Email ElizabethSellers Who Refuse to Close a Sacramento Short Sale
Never thought I’d run across sellers who refuse to close. Sellers always want to know how long it will take for their short sale to close. From listing to closing, that average time period is 90 to 120 days. That’s because the average time for short sale approval is 60 to 90 days. Once the short sale approval letter is received, most banks give the parties another 30 days to close escrow. Every so often, a bank such as Bank of America might allow 45 days for closing, but 30 days to close escrow is about the norm.
This doesn’t mean that your particular escrow will close 30 days from short sale approval because your particular escrow closing period is defined by your Residential Purchase Agreement. Right on the first page, close to the top, there is a box that will probably be checked and the number “30” or “45” written into the space. That number could be “10” or “14.” The closing date is defined in paragraph 1 D. It can also be written into the blank line such as “10 days after bank approval.” But whatever date is agreed to as closing, it always follows the short sale approval letter. The time frame for closing begins on the date the short sale approval letter is received. In the event of dual lenders, the time frame begins when the second approval letter is received.
If the buyer needs to get a VA loan or some other type of loan that might take a few days longer, one might need to get an extension to the short sale approval letter. In other words, the parties to a short sale can close sooner than the date in the approval letter if the purchase contract so stipulates, but cannot close later than the date in the approval letter, unless the agent obtains an extension from the short sale bank.
Closing escrow after short sale approval is sometimes very stressful for sellers. Especially if short sale approval is received faster than the Sacramento short sale agent initially estimated. Lenders are unpredictable at times. There can be no rhyme nor reason why one month the approvals take 90 days and the following month, an approval arrives at 4 weeks. Approval times like this can throw a seller into hysteria. A seller might not be prepared to move, either financially, or emotionally, or both.
To be fair to all parties, though, if a seller has concerns about closing and moving, the first thing the seller should do is talk to her short sale agent about it. The last thing a seller should do is wait 3 days before closing to announce that the seller is unprepared to move. Sellers who refuse to close can cause extreme havoc in a transaction and incur legal ramifications.
If a seller needs more than one extension in a short sale, the bank is within its rights to withhold that extension. Often banks will not issue a 2nd or a 3rd short sale extension. Furthermore, the bank can cancel the short sale. A seller can’t call the bank and ask for an extension, because the seller won’t be speaking to the short sale negotiator but instead will talk to a customer service representative who is not authorized to give out that type of information — and might not be able to decipher notes in the file even if she has the ability to discuss it.
When a short sale starts over, it means several things. First, there will most likely be a new BPO completed. That means the sales price can change. Moreover, if the seller qualified for a HAFA incentive, the bank might not allow the HAFA the second time around. Disqualifying for the first HAFA is often grounds to dismiss any further HAFA actions. But in actuality, the worst that would happen is the seller would need to find a new buyer, which is the place the seller was in when the short sale first began. It’s not a big headache for sellers to refuse to close a short sale.
But it is a huge, gigantic headache for the buyer who has paid for an appraisal, paid for a home inspection, canceled utilities, transferred mail, lined up movers, packed up the house and was ready to move until the bombshell fell. It’s risky to try to buy a short sale because nobody is gonna make the seller close escrow if the seller doesn’t want to close. There is never any guarantee that the seller will close escrow.
However, it doesn’t mean a buyer doesn’t have recourse or that a buyer can’t sue.
The Perfect Digital Camera for Real Estate
I could barely wait to open my eyes this morning. That’s because I have an appointment to shoot photos for my new listing, and I have a new digital camera that is perfect for real estate. I’ve always used a Nikon, but lately I’ve been disappointed in the quality of my photos. I’m probably my own worst critic because everybody else gushes over how cool they are, but I felt that I could do better. I’m always striving for quality and improvement — for ways to shorten my time invested and increase the quality of my performance. Just like any other corporate structure, except I am a Sacramento real estate agent and a sole proprietor.
Yesterday, I dumped the Nikon D40 and traded it for a Nikon D7100. The difference between the two digital cameras is amazing. I stood in the store at Pardee’s Camera, over on El Camino by Watt, and took a photo of the interior of the store with my old digital camera. Then I shot a photo with the Nikon D7100 and the difference was enough to make my mouth fall open and my eyes gleam with delight. I began to salivate. Thank God my husband was there to wipe my chin.
Not only that, but the excitement builds. I tried out a new wide angle lens, a Tamron 10-24mm. Parts of the room that were not accessible in my previous photo now could be captured. The tip-end at 10 is a little round on the edges, but bringing in the lens just a hair gave it a perfect shot. It no longer made sense to me to be shooting interior photographs of a home with an 18-55mm lens. This will greatly improve my photos. If you thought my photography was beautiful before, just wait.
All along, I have been relying on Photoshop to fix highlights and shadows, but my new Nikon D7100 has it built in. The photos absolutely sparkle with light. It adds a few more F-stops to auto. I hate it, absolutely deplore dark photos in MLS. Agents who allow black photos in MLS should be shot. My pictures of a home need to showcase lots of light, and be bright and cheery. I have spent hours agonizing over photographs and tweaking them to improve the quality, and now I no longer have to do that. I am spared that distress.
I can now shoot a photograph that is clean, captures the space I wish to show, and is nothing short of magnificent, if I say so myself — and I do. Plus, it works wirelessly with my cellphone and iPad. If you take photographs and struggle with some of these issues, I suggest you check out the Nikon D7100 and a wide angle lens. I wish I had done this years ago.
How Do You Handle a Racist Neighbor in Sacramento?
