Email ElizabethBank of America Cancels a Short Sale
This Sacramento short sale agent spotted a freaky warning in Equator yesterday about how Bank of America cancels a short sale. It’s a Cooperative Short Sale. My seller is receiving more than $10,000 to do this Sacramento short sale. It’s been smooth sailing for her from day one — no financials, no hardship letter — and the docs are in title, knock on wood. The warning was from Dignified Transition Solutions (DTS) and read: LOANS ARE MORE FREQUENTLY BEING SERVICES RELEASED FROM BANK OF AMERICA, WHICH WOULD VOID THE DEAL. This means exactly what you think it means. It means that even though we have short sale approval and are about to close escrow, Bank of America can cancel the short sale.
The buyer has completed all of her home inspections. She paid for a lot of inspections, too: roof, chimney, general home inspection, pest report. Yeah, yeah, I know what you’re thinking. You’re thinking so what, the buyer does not have a contract with Bank of America. The buyer has signed a purchase contract with the seller, and that purchase contract is contingent upon bank approval of the short sale — even though it is a preapproved Cooperative Short Sale, the bank still needs to approve the purchase offer.
Yet, you probably wonder how can Bank of America cancel a short sale? The bank is not the investor. This is the little known but all-important fact in most short sales. Often, the bank is only the servicer, it services the loan, collects the payments (or non-payments) and disburses the money on behalf of the investors. Investors are increasingly pulling that servicing from Bank of America.
I had another Bank of America Cooperative Short Sale yanked by the bank right after the Equator counter offer. Here, we were waiting for what we so innocently presumed would be the short sale approval letter when we were abruptly notified that Bank of America was no longer servicing the loan. It had been transferred to our buddy, Seterus. Which was once, believe it or not, IBM. What a sad graveyard for typewriters and a former technology giant. We started the short sale over from scratch with Seterus. No cash for this seller. No guarantee the short sale will be approved again, either.
Another Cooperative Short Sale at Bank of America is destined for another servicer as well. We went back to the bank negotiator to ask for a short sale extension and were informed the file was being held, pending a servicing release. At least the bank had the decency to hold this pending release but it’s also now being released. This investor is Fannie Mae. I don’t know who the other investors are in my other Cooperative Short Sales — just that those investors are not a government sponsored entity (GSE) like Fannie Mae. That information is unavailable. I do know that we have Fannie Mae saying: Adios, B of A. And don’t let the door hit you in the butt.
Still, the question is how can Bank of America cancel the short sale just before closing? Like with most things, the answer lurks in the legal documents. In the short sale approval letter, Bank of America says, “We may terminate this agreement at any time if we have evidence of: blah, blah and
“The transaction does not comply with our requirements, policies and procedures.”
If Bank of America is no longer the servicer, you’re hosed. So, the moral of this story is it ain’t over until the fat lady sings. Until you close escrow, that Cooperative Short Sale at Bank of America could be at risk.
A Day in the Life of a Top Producer
Elizabeth Weintraub is a top producer agent in Sacramento
Does the public care whether their Sacramento real estate agent is a top producer? Does the public even know what a top producer is, and why should it matter? It doesn’t. And I say that as a top producer, not as some aspiring real estate agent who hopes to make it big someday. I don’t think I’ve ever heard a seller announce that she needed to hire a top producer. That’s because the public tends to think every Sacramento real estate agent is a top producer. The truth is you’ve got closer to your 1% in this business, and then there’s the other 99%. But who really cares?
Some agent was mentioned in a REALTOR magazine about having sold more than 200 homes in 2 years. I thought, wow, that’s a lot! It made me wonder how many I have sold. See, I’m so busy selling real estate in Sacramento that I don’t always have time to count my big ‘ol stacks of money. I pulled up MLS and entered my ID, and asked it to show me sold transactions for the past 2 years. My number for October 11th was 199 transactions. My jaw dropped. I kid you not. That’s pretty spectacular, especially when compared to my early days in Sacramento, after I moved back to California from Minnesota.
I recall sitting at the manager’s desk at the Lyon office in midtown Sacramento. I was looking at my performance for the year. I think back then I sold around 20 homes a year. Respectable. Decent. More than enough to qualify for Master’s Club at the Sacramento Association of REALTORs. I was complaining and asking why I wasn’t doing better, that I had so much extra time on my hands which I could be utilizing in my business, and kibitzing in general. I felt that I was capable of doing more, selling more homes, but I wasn’t doing it.
