Email ElizabethWells Fargo HAFA Short Sale Approved in 2 Weeks
The earth stood still for just a second last week after Wells Fargo approved a HAFA short sale for sellers in Elk Grove. We were expecting approval at earliest by the end of March but we instead received short sale approval on March 1. The usual 6 weeks that Wells Fargo typically takes to approve a HAFA had been shrunk to about 14 days. Completely incredible. I knew Wells Fargo could eventually shorten its timeframe for a HAFA short sale, and it has exceeded my expectations.
I listed this particular Elk Grove short sale in early February. We held off showings for at least a week to build momentum and pushed for multiple offers. From the half dozen offers, we chose the cleanest offer from the most qualified buyer and submitted it to Wells Fargo. Under Wells Fargo new guidelines, it has reduced tasks in Equator and now asks for limited documentation. We uploaded additional docs a week later and, 7 days from receipt, we were notified of approval for this Wells Fargo HAFA short sale.
The only little glitch is the bank set closing for 29 days from approval. This might not be enough time to get the buyer’s loan processed. Moreover, it’s difficult to find a rental that allows occupancy at the end of the month. Because Wells Fargo, like most short sale lenders, requires an arm’s length affidavit, the seller can’t rent back. But unlike some short sale lenders, oh, like Citi, for example, Wells Fargo doesn’t put up a big fight to issue an extension. Sometimes, getting a short sale extension from certain short sale lenders can be cause for handing over your first-born child. But not in a Wells Fargo short sale.
So, don’t believe all the crap you hear about short sales. I hear buyers say they wouldn’t touch a short sale if it was the only home for sale in Sacramento, and that’s not a fair attitude. If you choose a short sale listed by an agent who closes a lot of short sales and you get the right lender to work with, a short sale doesn’t have to be complicated or lengthy.
Wells Fargo gets 2 thumbs up from this Sacramento short sale agent. I’ll throw in a couple of toes, too.
Active Short Sale vs. Active Short Contingent Listings
My phone rings all day long with buyers wanting more information on homes in Sacramento, especially on short sales. The problem is half the time they are calling from listings on Zillow or Trulia that are not for sale. I can see that buyers sometimes think real estate agents are overlooking or hiding homes from them, and they find these secret homes on Zillow or Trulia and get all excited. I hate to say this but by the time a home shows up on Zillow or Trulia, it’s probably either sold or it was never for sale in the first place.
We live in an instant society and people want instant information. We have little to no patience. We want it and want it now. You can have it now if you’re looking on an agent’s website that pulls data directly from MetroList. Not the public MetroList, which delivers limited information, but the full-blown stuff you get from a Sacramento real estate agent.
Yet, there is one little tweak with MetroList that I keep hoping will get fixed because it’s pretty darned confusing for home buyers. That’s the Active Short Sale status modifier, which is bundled with the Active Short Contingent status modifier. Generally speaking, when a short sale is sold, a seller has choices when changing the status of that listing. The listing can be changed to:
- active short contingent
- pending short lender approval
- pending
As long as the listing is changed to one of the last two modifiers, it will reflect as pending in some manner in MLS. This means the seller does not want anymore offers. However, if it is changed to Active Short Contingent, it means the seller will consider back-up offers. A back-up offer does not mean a buyer gets to buy the home. The buyer will get the home only if the first buyer cancels.
But don’t you think a buyer would like to know if that short sale is really available for sale? I think so. Yet, a buyer can’t tell if the listing is available for sale or not unless a buyer knows the secret. The secret is to look at the listing (yes, you’ve got to click on it and open it up) at the very bottom right-hand corner. If you see “active short contingent” in that spot, it means you can only write a back-up offer.
Even though I explain this over and over to buyers, they can’t see it. So, I am writing this blog and including a self-imposed photo over an existing listing. I can’t show you the entire listing because the active short status at the top is a long ways from the active short contingent at the bottom, so I’ve just cut out the middle for you.
