Email ElizabethGuiding Sellers to Correctly Complete Seller Disclosures
Talk about dumb and dumber regarding seller disclosures and an irate buyer. I don’t know what’s worse — that a buyer could think that a real estate agent would be so dumb as to complete a set of disclosures on behalf of the agent’s seller or that the buyer could believe that an agent could be so much dumber as to complete them incorrectly. On top of which, it’s against the law for an agent to prepare a seller disclosure. But that’s what a buyer accused a Sacramento listing agent of doing without so much as batting an eyelash. That’s enough to make one feel incredibly empathetic for the poor buyer’s agent who probably has to put up with much worse crap from the guy.
When I take a listing, I discuss disclosures in depth with my clients. We talk about material facts and whether something small and insignificant needs to be disclosed. Most of the time, the answer is yes when you wonder if it needs to be disclosed — unless it doesn’t apply at all, and I’ve seen a few of those. The seller might ask about a fire that happened years ago on the other side of town, something that doesn’t affect his property. But if something affects your property in any form, shape or manner, then disclose it.
I once made a seller so paranoid about disclosing that he composed a small horror novel and delivered it to me — pages upon pages of stuff that might happen, ending with the foundation could collapse and the walls could cave in. He was just thinking about stuff that could happen, which wasn’t at all what I meant when I told him to disclose. Now I was stuck with that disclosure because I couldn’t send it back or pretend I never received it. I was required to give it to the buyer.
You might wonder why, why would I have to do such a thing when I represent the seller? I have to do it because I am required to disclose everything I receive. I must also treat both sides honestly. I can’t take it upon myself to choose which documents the buyer sees and what the buyer doesn’t see. The buyer sees everything.
If a neighbor calls to say his fence is on my seller’s property, I disclose it to the buyer. You’d be amazed at how many neighbors are defiant about such matters and wrongly believe that agents care about their opinions. I don’t disclose it as a fact because I don’t know where the property lines fall, but I do tell the buyer the neighbor says the property lines encroach. It’s up to the buyer to investigate or otherwise perform due diligence.
Still, guiding sellers to complete disclosures correctly is sometimes a little bit like herding cats. If you have a question about a disclosure, be sure to ask your agent for help. That’s what we are here for. Sellers tend to fret far more about the disclosures than buyers. Except for that one guy who is probably making his buyer’s agent’s life a living hell.
Reflections on Music and Bell Tolls of Sacramento Real Estate
This morning I’m thinking about music and for whom the bell tolls in Sacramento real estate. Way to make an old person feel old is to read headlines in the About.com newsletter: What to bring to a music festival. If you don’t know, maybe you don’t deserve to go. Oh, damn, I left my stash at home, along with my sunscreen, whatever shall I do? Most of the music festivals I ended up at like Kickapoo Creek were all at the spur of the moment. Hey, ya wanna go? Yah, sure, why not? Perhaps I should put on some clothes?
From Aerosmith to Tori Amos, the nostalgic ’90s tour. Hey, the 1990s were my second wave of really good music, after moving out of the 1960s, and now it’s nostalgic? Crap. Plus, I hate to tell those guys but Aerosmith to Amos is still in the A’s, they didn’t move very far. Whatever happened to ZZ Top? Oh, right, they morphed into those Duck Dynasty guys. I can’t tell them apart. I doubt anybody else can either.
You miss a lot when you’re an agent selling real estate in Sacramento. If you sell a lot of homes like I do, something has got to give in your life. You can’t do it all. There are priorities. Fortunately, I have a husband who continually introduces me to new music or I would live in a perpetual vacuum.
I noticed also this morning that my number of listings in Sacramento are quickly dwindling and moving into pending sales, which means I need to pump up new listings. Back in the old days, like a couple of years ago, it wasn’t unusual for me to manage 70-some listings, but due to the low housing inventory in Sacramento this spring, that number has dropped into single digits. I’m still on target to sell another 100 homes this year, just like last year, which amazes me even as I type. It sounds so unreal.
The price points are up in Sacramento real estate, however. That’s excellent news for sellers. And I sold two more homes over Memorial Day Weekend, which will make for a huge June closing month, in the double digits. Just about any real estate agent can flip a home into escrow these days; it’s getting those sales closed that takes extra effort and expertise. Laser-sharp focus. Fortunately, I have 40 years of real estate experience under my belt to draw upon.