It’s not like I had some grand plan that I implemented. No big epiphany. I just put my nose to the grindstone and didn’t look up for several years. Grabbed every business opportunity I spotted. Held open houses every week. Handed out my business card to strangers. Took Floor Calls and talked with walk-in traffic at the office. I did not discriminate except to try to weed out the crazy people. Somewhat nutty people are OK. The downright screwballs and looney-tunes, not so much. But by not discriminate, I mean I did not turn down a listing for a $30,000 condo anymore than I would reject a $1,000,000 listing in Granite Bay. And I agreed to work on short sales.
An agent in San Diego said the other day that listing short sales was so much easier than listing a regular home with equity. She said there was no need to address commission nor sales price. I believe that those two things generally are not really a big issue in a regular transaction. But maybe that’s just the way I do business. I look at the bigger picture. The bigger picture is a satisfied and happy client. A happy client means referrals. Referrals means I don’t have look for business. I make a client happy when I give them what they want.
If I am selling a client’s home quickly, with minimum fuss and at the highest price we can possibly get in the market place, that’s what a client wants. They want to trust their agent. They don’t want to sell real estate themselves, or that’s what they would be doing. They’re not really hung up on whether they are paying me X amount or Y amount, because I am giving them what they want. I tend to exceed expectations.
Today, I am meeting with a seller of a duplex in Foothill Farms. It’s a regular transaction. He also wants to buy a home in midtown Sacramento. I am taking a probate listing in River Park, over in East Sacramento. That home needs a bit of work. I might list a home in Fair Oaks, but that seller hasn’t yet decided whether she wants to finish remodeling the home or sell As Is. I met with her yesterday, and she needs to make some decisions fairly soon.
I’ve got two short sales to put into escrow today, an Active Short Contingent and a Pending Short Lender Approval. Just finished filing the purchase offers. I’m writing this in the dark. The sun hasn’t come up yet. So, if you’re an agent reading this and wondering why your life doesn’t mirror that of a top producer, you might try getting up earlier in the morning and squeezing more into your day. None of this sleeping-in-until-noon business. And don’t focus on becoming a top producer. Focus on the business at hand. The rest will follow.
How to Get $10 a Day for a B of A HAFA Short Sale
We just closed a Bank of America HAFA short sale yesterday that had started in January. This was my second Bank of America HAFA short sale closing this month. The one that closed last week was much worse by comparison. In this particular HAFA, I was fortunate to represent an extremely detail-oriented seller who had completed all of her paperwork immaculately and upon receipt. This escrow should have flowed just like clockwork, yet it took 10 months to close. Within 30 days of opening the file in Equator, we had approval from the second lender, Green Tree, and all documentation submitted and verified, including two completed BPOs. Still, it took 10 months.
By the time Bank of America gave us its first B of A HAFA short sale approval in May, the approval at Green Tree had expired. Despite our pleas, Green Tree closed the file. We reopened the file at Green Tree and started over. There were the usual battles at Green Tree: calling the seller at work, harassing the seller for payment, threats of short sale charge off, and finally we said: fine, send the file to charge off. See, this is the thing — Green Tree can reopen and re-approve a file in 2 to 3 weeks, what it takes Bank of America 3 to 4 months to do.
To add to the horrors, Bank of America then abruptly closed the file early July. It was a mistake. We had asked for an extension but no, they closed the file. We tried to reverse the soft decline, Tweeted the Social Media Team, escalated the file to the Executive Office, but to no avail. Of course, by this time, Green Tree approved the short sale a second time, while we started the process over with Bank of America.
Bank of America assigned an escalation specialist to the file. This negotiator managed to get approval two months later, insisting her performance was perfectly satisfactory. You’re telling me that a HAFA initiated in January and closing in October is perfectly satisfactory? This is why many sellers would rather poke out their eyeballs than do a Bank of America HAFA short sale. The only benefit to a seller is that $3,000 payment. Which worked out to a return of $10 a day.
I reflect on this and wonder what we could have possibly done differently. The answer I come up with is not to have applied for a B of A HAFA short sale at Bank of America. But when a seller insists on a HAFA, that’s what I do. It’s not my decision to make. This particular seller figured she had 10 months to wait, so it didn’t matter. As long as she closed by the end of the year, she was satisfied, but I wouldn’t go so far as to say she was happy about it.
The other element in this transaction was the buyer. The extremely patient, dedicated and committed buyer. We selected the right buyer, which is always key to a successful closing. It could have been much, much worse. I could have had to sell this Elk Grove short sale three times instead of only once.