It’s tough enough to figure out the difference between active short sale and active short contingent, but the way MetroList reports it for you, you can’t even find it.
Paying More Than List Price to Buy a Home in Sacramento
When I was a kid and allowed into a grocery store with my parents, I used to beg them to let me play the fishing game. This was a contraption set up by the entrance in Applebaum’s, close to the mechanical horse, a machine with four walls of glass, filled with little toys. A fishing line with grabby-like tongs dangled over the toys, and for a nickel, you could try to grab one. Some were worth more than others. Generally, I failed, but it was fun to play because if I won, I got a toy that cost more than a nickel. The focus was on the hope of winning and not on how many nickels I lost.
Does paying more than list price to buy a home in Sacramento get your goat? Welcome to the club. I completely understand how that can bug you. To some people, it’s a totally foreign concept, and they might believe they are paying more than they have to to buy a home in Sacramento, yet I can assure they most likely are not. Because it probably comes down to a home buyer either offers over list price or a home buyer might not buy a home at all. If you think that’s discouraging, wait until I tell you that even if you offer more than list price, you probably still won’t get the home.
Why? Because the list price you offered most likely won’t be high enough or the competing buyer is utilizing better financing methods or cash. If often comes down to the numbers.
I recall a long time ago thumbing my nose at a property because the agent suggested I pay more than the seller was asking for the home. I thought she was nuts. I could not fathom forking out another $5,000 — even if it was rolled into the loan and the difference in my monthly payment was fifty bucks. As a result, I didn’t get the home. This is how most buyers learn that painful lesson. This practice still goes on in seller’s markets, and it will continue in your children’s children’s children’s seller’s markets.
Although all home buyers are ultimately responsible for choosing their own offer prices, a Sacramento real estate agent can guide and advise you. Listen to your real estate agent. If you don’t like or trust your real estate agent, hire a different agent, but don’t try to buy a home in Sacramento without a competent advocate by your side.
Pushing Up Values for Homes in Elk Grove
A few years ago seems so ancient when I recall how first-time home buyers back then were complaining to this Elk Grove agent that they were getting beat out by cash investors. Home buyers began to wonder if prices were moving up when prices were still pretty flat. I predicted then that the appreciation push would happen when cash buyers bid against other cash buyers. Because offers are dependent upon appraisals when there is financing involved, and the appraisers typically do not appraise a home for more based on pending sales. They look at the comparable sales. Without cash offers, the comparable sales generally won’t move upward. This is not 2005.
Sure enough, I see that happening in Elk Grove now. In fact, an agent in my office had pointed a finger at me and said one of my equity sales in Elk Grove was establishing a new record, and it was my fault. This real estate agent lives in that particular neighborhood in Elk Grove. She saw I had listed a home on a cul-de-sac that was absolutely gorgeous. This was one of those homes that when you walk into it, you automatically know that buyers will be clamoring for it. As an Elk Grove agent who sells a lot of homes in Elk Grove, I know it when I see it. This was one of those.
The sellers had purchased this home as a short sale several years ago. It had a open floor plan, was a single-story with granite counters in the kitchen. Trying to figure out the list price was difficult because although many homes had sold in that area, few were not a short sale and none matched this square footage. Based on the median sales price and adjusting for square footage, I figured it would comp about $235,000, maximum. If we got an appraisal. And given the way prices were moving in Elk Grove, coupled with the extreme desirability of this particular home, I figured we could easily shove that price another $10,000.
But I don’t choose the sales price. The seller chooses the sales price. Always. It’s their home. All I can really do is give the seller what they are paying me to give them, which is my professional opinion from almost 40 years in the business. It’s up to the seller to take this information, digest it, and decide upon a list price.
These sellers chose the list price of $245,000. I then positioned this home to receive multiple offers and began to market it. We received more than 30 offers. The highest offer was cash at $275,000. The sellers accepted the offer with a fast closing. A few days later, that buyer’s agent confessed that she had written several offers and her buyer now wanted to cancel the transaction. Her excuse for what can be considered unethical behavior was my seller had 30 offers and her buyer did not enjoy that luxury. If you’re nodding your head in agreement, you’re probably not a real estate agent and, if you are a real estate agent, that nodding head probably ought to be hung in shame.
