Email Elizabeth5 Things Your Bankruptcy Lawyer Won’t Tell You About a Short Sale
A bankruptcy lawyer in Sacramento who dabbles in Sacramento short sales once shared with me that being a bankruptcy lawyer is like representing the bottom of the barrel as far as clientele is concerned — but I suspect what the lawyer really meant was the speciality itself carries its own stigma. I’m fairly certain bankruptcy clients come from all walks of life and all income levels. If bankruptcy lawyers are wrong about that, it might make one wonder what else they could be wrong about. Here are things that a bankruptcy lawyer is probably loathe to disclose to potential clients contemplating a short sale.
#1) You Should Probably Do Your Short Sale First and the Bankruptcy Second. However, if you go that route, you might not need the services of a bankruptcy lawyer, and I won’t get paid. Most of the debt accumulated by stressed out borrowers is mortgage related. In California, a short sale for your residence not only wipes out the debt but it wipes out personal liability and short sale taxes on the canceled debt, both federal and state.
#2) Your Mortgage Loans Don’t Vanish After a Bankruptcy. Unlike a foreclosure, in which the home reverts to the first lender and any subsequent loans are released, a bankruptcy leaves all of those loans still in the public records and still filed against the borrower, which can prevent the borrower from obtaining another loan to buy a home. Ever.
#3) Your Mortgage Lenders Will be Tougher to Deal With After the Bankruptcy. If you thought your lenders were relentless before the bankruptcy, wait until it is over and you then try to short sale. For starters, your financial situation will be improved and you might not even qualify for the short sale. Lenders are not required to grant a short sale. If that hard-money second lender was initially unreasonable, just wait, the collection department will be even more harsh and difficult after the bankruptcy. There will be no cash for a short sale for you.
#4) I Have Little Experience in Bankruptcy Law and Won’t Personally Handle Your Case. Lawyers have it tough making a living, just like anybody else who is self employed, and when they fail at one specialty, some will turn to bankruptcy law. But one thing doesn’t change, and that is the paralegal will most likely prepare and process your paperwork. You will talk to your lawyer when you write a check and when the bankruptcy has closed, not during the process.
#5) Your Real Estate Agent Knows More About Selling Homes and Cares More About You More Than I Do. Veteran real estate agents often are empathetic because it comes with the territory. On the other hand, bankruptcy lawyers do not as a rule sell short sales and have little to no experience negotiating with short sale banks much less fully understand the process of selling homes in Sacramento. A home that has been abandoned during bankruptcy proceedings becomes much more difficult to sell 6 months to a year down the road, if it will sell at all. HOA dues pile up, property taxes remain unpaid, utility bills accumulate and often the home is vandalized — none of which the bank will authorize for payment from the proceeds. A buyer won’t pay it, either.
Note: If the investor for that loan is Fannie Mae or Freddie Mac, it’s just about impossible to get the same sales price as a home that is fixed up, shining and ready for occupancy, but trust this Sacramento short sale agent, that’s exactly what the investor will still demand after a borrower completes bankruptcy.
Sellers who are considering bankruptcy would be wise to talk to an independent legal counsel, a CPA, and most likely wait until after the short sale before filing bankruptcy. As always, this agent does not give legal nor tax advice.
For more about Bankruptcy vs. Short Sale, from About.com
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Why Not Call a Sacramento Listing Agent Before Writing an Offer?
It’s always a good idea for the buyer’s agent to call a Sacramento listing agent to talk about the home a buyer might want to purchase, but so few agents seem to call the listing agent. Some will send text messages but it’s so much better to just dial the darned phone. Especially for me because my phone is not always visible; it’s often on mute and I rely on my Bluetooth. Of course, some Sacramento real estate agents don’t answer the phone, I get it, and it can be very frustrating for a buyer’s agent to try to get a listing agent to respond, but they owe it to the buyer to try.
Because I’ll tell you what happens when they don’t. When they don’t, the Sacramento listing agent and the seller are left to their own devices and interpretation of that buyer, and it might not be pretty. I received a few offers from buyers that arrived out of left field over the weekend, no warning. Some without the proper documentation and some at such low prices the sellers thought the buyers were on crack. I encouraged them to issue a counter offer anyway, and to address all of the issues in the counter.
