Email ElizabethHow a HUD Section 8 Rental Receipt Can Mess Up Closing
Nothing like a HUD Section 8 rental receipt to mess up a buyer’s mortgage closing, and listing agents are often the last to know. Most people, for example, have little idea of what a Sacramento listing agent actually does, apart from lounging about Maui over federal holiday weekends and sticking a sign in the seller’s yard before leaving. They also often assume that once an offer has been accepted by both parties, most of the work is over when that is actually when much of the work begins.
There are often more negotiations after a purchase contract has been signed. That’s just the beginning in some cases. When a buyer can’t close escrow or attempts to renegotiate, that’s when most sellers are very happy to have a strong negotiator representing them. It’s when an agent earns her full-service fee. As a listing agent, I have to be fair to all parties, but I owe my fiduciary duty to the seller, always and foremost.
We were ready to close a concurrent transaction the early in the third week of June. A concurrent closing means the seller is buying another home and both the existing home and new home will close simultaneously. We matched the closing dates. Suddenly, without warning, the buyer’s file was kicked back from underwriting. Turns out the buyers, who had been living in a hotel for a while, had rented their previous home to a Section 8 tenant. The underwriter needed to verify receipt from HUD for rents paid and HUD had not even inspected the home yet.
This is when the buyer’s agent, like many agents, looks around for a simple solution. The simple solution was to extend closing another 30 days. Since the sellers were purchasing another home, a 30-day closing delay was not a satisfactory solution to the sellers.
Dan Tharp, my preferred mortgage lender at Guild Mortgage, helped to devise a strategy. He wasn’t involved in this transaction but he had the answer for us. The answer was to provide security for the underwriter and close the file pending post-HUD receipt, and advance part of the rent pre-closing. After delivering proper documentation requesting specific performance, we closed a day ahead of schedule, and the seller received another 48 hours to move. Crisis diverted.
Photo: lounging on the grass in Maui, by Elizabeth Weintraub
Four Seasons VS The Fairmont in Maui
It can be argued that the Four Seasons is better than The Fairmont due to the level of service provided by Four Seasons. If I were giving the two resorts star ratings, I’d give Four Seasons 5 stars and The Fairmont 4.5 stars because it doesn’t quite measure up to the ridiculous attention to detail standard offered by Four Seasons. The rooms are probably much bigger at The Fairmont (suites) but the service is remarkably different.
The guy at dinner last night said he had a request to chill each tomato slice individually on ice before serving a customer. My husband once offered a comparison that made me laugh so hard my guts ached. As though speaking to a waiter at The Fairmont when asked: “What do you need?” I need you to chew up my food and puke it into my mouth like you are feeding a baby bird. What? They would do it at Four Seasons, you know. Yup, it’s Four Seasons vs the Fairmont.
Except, I ordered a glass of champagne that did not arrive. Barbara did not receive her drink, either. But they did twice bring a salad that we expected to be served with our meal. They served steamed vegetables when I ordered roasted, and the roasted veggies were mushy. The waiter then topped off my glass of champagne, bought us a drink and sent over the manager to apologize. It’s not so much that a person can mess up, it’s how they fix the mess up.
Between Spagos and Duo, the service and the food was a notch higher at Spagos, we discovered. It’s such a big decision to decide where to dine. But we had no complaints about the skinny colada martini, rimmed with roasted coconut. We toasted our two closings yesterday. If you had to choose between the Four Seasons vs The Fairmont, you can’t go wrong with either one.
The Rolex Store at the Shops of Wailea
It was very unlikely that Barbara, my team member, nor I would buy anything in the Rolex store at The Shops at Wailea, but that didn’t stop us from entering. I enjoy looking at small trinkets to adorn my wrist that cost $30,000. To buy a Rolex, I imagine a person would need to develop either a blatant disregard for money or have lost all concept of money. The thing could cost $30 or add another 3 zeros, and it would make no difference because the price tag probably carries little meaning when a person has billions.
