Email ElizabethTwo Short Sales in the City of Davis
There are two short sales for sale in Davis, California. One of those short sales is mine, listed by Lyon Real Estate, and the other is listed by a competitor. At the moment, we have 69 homes for sale in Davis, according to MLS. My Davis short sale is listed at $339,000. The second short sale is listed more than $100,000 higher. Both of these short sales are located in the same area — MLS features 5 separate areas in Davis. But the second short sale has a pool, and it’s in better condition.
My listing needs a little fixing up, but hey, what do you want for that price? There are only 4 homes for sale for less in all of Davis, and those homes are smaller. We’ve had a few showings for this short sale because it’s got a lot of other things going for it. Um, like price. And, then, there’s the price.
But I’m wondering if buyers in Davis don’t like to buy short sales. We received yesterday a lowball offer. We thanked the buyer and his agent for their interest, and expressed regret that we could not accept such an offer. ?The agent sent me an email, in the interest of promoting his client, I suppose, and said, he wished me “luck with my protocol” in Davis — which is expecting a buyer to commit to buying a short sale. We do ask buyers to commit. That protocol just makes sense. If you want to buy a house, you should act like a buyer. ?And then he added, that he is 15 minutes and a galaxy away from my Sacramento short sale environment where I could “pull off” that kind of approach.
Huh?
I want you to know that one of my team members lives in Davis. Her name is Linda Swanson. She is also a broker like me, and not just a salesperson. I love Linda to pieces. Linda has almost 25 years in the real estate industry. She’s worked for several prominent new home builders, too, and was a sales manager for one of them.
Linda’s heart and soul goes into selling homes in the four-county area of Sacramento, including the city of Davis. I would trust Linda with my life. She adores first-time home buyers and has the patience to show home after home until the buyer is 100% ecstatic about her selection. I don’t have that kind of patience, to tell you the truth, which is why I rarely work with buyers. I prefer the listing side of this business.
But Linda does, and she is an extreme professional, always ready with a smile and to help because she loves her job. Smart, witty and efficient. She is also my co-agent on this listing in Davis. If you would like to buy a two-story home in Davis for less than $340,000, you should call Linda Swanson on the Elizabeth Weintraub Team. We are working with Chase Bank on this short sale, and they might get the BPO today. If you’re willing to invest a little sweat equity and can handle a paint brush, you could transform this home in Davis. Call Linda Swanson at 916 607 0111.
Selling a Short Sale Rental in Sacramento
A rental short sale is becoming more ubiquitous. I have several new Sacramento short sales going on the market tomorrow that are occupied by tenants. I suspect part of what is fueling the increase is the new HAFA supplemental issued a few months ago that pays tenants the relocation incentive. This was a brilliant move by the government.
Tenants often worry when an investor decides to sell their rental as a short sale, and with good reason. They might be uprooted. Nobody wants to move against his or her will. That rental is a home to a tenant. A tenant doesn’t want strangers traipsing through. They feel inconvenienced and rightly so because they are inconvenienced. I try to be very respectful of tenants and tenants rights when I list a rental property. Because selling a rental property is an intrusion for the tenants.
Sometimes, tenants refuse to cooperate. I’ve met the guy in the rolled up t-shirt with a pack of cigarettes stuck in his sleeve — the guy who is holding back the barking pitbull by the choke collar and won’t open the screen door. But I still have to take photographs of every listing and complete my agent visual inspection. I can sense from the body language of some tenants that they are not happy with my presence. I try to be understanding as I step over the garbage strewn about on the floor, wondering if they dumped it there for my benefit or if that’s how they live.
Tenants also worry the home will go to foreclosure and they’ll get evicted. Yet, tenants in foreclosure have rights, too. Even so, sometimes they stop paying rent, although they’re not supposed to. See, even if the landlord doesn’t pay the mortgage, the tenant still owes the landlord the rent, whether or not they like it. However, not every Sacramento short sale is in foreclosure. Some landlords keep their payments current during the short sale. Some pay just enough to keep the home out of the pre-foreclosure process.
A tenant in Hollywood Park last night was not eager to show the home. He wished the seller would have waited a few weeks, but the fall season is here and the time to sell is now. Once October is over, our home selling season in Sacramento slows down. It’s a seasonal thing. He wouldn’t let me put on a lockbox. He refused to give me a time to show. I kept talking. Then, finally, as I was preparing to leave the home, he paused in the doorway and said, “Look, I know you’re just doing your job. You’ve been very professional. Why don’t we show the home on Saturday, from noon to 2 PM?”
Bingo. That’s what I came to get. A showing time without buyers having to make an appointment. Buyer’s agents don’t like to make appointments with tenants. That’s because they’ve had the experience of showing up at the appointment time with buyers in tow and nobody is home. But in today’s entry-level real estate market in Sacramento, a few hours of showing is all the time a seller probably needs to get that home sold. Well, that, and a competent Sacramento real estate agent.
It Takes a Village to Close a Sacramento Escrow
Pia is stressed at the vet.