We then chose the next 3 highest bidders in line, whom the seller would consider. The seller asked each of these buyers to make a highest and best offer. They bid against themselves, and we sold the home for $268,000 cash. It closed last month in 3 weeks. Almost 14% over market value. That’s the value of a full-service listing agent. You would think the real estate agent in my office would be happy that we’re pushing up the value of her home in that neighborhood. But this is how homes price can go up in Elk Grove. If you’re thinking about selling a home in Elk Grove, call this Elk Grove agent at 916.233.6759.
How Not to Present a Purchase Offer in Sacramento
A real estate agent I first met 5 years ago when I interviewed her for my book, The Short Sale Savior, and later she referred a relative to me whose home I sold in Sacramento, serves on an Education Committee at a REALTOR association in the Bay area. She asked if I would do a webinar for her agents to help them to get purchase offers accepted. I generally don’t agree to do webinars or seminars because I don’t like them. Who am I to tell people what to do? Seminars are ex-husbands’ gigs, not mine. But I agreed because I can’t say no to this person. She is so danged sweet!
Sweetness gets you everywhere in this life. Vinegar, not so much.
I might start with talking about what NOT to do when writing an offer to buy a home. Because I list such a huge volume of homes in the Sacramento area, I see all kinds of offers. I can estimate that I probably receive more than 1,000 offers a year, maybe even twice that amount depending on whether it’s a seller’s market in Sacramento. It’s common today to receive a minimum of 20 to 30 offers for entry-level listings.
The unspoken truth is at least half of those purchase offers are garbage. I’m being generous with that percentage. That’s the part that agents don’t talk about because nobody wants to believe that a buyer’s agent can’t write an offer, yet that’s the first problem with many offers. There is no nice way to sugar coat this. I continually find myself defending the competency of my profession to sellers who can’t believe their eyes at some of the offers we get.
In a seller’s market, a seller and her listing agent can be very selective. Sure, there are markets in which the tables are turned, but our present market in Sacramento is a seller’s market. This means a seller can be looking for the very best offer and might be examining an offer with an eye for a reason to reject it. This is a very different approach than hoping to accept an offer, which is how sellers view offers in an opposite market. Unfortunately, buyers and buyer’s agents give sellers plenty of reasons to reject an offer. If a seller is considering 2 identical offers, one offer may get accepted simply because the other was rejected.
The trick is not to set up an offer for possible rejection. Here are some things an agent and her or his buyer should try NOT to do when presenting a purchase offer:
Clerical Offer Mistakes
- Misspelling of names
- Wrong property address
- No dates
- Missing signatures / initials
- Incorrect mathematical calculations
- Outdated forms
- Missing addendums or supporting documentations
- Sending unnecessary documents / paperwork
Writing FHA or VA offers on listings that do not offer those financing terms?
Sending the offer to the wrong agent or the wrong company or in the wrong format
Not reading the confidential agent remarks / attachments nor following specific directions
Exhibiting hostility toward the listing agent or seller
- Sending the agent a copy of the MLS print-out or list of comparable sales
- Demanding concessions and other unusual terms in the offer
- Belittling the home, the seller and the home’s location
- Yelling and screaming and use of profanity
No cover letter with the offer, hoping the terms and conditions speak for themselves. Often, they do not.
Sending a generic cover letter saying the buyer loves the home. All buyers love the home or they wouldn’t be writing an offer.
Forgetting that all offers look the same. Only the numbers and names change.
The bottom line is don’t give the seller any ammunition to reject an offer. In multiple-offer situations, a buyer should not allow her offer to be automatically eliminated from the competition. Ideally, a buyer wants her offer to be the best, at the least an offer worthy of top consideration. Give it a fighting chance.
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