she wakes up on Saturday morning? She will second-guess her decision, wonder if she made the wrong call. Further, she will spend most of the day and the following day thinking about this wonderful and patient buyer, probably feeling a bit uneasy that she is making the buyer wait.
Come Sunday, even though there are several other offers, which buyer does the seller feel closest to?
Bingo. The first offer. Because the first offer often wins.
Damned if You Do and Damned if You Don’t
When a stranger calls for free advice, the common dilemma of damned if you do and damned if you don’t, makes it difficult not to hang up. Because hanging up is my solution for handling most irritants. Way back when I moved to Sacramento and was so excited just to get a phone call, I would even talk to telemarketers. I was polite and sweet and asked them to put me on the national do not call list. Today, not so sweet. Today I get so much crap, so much spam and solicitation calls, the best response I can muster is to hang up.
Why? Because if you mutter one word, #1) it’s a time waster, and #2) they will use it against you later and 3) nothing good can come from a conversation with another’s agent client in a foreign market. Further, if it is an unsolicited sales call, little is all that new or fabulous that you need to hear it described to you from a stranger you do not know and from a person whose sole purpose for continuing the conversation is to profit from YOU.
However, being in real estate, you’re pretty much damned if you do and damned if you don’t. Because if you don’t answer your phone, you could miss a call. Many potential clients will just call another agent if you send the call to voice mail. They have little patience, and they want an answer now. Hell, if I called some random agent who did not answer, I’d call somebody else, you can bet on it . . . and I know the value of good agents.
The problem comes into play when a caller asks if they can ask you a question. You think to yourself, sure, I have plenty of answers, perhaps one of them will fit this particular situation. And then the question has to do with an existing transaction. Sure, the caller may say it’s a hypothetical situation, but it is understood by both parties it is a real situation. Which means it is not a hypothetical situation.
If, as a Sacramento Realtor, you take time to explain the Realtor Code of Ethics and why we are prohibited from interfering in another’s transaction, you may come to realize the caller does not care about you nor your integrity. Nope, the caller wants an answer from you. No matter how it is phrased, you still take a chance they will run over to a profile somewhere and post a mean-spirited “review.”
There is no upside to it.
None. Whatsoever.
If you try to educate, the caller will argue. Then, they tend to get their knickers in a twist because you won’t cooperate with their demands. So, in these damned if you do and damned if you don’t situations, agents would be much better off just to hang up. Don’t offer anything. On the one hand, you don’t want to be accused of violating the Code of Ethics, on the other, there is no money in it for you. And a bad “review” is just waiting to happen.
People experience dropped calls all the time. THAT they can deal with. Explaining why you cannot help a stranger, big waste of time. Some of these people can make you regret that you even answered your phone. Remember, too, you are not a white knight.
So right in the middle of delivering a warm, lovely and inviting sentence, hit the red button. Then go to Recents and block.
Some 2005 Sacramento Home Buyers Are Still Underwater
Do you believe some 2005 Sacramento home buyers are still underwater? By that I mean they cannot sell the home for the amount they paid in 2005. Not that they need to do a short sale. Although in some instances, it can be pretty close to not being able to pay all the closing costs and mortgage, most of these sellers can squeak by. They just don’t make any money on their investment.
You might wonder how does this happen? How is it possible that 2005 Sacramento home buyers are still underwater when we’ve had such great appreciation? One of the ways this can happen is to pay too much at the time of sale. Another way this can happen is the sales price at the time of sale did not reflect the way buyers look at homes today.
Many 2005 sales were sold strictly AS IS and home buyers, in the heat of the market frenzy, bought homes without inspections, waived appraisals and overlooked remedying expensive pest reports. Which, of course, is not happening today. In today’s market, not only will buyers refuse to waive or ignore these reports, but they will hit the sales price too. On top of refusing to buy a home without updates.
Welcome to 2019 Sacramento real estate.
One of my former sellers bought a home at the height of the market. Suspecting they paid too much at inception, I pulled the comps within 3 months of his closing and presented the findings. The findings suggested he paid $50K too much, based on the comparable sales. But they also lost about $100K due to the condition the home, by which today’s buyers judge and reject.
Another potential seller is very tight on her equity in Natomas. She cannot sell for the amount she paid, but at least she won’t have to pitch in any money to close escrow. Just when we think that 14 years ago should have been enough time to recoup our investments, it’s important to note that notion does not hold true for everybody.
Because some 2005 home buyers are still underwater today. In case you think appraisals will save some of these situations, it most likely will not. Not every neighborhood features cookie cutter homes. Those with unique homes are generally hurt the most because it’s easy to pay too much in these areas. Which is why you need a specialist.