It’s a bit ironic for me to read that April is Fair Housing month, given what happened yesterday. It happened in a somewhat quiet neighborhood in Woodland, made up of mostly tract homes, built in the mid-1970s. This particular home has 3 bedrooms and 2 baths, and it’s a preapproved Cooperative Short Sale through Bank of America. The family, first-time home buyers, had just received the short sale approval letter and were informed they could close escrow. They arrived at the home early yesterday morning to do a home inspection.
As they walked up the sidewalk toward the home with their agent, the next-door neighbor came out, as next-door neighbors often do during a home inspection. Coming over during the home inspection is a great time to greet new neighbors and welcome a family to the neighborhood. That’s because, for the most part, there is not a lot for buyers to do during a home inspection, except stay out of the home inspector’s way. I was not present at this meeting, so my information is third-hand, but apparently the neighbor did not welcome the new family. Instead, he began yelling and hurling racial slurs at them. He is accused of saying he would move out of the neighborhood if this family moved in. At the top of his lungs. In the middle of this quiet working class neighborhood.
You think it won’t happen in your back yard, but it does. The sellers say the neighbors never exhibited any of this hostility or prejudices when they lived there. The buyers called the police because the neighbor made threats of violence against them.
I’m not even so sure it was a racial prejudice as much as a religious prejudice — but all hatred, because people are different, is hatred. It’s vile. It’s shocking. It’s incredibly painful and sad. It’s sad for the victims who endured such vicious wrath. It’s sad for the racist because he is uneducated and ignorant. It’s sad for all of us because this kind of hatred still exists.
It makes me want to put a sign in the yard all right. A sign that says the neighbor is a racist splashed with a big red arrow pointing toward his house. But he’d just pull it out of the ground and smash it up, maybe use it to break the windows on this house. That’s what people like him do.
Protecting Privacy When Home Selling
You know that scene in Mission Impossible where Tom Cruise is walking through a mall and inanimate objects are trying to sell items of commerce to him? And you think to yourself: no way. But . . . way. It’s happening every day and all around us. You can’t even click on a website without finding advertising that is geared to your tastes. If you’ve so much as clicked on a shopping site, those photographs will show up in your internet searches from now on in every site you visit. It’s frightening how your IP address discloses so much about you and your likes and dislikes.
You can minimize some of the damage by not giving out your location. When I sign on to DocuSign, for example, I don’t let it track me. It’s not anybody’s business if I am at my computer in Sacramento, on the oceanfront in Monterey or clear across the country in Hilton Head. If I want to tell you where I am, that’s one thing, but you’re not going to track me. I turn off my GPS on my cellphone, too.
There are little things that you can do to help protect your privacy while selling your home. But when you put your home on the market in Sacramento, you are opening a whole ‘nother can o’ worms. You can’t sell it without photographs. On the other hand, do you want every peeking Tom, Dick and Harry peering into your living room window? Isn’t it creepy to know that some stranger is staring at the sink where you shave your face? Selling real estate is intimate, and putting your home out there for others to see can feel like an invasion.
For this reason, as a Sacramento listing agent, I suggest that sellers remove all items of personal nature. If I shoot a photograph, for example, that somehow includes a photo of a family member or the seller herself, I will blur out the photo online. It’s nobody’s business. Take all your personal photographs and put them away. Put your jewelry and other valuables in a safe deposit box. Don’t throw your mail on the kitchen table for prying eyes to spy. People don’t mean to be snoopy. Maybe they’ll open a built-in drawer to check its depth, though, and innocently discover things they have no business looking at.
Before you let your agent put up a for sale sign, walk through your home like a stranger. Make sure there is nothing in view or within reach that could be considered too personal to share with others.
The Chicken or the Egg in a Sacramento Short Sale
The bickering that goes on between lenders in a Sacramento short sale remind me of kids. Maybe that’s because we don’t really grow up, we just get wider. Like, I don’t wanna eat it, YOU eat it. I know, let’s make Mikey eat it. Except Mikey is now all grown up, living in New York and earning a living hawking ads. But you know where I’m going with this, right? I’d like to talk about when we have two loans on a short sale. That’s when we run into what comes first: the chicken or the egg?
The first lender in this Sacramento short sale doesn’t want to issue approval until the second lender issues its approval letter. Of course, the second lender doesn’t want to issue its approval letter until the first lender issues its approval letter. And we can go around and around and around until we’re blue in the face, but nobody is gonna budge. They’ve got their positions staked out, and by golly, they’re not moving.
In California, I have to side with the first lender. Because it makes the most sense for the first lender to be reluctant, and I’ll tell you why in a minute. But first, let’s look at the second lender. The second lender is in a position of jack squat. The second lender, especially if it’s a purchase money loan, will get wiped out in a foreclosure and end up with nothing. It is in no position to negotiate. The only position it has is to disqualify the short sale and stop the short sale from going through, but that’s like cutting off your nose to spit your face. It’s just plain stupid. The second lender stands to receive funds, generously donated, I should point out, by the first lender. Otherwise, it would get nothing.
The first lender gives up certain rights upon short sale approval that the second lender does not. Those rights involve dual tracking. It’s the only part of the so-called dual tracking law that affects a short sale, unless you want to wait until 2018 when the law really takes affect. It says that when a lender issues a short sale approval letter, the lender must stop all foreclosure action and the lender can’t move forward on a Notice of Default or even file a Notice of Default. So, give the first lender a break. Issue the approval letter.
Sometimes, the only thing you can do if the banks won’t see reason is to hope the second lender elects to sell the note to somebody else so you can start over with a new lender. In fact, maybe you want to give them a list of lenders who buy these pretty much worthless scraps of paper — these no-equity seconds? Of course, this is presuming the second lender didn’t buy MI, which is another story for another day.
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