A client emailed me over the weekend to say she is ready to start looking for a home to buy. I have hundreds of clients who have sold their homes as a short sale a few years ago and now some want to buy a new home. She was delighted that I immediately responded to her request and commented on how much she appreciates that level of service, just like the old days. That’s what a top Sacramento real estate agent does. She responds and doesn’t leave people waiting.
And then she fondly recalls that long ago summer cruise down the St. Croix River with the Goo Goo Dolls. It seems just like yesterday.
Are Real Estate Appliances Included With the House?
A thorn in the side of many Sacramento real estate agents is when home sellers and buyers decide to include personal property such as a refrigerator, washer or dryer in the purchase contract and make the real estate appliances included with the house. Other buyers sometimes go after after furniture. A funny story: I was guilty myself once of asking the seller in the purchase contract to give me her dining room table, and she refused. Then, when we were up against closing, she suddenly discovered the table would not fit into her new home and desperately wanted to leave the table behind.
What made you think I wanted the table? I asked, completely spacing out that I had previously demanded it. I didn’t want the table. I asked for it so I would have something to give up in exchange for a better price. Her stinkin’ table was ugly, too. I would have had to pay somebody to drag it out of the house or post it on Craigslist as a free item to the first person to come get it.
Leaving the appliances behind or taking the appliances with you is a double-edged sword. You’d think a buyer would be happy, for example, to possess a free and working washer and dryer, but not everybody is thrilled if a seller leaves behind the washer and dryer. I had a home in Elk Grove close a few weeks ago in which those appliances were not addressed in the purchase contract and the seller left them for the buyers. The buyers made a big stink and didn’t appreciate the gift. Too bad, so sad, as we used to say as kids.
On the other hand, if a buyer seriously lusts after the refrigerator, it should be noted in the purchase contract by checking the box that the refrigerator stays unless, of course, the seller doesn’t want to leave it. Then it could become the contention point during negotiations. That seller might suddenly arch her back against the ‘frig, arms spread, palms down: uh uh, this is my cheesy poof. During multiple offers, if one offer demands the refrigerator and the other does not, the seller might gravitate toward the buyer who is willing to purchase her own danged refrigerator.
Every transaction is different. If the MLS listing notes that the refrigerator stays but the seller takes it, there is not much a buyer can do about it. A buyer cannot rely on MLS notes. The court says if you want that refrigerator, you better get the transfer of that refrigerator in writing. A refrigerator is personal property, it is not a fixture and it does not automatically convey with the house.
Is it True a Sacramento Listing Agent Must Present all Offers?
An agent asked last week what he could do when a listing agent in Sacramento refused to present an offer to the seller. Well, he could print out a photo of that listing agent’s mug, draw devil horns on the head, tack the picture to a wall and throw darts at it. That’s one solution. He could also report the listing agent to the Board of Realtors and the Bureau of Real Estate. It’s a violation to withhold an offer. Listings agents are required to present all offers to the seller upon receipt or as reasonably as they can thereafter. It doesn’t matter if the home is already pending, either. An offer comes in, that purchase contract has gotta go to the seller.
A listing with an “active short contingent” status is especially suspect because that status, by its very nature, attracts offers. Agents who refuse to present offers or say no offers are accepted for an active short contingent status in MLS can find themselves fined by MLS as well for violating its guidelines. However, listings of any status are not exempt from a listing agent’s duty to present all offers.
It also doesn’t matter if the purchase offer is written on a roll of toilet paper, the listing agent must deliver the offer to the seller. Real estate agents don’t have the ethical nor legal right to decide which offers the seller gets to see and which can be withheld. Not our decision. But you’d be amazed at how many Sacramento listings agents don’t understand this simple procedure or were never informed of its necessity.
Something else some buyer’s agents don’t realize is the rejection on page 8 does not need to be initialed nor signed by the seller. It is not required. If the seller rejects the offer, no signature is necessary. The listing agent is not required to return a page that shows the seller has rejected the offer by an initial or other acknowledgement. It’s only a courtesy.
An email from the listing agent to the buyer’s agent detailing the outcome of the offer is sufficient. If buyer’s agents try to demand a written rejection by the seller, basically they’re saying a) they don’t understand how purchase contracts work, and b) they don’t trust the listing agent — neither of which is likely to endear them nor their buyers; it’s just stupid and insulting.