As an experienced Sacramento short sale agent, I have been closing Bank of America HAFA short sales for a long time. I am Equator Platinum Certified and a Certified HAFA Specialist. If you absolutely want to do a HAFA short sale through Bank of America, I doubt there is much I haven’t seen, and I’ll be happy to help you close it. Just be forewarned.
The Three Prices for a Home in Sacramento
I hear all sorts of phrases from sellers when it comes time to price a home. I think they all went to the same school of ways to sell your home in Sacramento. Often, they want to price it too high, and they justify this by saying, “I don’t want to give it away.” Come on. Have you ever seen anybody give away their home? Hey, I found this sitting out back by the dumpster; will you take this deed off my hands? OK, maybe if it’s a short sale. Or, they will say, “Let’s test the market.” OK, but what if you fail the test? You only get one chance at being a brand new spankin’ listing. It’s like Goldilocks, you don’t want to be priced too high or too low. You want to be priced just right.
Pricing a home to sell is an art. It’s also a science. I listen to sellers because, believe it or not, I don’t always know everything. I realize that’s a difficult concept to wrap your head around, a Sacramento real estate agent who might admit she still has stuff to learn and is not the master puppeteer of the Sacramento world of real estate. Because stuff constantly changes. But I believe I have a pretty good handle on figuring out the best price for a home in Sacramento. Moreover, at the moment, I am selling homes at astronomical prices. That’s because it’s a seller’s market in Sacramento. A wild and crazy seller’s market. This nutty market doesn’t mean one can throw logic and reason out the window, though.
There are always 3 prices for a home:
- The price the seller would like to receive.
- The price the buyer wants to pay.
- The price the buyer’s appraises it at — and who ultimately has the last word.
If you get an appraiser from some other town — which isn’t hard to do these days — the appraisal can be too low. Sometimes, it’s because the comparable homes used by the appraiser to justify value sit in a different neighborhood, even though they are within a half mile of the subject property, and those homes in an adjoining neighborhood could be worth much less. An appraiser who is unfamiliar with the neighborhood wouldn’t know that fact.
The way pricing works is unless you receive a cash offer, your home will be assessed by the buyer’s appraiser. If there are no comparable sales for your home, the appraiser will use the sales that are available. This is why you need to examine the comparable sales — particularly the pending sales that will become your comparable sales — before you put your home on the market. If there are no comparable sales to justify your desired sales price, perhaps this is not the time to put your home up for sale. Perhaps you should wait and watch.
Of course, you will then miss the best real estate market in Sacramento since 2005. I don’t think you want to do that.
The No Pressure Sacramento Real Estate Agent
Wanna know a secret? I am really terrible when it comes to follow up for developing my Sacramento real estate business. By that I mean I wait for people to call me back. I don’t hound them or ask over and over if they are ready to buy or sell a home in Sacramento. My strategy is to be patient. I figure if they want to buy or sell, they will let me know, and that’s probably not a very good strategy for a Sacramento real estate agent to follow. That’s not what they teach in real estate school, you know. They teach you to be a lot more aggressive. To call, prod, email, push, inquire, check up on and keep one’s fingers on the pulse of business.
If some Sacramento real estate agent followed me around and picked up the business I let fall by the wayside, she or he could make a good living in real estate. Much of being a success in real estate is being in the right place at the right time. It helps to have experience, skill and knowledge, but those things aren’t necessarily essential in the real estate business, it pains me to say. Everybody sells real estate differently. No two agents are the same.
Since I move a lot of inventory, my approach is somewhat different. I prefer to be analytical and study each situation to determine the best strategy. Go for the highest price. I figure that’s part of what I’m getting paid for — to do the best job possible for my clients. That involves waiting until my sellers are ready to sell, for example. Once I’m given that green light, I’m working with lightning speed.
Still, I can’t help but wonder how many sellers lose my business card, forget my name or decide to list with their Uncle Joe or neighbor down the street simply because I didn’t continue to bug them to list with me. Well, it doesn’t really matter in the long run. It’s not in my nature to bug people. If they want to list with some other real estate agent, that’s OK.
I just sold my 95th house for the year yesterday. That’s only counting the sellers, the listing side. It doesn’t take buyers into consideration at all. It’s a good life, selling homes in Sacramento. That’s what I focus on. The business at hand. You want no pressure and a job well done? Give this Sacramento real estate agent a jingle. Call Elizabeth Weintraub at 916.233.6759. I answer my phone, too.
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