Low and behold, the buyers accepted that counter offer. So, you never know. One of the crucial elements left out of the original purchase offer was a one-line sentence in the purchase agreement that mentioned the sale was contingent on selling the buyer’s home without further explanation. There was no Contingency of Purchase addendum submitted. But when I questioned the agent, it turned out the buyer’s home was in escrow. That makes all the difference in the world. It was a huge turning point for the seller and moved the seller from no way in hell to where do I sign.
We need to get back to the day when an agent calls the Sacramento listing agent. Buyer’s agents can find out if the home is still available, whether there are counter offers in the works or other offers on the way, if there is some special consideration that needs attention in the contract. Moreover, it gives the buyer’s agent a chance to pitch the qualifications of the buyer, network a little with the listing agent, establish communication and set the stage for offer acceptance.
Whether I’m listing homes in Elk Grove or West Sacramento, soon as I spot a showing through my SUPRA lockbox, I shoot off an email to the buyer’s agent to see if I can help to answer questions. My hope is to open a line of dialogue before they write an offer and to give agents easy access to my email.
Why Some Sacramento Home Buyers are Not Buying a Home
Sacramento real estate runs in cycles but no year lately has been the same as the last, much less the approaches used by Sacramento home buyers. We had a big run for 8 long years of short sales and foreclosures, but that reign is pretty much over. Sacramento has been on the rebound for the past 2 years and rising prices has shown us that. The really big push in price increases was in 2012, which continued into the summer of 2013 — what some would call a market correction. That’s why the investors have left the market because they were there at the bottom and don’t want to ride the wave up, leaving us in a real estate market filled with confused home buyers.
Yet, don’t get the idea that the market is overpriced or over inflated because it’s still appreciating, it’s simply doing so at a quiet and very slow pace. In some neighborhoods, prices might be a little flat, but they’re not falling. Full-price offers and multiple offers are still happening on the entry-level homes, especially those that are highly desirable, ready to move into. My February is filling up the calendar with March closing inventory nicely. I predict we’ll see a huge push in closed sales for March across the board in Sacramento.
I also see some Sacramento home buyers making big mistakes. I highly doubt they’re not getting good advice from their buyer’s agents because most agents have a pretty good idea of what’s going on. I suspect that buyers are talking to Uncle Joe who’s moving kinda slow, the guy who mows their lawn, the clerk at Safeway, and getting bad advice because they’re looking for advice in the wrong places. The buyer’s agents I know are working extremely hard and feeling like they’re banging their heads back and forth in a door jamb — because it feels so good when they stop. But they’re not going into escrow with their buyers.
Some Sacramento home buyers think a seller would grab an offer without financing, known as all-cash, over an offer with financing. But sellers don’t really care if you hand them a brown paper sack filled with $100 bills or a check drawn on Bank of America, it will all end up in their bank account anyway. Sellers care about the sales price and terms. Buyers don’t get a break due to financing. They might move up the scale in a multiple-offer situation with better financing or cash, but price is still king. Price rules. Get with the program. It’s a new dawn.
I’ve also seen Sacramento buyers submit under-market price offers, sometimes known as lowball offers, when they know the seller has received multiple offers, as in 3 or 5 offers or more. I wonder why they do that to their agents? It sounds sadistic to me. They have no chance in negotiations yet they insist on submitting an offer. Maybe that’s not sadistic, perhaps that’s the definition of insane, doing the same thing over and over with no chance in hell of accomplishing anything.
Not Every Sacramento Home Seller Wants to Deal With a Counter Offer
When an agent says to me, you can always issue a counter offer to my buyer, that sounds like code for: the buyer is unreasonable, because I don’t think an agent is trying to tell a veteran how to sell real estate. But you never know in this market. We have a very weird market in Sacramento right now made up of serious buyers and squirrelly buyers and lowballing investors. I never know on which the roulette ball will land, as it is like a roulette wheel.