If you suspect an offer was not presented to the listing agent, the first step is to ask your buyer’s agent or manager to speak to the listing agent’s managing broker. Brokers are responsible for the actions of their agents. I’d say that most listing agents in Sacramento realize they must present all offers and comply. It’s unusual for the opposite to happen. But bottom line, if you’ve irritated the listing agent, it probably doesn’t really matter what else you do. A complaint will just bring personal satisfaction and help to raise the bar. It won’t get your offer accepted. That’s the real world part.
Why Home Buyers Won’t Buy a Short Sale in Sacramento
Like any other home on the market today, even the few short sale homes need to be highly desirable in some way to entice a home buyer to buy a short sale in Sacramento. Price alone won’t do it because the short sale lenders will demand market value. I get emails from agents who ask if I would consider wasting my time and the seller’s time to submit garbage offers on behalf of their greedy little buyers who love to lowball, and you’ve got to wonder what planet these agents live on. As additional information, the agents might offer up the fact they’ve been successful with this approach once years ago, like anybody cares.
Oh, geez, thanks for telling me. I smack my head. Dang-nabit, I had no idea.
They might say let me tell you about my buyer. No, don’t tell me. I don’t care. I don’t want to hear about his or her motives, angles, mission. I care only if the buyers are willing to do what it takes to get the lender to approve the short sale. Will they wait for approval and not cancel? An agent asked yesterday if it was OK for the buyer to cancel after I worked my tail off to obtain the short sale approval letter, in the event there was something about the property the buyer didn’t like. Sure, I replied, but be aware that I will then drive over to that buyer’s home and slash the tires on his car. Oh, he laughed and laughed.
Wow, we really want to take that offer. The buyer sounds so dedicated.
Today’s buyers, most of them, don’t want to wait for the short sale process. If they do decide to buy a short sale, it’s because the home is unique and it’s the only one like it on the market for miles around. Other short sale buyers are those who have a home to sell, and they are are buying contingent on selling. No fuss, no muss, no risk. If the contingent home is my listing, for example, I know their home will sell because they will be realistic, so those generally work out. But there is not a flood of buyers for short sales today.
I sold a Victorian short sale home in downtown Sacramento a few days before I left for my long winter vacation early last December. I worked on that short sale while enjoying an oceanfront view and warm breezes. Everybody was happy at the inception. We submitted all of the required paperwork to both banks: to the Bank of America short sale department and Chase. Chase had recently joined Equator but was not yet in Equator for this type of Chase short sale. Before the end of January, we had HAFA short sale approval from Bank of America. Eureka!
Chase Bank, because its HELOC department wasn’t yet in Equator, dragged its feet for another 60 days, despite repeated requests and hammering. The negotiator at Bank of America refused to give us an extension on the short sale and instead insisted on starting over. An unusual shitty move when the servicing was not sold. When Bank of America re-opened the file, it somehow messed up processing it as a HAFA. A logical person would think Bank of America vendors look at the previous file, but that would be like expecting a Sacramento real estate agent to study the history in MLS of a previous listing — just ain’t gonna happen.
Despite the HUD identifying this transaction as a HAFA and the notes I routinely slipped into Equator as a reminder, nope, it was processed as a traditional. A short sale agent doesn’t ordinarily discover these types of bank screw ups until the counter is issued in Equator. The seller didn’t care about HAFA by that time.
At several points, the buyer wanted to cancel. She was tired of waiting and didn’t really understand the delays. She delivered ultimatums, which don’t work. At another time, the sellers wanted to cancel. They had moved out and no longer cared about receiving the HAFA incentive; they just wanted it closed. The opportunity to eat the negative cash flow and rent it was beginning to look attractive to the sellers. In between, neighbors called to ask if was OK for them to steal the seller’s cats and take the critters to city animal control. Like wha? My main concern was the amount of time it would take Bank of America to process this as a traditional short sale after Chase finally got its act together.
I find my way around stumbling blocks. It’s what I do. The short sale closed this week, with the original buyer happy as a clam, extremely excited and relieved. The sellers are ecstatic. They appreciated my calm demeanor and keeping them on track. Approval from both banks took 5 months. That’s unusual and a long time.
Although I have closed hundreds of short sales in Sacramento, there is never a guarantee that we can get both of the short sale banks to cooperate and issue approvals at the same time. Often issues and delays pop up, regardless of how streamlined we make the process. If something can go wrong on the other side, it often does. Patience is the key to a short sale. And buyers in Sacramento don’t have a lot of patience in today’s real estate market.
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