Email ElizabethTips for Your Short Sale Hardship Letter
When I originally wrote How to Write a Hardship Letter, I did so as a link that I could use to send to my clients as well as creating a useful article for others contemplating a short sale. Whenever I find myself repeating a scenario, I figure it’s probably worth writing an article about. That way I no longer repeat it, and I can just send my clients a link to read.
A seller emailed that she laughed and laughed when she read my article. I was snuggling into bed with my husband, about to read an eBook on my iPad when I noticed the email, so I clicked to read my hardship letter piece. It is rather amusing, I suppose; I was focused. Especially the part about not getting waylaid and fooled into writing that things will get better. Not only will they most likely not improve for sellers who are severely upside down, but the bank doesn’t want to hear that they will improve. If the bank thinks a seller’s situation is temporary, the bank will not approve the short sale.
Another seller called to say she could afford to make her mortgage payments, and her lender, upon review of her financial statements, most likely would also agree that she could afford to make her mortgage payments. This seller apparently enjoys disposable income and makes a good living. She’s just tired of her home being upside down. That’s not enough of a reason to do a short sale through her particular lender.
There are a few lenders that will let a seller do a short sale without a hardship, but most of them want a documented hardship through a hardship letter. This doesn’t mean you make up crap, but there are ways to prove a hardship, which a seller might not be aware about. For example, if you’re retiring and moving away, that’s a hardship. On the other hand, paying for your daughter’s ballet classes and French lessons are not valid hardships.
If you want to know if you qualify for a short sale, call an experienced Sacramento short sale agent to discuss it. I always offer a free consultation to potential short sale clients. You can call Elizabeth Weintraub at 916 233 6759. But don’t call me to pick my brain and then hire another agent. That’s not cool.
Did You Know Ringworm is a Fungus?
Every four-legged creature in my house hates me, even though what we are doing is for their own darned good — kinda like when I have to explain to a seller why she needs to fix up her home to sell or when I have to tell a buyer’s agent that the bank says her buyer needs to pay more to buy that Sacramento short sale, and the reactions I receive. It’s a familiar feeling. I’m like that walnut in Plants vs. Zombies when you give it plant food, though. Holding power.
If you’ve never had to deal with ringworm, you’re fortunate. I was fortunate for 60-some years until a few weeks ago. The vet says our new Ocicat, who came from a breeder in Auburn, is most likely the carrier — but you know how small some people are; things like this, they would never own up to it unless we forced the issue, and it’s just not worth the hassle we’ve already got. Little Tessa is the only new thing in the house.
Ringworm is a fungus and not a worm, which is a fact I wish I did not have to know, but now that I do, I’ll share that bit of information with you. I first discovered it because I looked in the mirror a few weeks ago. Polka-dot city was all over my face. I looked like a kid with measles, only really large 1960’s type of polka dots, as though the ghost of Andy Warhol broke into the house and painted my face while I slept. Was counting my lucky stars, believe you me, that I have a dermatologist who could immediately see me and take care of this. But the cats take longer to clear up.
We had to wash every piece of cloth material in the house. Thank goodness we don’t have carpeting. We threw out all of their toys and scratching pads, thoroughly vacuumed and recovered the 3 cat condos (which we’ll eventually discard) and closed off the formal living area of our home from the rest of it. The Ragdoll, Jackson, who is most susceptible, has to live in a back bedroom and bath, while the other two Ocicats are isolated to the family room and kitchen.
All 3 cats receive terbinafine cream twice a day and pills once a day. The vet shaved their infected areas. The highlight of yesterday was giving all 3 cats a medicated bath. They are now bathed once a week. I have a lot of experience with bathing cats because I used to live in flea city on Balboa Peninsula in Newport Beach, so my poor husband is spared this chore and now must admit something good came out of living in Orange County. While all of this is going on, I’m talking on my Bluetooth to sellers from Elk Grove, Sacramento and West Sacramento who want to put their homes on the market this week and next.
It was like yesterday was the aftermath explosion from Thanksgiving dinners all over Sacramento, during which family members said, “Hey, you should sell that Sacramento home and call Elizabeth Weintraub.” I don’t have any other rationale for this sudden burst of listing activity. Good thing I can do a fairly decent job at multitasking and am organized.
As for the fungus, well, I’m almost wishing I had kids with nits.
Real Estate Predictions for 2014 and Nebraska
Everybody loves a top 10 list, and a list of the top 10 real estate predictions for 2014 is what every real estate publication across the country is trying to create at the moment — to capitalize on our uncertainty in the real estate market. If you don’t look too far, you’ll also find a bunch of year-in-review articles, as though we need to be reminded of what happened 11 or fewer months ago, in case we’ve gone half senile during that time period.
I create my top 10 list of a real estate forecast every year for About.com as its home buying expert. Most of the time, I’m right on the nose. That’s not because I have some sort of super power, but because I look at the way things are going and figure they’ll pretty much continue in that same direction. Oh, we might have a little up and a little down, but most of the time, if things are moving upwards, say, for at least 3 to 4 months, that’s a trend that will continue.
The main difference between last year and our new year of 2014 will be that last year, meaning this year now, will have experienced wilder swings. In Sacramento, for example, we’ve watched the prices of entry-level homes soar through the second quarter of 2013. When home prices shot up, buyers became nervous and started asking questions about whether we are in another real estate bubble. Seriously? Oh, yes, I see, they were born on the cusp of Rain Man meets Enya during the Reagan Administration, with no reference points prior.