I can share with an agent that we have multiple offers, and yet the buyer’s agent will send me an offer that is contingent on selling the buyer’s home without a Contingency of Purchase addendum, much less a pre-approval letter. You can’t make this stuff up. Oh, and on top of it, maybe the agent hasn’t shown the home. It makes you wonder if buyers aren’t thumbing through MLS listings like a Neiman Marcus catalog and saying when I win the lottery, I’ll buy this house and that house and that house. And agents are writing offers for these guys. Blows my mind.
Most sellers in Sacramento do not enjoy bidding wars, believe it or not. They hope that a nice family will purchase their home at a fair price and close escrow — live there happily ever after. That’s what sellers want. Not every seller will want to deal with a counter offer. It’s stressful for many sellers. Negotiating does not come as easily to some of us as it does to others.
Myself, as a top-producing Sacramento real estate agent, I negotiate daily for a living, and I love to negotiate. But I’m also sensitive enough to realize that many of my sellers do not want to negotiate. They don’t want to deal with counter offers and all that they imply. They just want to sell their home.
If we receive 5 offers, the sellers, more likely than not, will take the path of least resistance and choose the best offer for them. Especially if it doesn’t involve a counter offer. If you’re thinking about writing an offer for a home in Sacramento, you should ask your buyer’s agent to call the listing agent to discuss what you might want to do. Although a listing agent cannot and should not ever speak for the seller, a listing agent can help to guide. You might have to write your best offer and stop trying to ding around.
On top of all of this, no offer should ever land on a listing agent’s computer without an advance call from a buyer’s agent. Not in this Sacramento real estate market.
New Randy Parks Home Listing in Sacramento Absolutely Sparkles
Looking at the original cedar walls in the family room of this new Randy Parks listing in Sacramento almost makes me regret painting my rooms with cedar walls in my home in Land Park. Almost. The warmth and emotional pull of that family room is incredible. Lots of people tend to misidentify this wood, which was a very common material used by builders in the late 1940s and early 1950s, for pine wood because it features knots. But it’s really cedar, generally coated with shellac (remember shellac?) for preservation.
The family room is one step-down from the kitchen and is part of the original floor plan. The 8 windows on two walls are double-hung wood construction with sashes, and 7 of them open and close easily. One window needs the sash replaced, which is pretty good when you figure they’ve been in service for 63 years. All of this glass lends a spectacular view of the oversized yard.
If you need a yard for gardening, a place for children to play, dogs to roam, for sports such as volleyball or badminton, or maybe you prefer a big yard so you can survey all that you own and relish in your own privacy, this is definitely the home for you. The yard is only a small part that will attract you to this impeccable 1951 home.
First, it’s a Randy Parks home, which means it has random plank hardwood flooring and all of those cute built-in touches, along with quality construction. Home buyers really love a Randy Parks home because it’s timeless beauty. It never goes out of style and just becomes more beautiful with each passing year.
Second, all the floors in the 3 bedrooms are gleaming hardwood, because they’ve been refinished. This is a home that’s been in the family for 63 years, ever since it was built. The love and care is apparent every place you look. The cabinets in the kitchen are tall, run to the ceiling for extra storage, and they are painted in gloss with new hardware. The kitchen features a breakfast nook, too.
I could not find a scratch on the wall or even a pinhole from a nail that once held artwork. The wood burning fireplace is flanked by built-in bookcases on a wood wall in the living room. Dual pane windows throughout are low maintenance, except for the family room — and who in her right mind would change out those wood windows anyway? The sewer line has been replaced, and the roof is somewhat newer. There’s really nothing to do but move in and enjoy life.
3401 Saint Mathews Drive, Sacramento, CA 95821 is offered exclusively by Lyon Real Estate at $250,000. For more information, contact your #1 Sacramento Real Estate agent at Lyon, Elizabeth Weintraub, at 916.233.6759.
This Randy Parks home will be held open Sunday, February 23rd, from 2:00 to 4:00 PM by Keith Mikoff at Lyon Real Estate. Go east on El Camino from Biz 80 1.8 miles and left at Saint Mathews.
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