That’s why it’s a bit fun to let the salesperson show you items when you know that never in a million years would you ever buy it. You can say that to the clerk’s face, but they know better. They know even though you might never in a million years buy it, you are holding a credit card, therefore, it is possible that you might.
The lights in the store are designed to display the wares in all of their glittering goodness. I asked the clerk how they can sell a Rolex when so few people even wear a watch anymore. I wondered out loud if this was a business doomed to head some other direction, like IBM or Kodak.
That’s when the other salesperson in the store blurted out: It’s a legacy. It’s a timeless piece of art and beautiful jewelry.
They showed us a gold necklace made from smashed peas. Look, the clerk smiled longingly at the piece, it’s so pretty you want to pet it.
No, we didn’t buy anything. But I enjoyed their sales techniques.
Working as a Sacramento Agent on Aloha Time
Working in an Aloha state-of-mind should be recommended for all Sacramento real estate agents who are stressed out, overworked and exhausted, because it’s pretty much impossible to get all excited or worked up over normal day-to-day crap when you’re in Maui. I much prefer to be a Sacramento agent on Aloha time. Much of the time I do not let external factors bother me one way or the other because I am too busy to allot time to focus on minor irritations. Out of sight, out of mind, work on the next task at hand, is my motto.
There is always something new and exciting on the horizon. Just this morning, a red-crested cardinal landed on our balcony railing. I grabbed my cellphone to shoot a picture. Problem is with the ocean and palm trees behind the balcony, the cardinal was washed out. The picture didn’t turn out very well. But the cardinal will be back. We have another week here, and the odds are I will have another opportunity to catch the cardinal in a photo. Because I am a Sacramento agent on Aloha time in Maui.
Barbara says motivation is somewhat complicated for her. She knows, for example, that she needs to make what could be construed as an uncomfortable phone call to a guy she doesn’t really want to speak to, so she looks out at the ocean and temporarily spaces out making the call. But she is excellent at prioritizing tasks. Her list of people she needs to call is laid out in front of her, and her fingers finally whip across the face of her cellphone, and she does the deed. She is a Sacramento agent on Aloha time.
Because no matter what happens, she will work it out. If not right now, perhaps in an hour from now or maybe tomorrow. No big deal. We’re definitely working on Aloha time. Bring it on.
Closing an Escrow Against the Odds
I may have been riding ponies and yelling giddy-up last night but this morning my birthday is over and I’m just another old fart whose day of glory has passed. No more 20-year tawny for me today, me — who had the brilliant thought that if one glass was a fine way to end the evening, a second glass might be even more fun. Instead I have built-in radar that says, nope, you, young lady, need to go directly to bed, do not pass go, do not collect $200. Put that head on the pillow, NOW.
I am thankful for my built-in radar because it keeps me out of danger. I have pretty good gut instincts as well which I, at times, rely upon. It’s the reason we closed an escrow on Friday that probably would not have otherwise closed this month.
This was a transaction initially scheduled to close within the first week of June, not the end of June. Mid stream, the mortgage lender switched the financing from conventional to FHA because the buyer did not qualify. The underwriter discovered a foreclosure on record some 7 years past for one of the buyers and disqualified the buyer. Yup, guidelines can make provisions for waiting periods but underwriters can do what they want.
Then the file sat at the lender because everybody thought somebody else was working on it, or at least that’s the mortgage lender’s story and he was sticking to it. He went so far as to pull out the my-grandmother-died card, or wait, that might have been another transaction and these are probably guys without grandmothers, I may note. I dunno. What I did know was I had a very unhappy seller due to the financing for the buyers. She expected to close. She had to make another mortgage payment she wasn’t planning on making. She asked me for options.
The solution she liked best was to sell the home to another buyer. So that’s what we did. We signed a back-up offer with a second set of buyers and issued to the first buyer a Demand to Close escrow. The buyer’s agent was horrified. Said she had never received a Demand to Close escrow in all of her years in real estate. It won’t be the last, I offered. Not in this real estate market. The lender has the ability to make any file a priority, and it may as well be ours. They managed to pull a rabbit out of the hat and closed.
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