You want to see old people in their element, I tell ya, you should see the movie Nebraska now playing at the Tower Theatre in Land Park. Nothing against the state of Nebraska, but the director elevated the winter wheat fields of Nebraska to an art form. It stars Bruce Dern in an endearing role. There were belly laughs in unexpected places during the movie. And lots of old people, many of whom I recognized from my own lineage, and I suspect some of the actors actually live in Nebraska and are not actors. It’s their not being actors that created some of the hilarity.
The movie is about this old guy, Bruce Dern, who gets a letter in the mail from a place like the Publisher’s Clearing House, informing him that he has won a million dollars if he has the winning number. To collect, he decides to go to Lincoln, Nebraska, even if he has to walk all the way, because you can’t trust the mail with such an enormous task. His son steps in to drive him, primarily, it seems, because the stubborn ol’ fool kept otherwise wandering off down the highway.
I can’t tell you anymore about the movie because I don’t want to spoil it when you can see it for yourself. Just like I can’t tell you anymore about my 2014 real estate predictions and forecast, when you can read it for yourself at the link in the first paragraph of this blog.
Don’t Make This Sacramento Home Seller’s Mistake
Nothing speaks louder than real-life stories of home seller’s mistakes in Sacramento real estate and, in some cases, it’s pretty tragic. Further, being an optimistic person who tends to focus on just the good stuff, I don’t ordinarily talk about the home sellers who “go south” (no offense to you Southerners) but sometimes the stories ought to be expressed.
I share this particular story in hopes that some other home seller in Sacramento will be spared. First, let’s set some misconceptions aside. In today’s Sacramento real estate market, often the first offer is the best offer you’ll ever get. You should negotiate with that offer and not shrug it away because you didn’t like the sales price. Sellers can harbor futile hopes that another buyer will pay more but that and a quarter won’t buy a Starbucks. The first offer you receive might be the only offer you will get.
Second, after you hire the best Sacramento real estate agent you can find, you should stick with that agent. Don’t listen to those who will try to persuade you that you can pay less and get more. Where in the world does that philosophy work? You tell me because I’ll go to that store. There is always a tradeoff.
A seller begs to go on the market. Needs to sell because she is getting a divorce and cannot afford the house payments. She has equity. The problem with her home is she bought it thinking she was moving into a certain neighborhood, a desirable neighborhood but, for whatever reason, she was misled. She bought a home in a neighborhood that was not so desirable, yet still close to the more popular area.
These types of homes on the outskirts are very difficult and challenging to sell at prices within the skirts. Although an appraiser who is unfamiliar with the neighborhood will use comparable sales in the more desirable area, buyers often won’t make offers in that price range, and therein lies the problem. Besides, there are real estate agents who know the boundaries of neighborhoods, even if the buyers do not. A home on the outskirts could be worth $25,000 up to $100,000 less than other homes located within that 6-block radius.
This seller received an offer that would have paid off her mortgage, all of her closing costs and give her a little pocket change. She refused the offer. She was indignant. A short while later, she asked to cancel the listing. Big home seller’s mistake. I will always cancel a listing for a seller, though. I am not one of those agents who hangs on to the listing with her teeth and makes everybody angry. I just let it go. Besides, people have their reasons. Maybe they no longer want to sell. Or whatever.
Which is what this seller told me. However, soon after the listing was withdrawn, it was back on the market with another agent. The seller said her ex-husband wanted to hire a different agent, but it was difficult now for me to trust anything she had to say. The relationship between a listing agent and a seller is a fiduciary and built on trust. If the trust is gone, the relationship does not exist. She also mustered the nerve to ask if I would give her my photographs because she did not like the photos taken by her new agent. What?
In any case, her home is now pending as an approved short sale. She could have walked away scott-free but chose this path herself. It makes me wonder why people do this. I take no pleasure in her misfortune. In fact, it breaks my heart. I hope it never happens to you. Because you know what they say, you can learn from your own mistakes, but it’s much better to learn from somebody else’s. Don’t make these kinds of home seller’s mistakes.
What is the Fair Market Value of Homes?
Home sellers in Sacramento often ask me how much is my home worth when that’s not really what they want to know. They want to know how much will their home sell for, and that could be two very different numbers. On the other hand, they might want to know if they can do a short sale, in which case the answer is always, without fail: the price will be market value, based on comparable sales, providing the seller qualifies.
It’s not the sellers’ fault. Sacramento real estate can be a big confusing can o’ worms. I imagine sellers hear all kinds of crap from neighbors, coworkers, relatives and others whom, even though they might have actually sold a home or two, haven’t worked with an agent who works the way the one in front of you does.
People think it’s OK to hit up an agent for a sales price. Why do they think it? Because real estate agents have encouraged them to behave in that manner. Why else, we think, would anybody ever want to talk to us unless it’s to find out how much their home is worth — its market value? We’ll give them a free Comparative Market Analysis. Free, because it’s not worth anything.
Before I was licensed, I dismissed agents from the possibility of listing my home because they lowballed me on market value. At least that’s what I thought. Because I didn’t really understand how market value is determined. You can’t just give an agent your address and expect that person to name an accurate number. Maybe a range. Not a precise sales price.
I wouldn’t even give my next-door neighbor a sales price without completing an in-depth analysis of his features and studying the past 3 months of sales as they pertain to his home, and I live next door to him. I also sell hundreds of homes. I should know, right? Because I am a Sacramento real estate agent, I keep pretty close tabs on what my own home is worth, but I couldn’t give you an exact number on my house — even if you stuck burning toothpicks under my fingernails and sang horrible 1980’s songs out loud — without an analysis.
Agents who do might short change. I’m not one of those.
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