Welcome to home buying stress. Anybody who is buying a home in Sacramento today is stressed out. I don’t care who you are. There is no way to buy a home and not be stressed about it, so don’t feel alone. Even if you’re lucky enough to have beat out all of the competition and get your purchase offer accepted, you still need to get through underwriting. Lenders are much more strict than they were 5 years ago, more restrictive than a year ago or last month, it seems. Just because your lender says you’re fully approved does not mean you will get a loan.
I’m not trying to give you one more thing to worry about but getting approved by underwriting is a concern. I had one seller cancel an escrow a few months back because the buyer asked for too many extensions. It wasn’t even a short sale, it was a home with equity in Elk Grove. No matter what the buyer did, she could not close her loan. The reason she could not close her loan was because the IRS was backlogged. She needed her tax returns from the IRS. She couldn’t get them. My seller got tired of waiting and canceled. I didn’t blame her.
Another buyer in Lincoln could not close on her approved short sale. Something happened to her financial situation so the USDA loan she was trying to get was no longer a reality. She could not afford the FHA loan under its program terms, so she ended up losing the house. She lost her earnest money deposit, too, if I recall correctly, or maybe they are still fighting over it. My seller sold to another buyer who could perform.
Just last night, a Roseville buyer found out her “fully approved loan” did not pass underwriting. She needs to now haul in her parents to be cosigners, which means escrow will be delayed. All I can say is thank goodness this escrow is not a short sale and we don’t have to beg and plead with a short sale bank for a short sale extension that we may or may not receive. My seller expected to close this week, and now she will have to wait another couple of weeks or start with over with a new buyer. Oy.
My cat Pia is feeling very stressed. In fact, I had to rush her to Davis last night for an emergency vet visit. We are not ruling out a urinary tract infection but it could just be stress. She is stressed for a number of reasons. The vet says my work stress might affect my cat. Working as a Sacramento real estate agent can be stressful, even if it’s suppressed. Who knew stress could transfer to your pets? She is also very upset because I sold the dining room table, not to mention, her buddy, my husband, has been unavailable to her. Her environment has changed. Cats hate environmental changes.
The real estate environment has changed in Sacramento. This is not your mother’s residential resale market. It’s a world with wacky mortgage and appraisal guidelines, extreme competition, not only from other home buyers but from cash investors; and very few homes for sale. Better hope you have a good real estate team on your side. Believe me, it takes a village to close escrow these days. I won’t sugarcoat it for you. But the Elizabeth Weintraub Team will do everything in our power to get your escrow closed.
The Short Sale Law of Averages
I think the law of averages says that for every three good things that happen, something else awful will happen. So, no matter what, I’m always ahead, right? Like receiving 3 short sale approval letters on a Monday (of all days) for 3 Sacramento short sales leaves room for something else to explode. I didn’t know if I would be able to pull two of those short sales out the fire. We had a huge disagreement between the second lenders and the first lenders. It was the usual disagreement: The first lender wanted to pay less and the second lender wanted more.
But in the end, they met in the middle. There was a bit of compromise. Negotiating a short sale is not always about power plays. It’s about give and take and options. It’s about having a Plan B and a Plan C. It’s about about patience and not letting personal feelings about anything enter the equation. Mr. Spock would have made a good short sale negotiator. James T. Kirk, not so much.
In the second short sale, it had been a long battle between two lenders as well. The bank originally wanted to give the seller many, many thousands of dollars. But the second lender refused to approve that scenario, and that was understandable. I don’t know if it’s because we wore them out with our incredible staying power or because of our luck that HAFA regulations had changed in June so we could give the second more money, but we finally brought both parties to an agreement.
Just as we’re patting ourselves on the back for a job well done, a short sale set to close this week blew up. All of a sudden the buyer backed out. Oh, he gave some lame excuse like they all do when they cancel but bottom line is he bolted. After 11 months of waiting for HAFA short sale approval from Bank of America. That makes little sense. We were so close to closing. This is like crawling across the desert without water to find a mirage.
See, agents often ask why I ask so many questions, why I insist on commitment, and this is why. Because we want buyers to close the short sale after we obtain short sale approval.
An Investor Can Do a HAFA Short Sale
This week I am working on listing several investor-owned short sales in Sacramento, one of which will be a HAFA short sale. People think that an investor — a non-owner occupant — can’t do a short sale, but an investor can do a short sale. An investor can even qualify for a government short sale program such as the HAFA short sale, or my very favorite streamlined type of short sale: the Bank of America Cooperative Short Sale. Unfortunately, though, the HAFA Supplemental from last June removes the seller’s incentive portion, the $3,000 cash for a short sale that typically goes to the seller, so there’s not much of a reason to do a HAFA short sale for an investor in California. You have to live in the property to get the $3,000. Which means the tenant gets the cash.
There is a big reason to do a HAFA from a bank’s point of view. The bank gets paid from the government to do a HAFA. You might think so what, the money is insignificant. What is it? $1500? Until you stop to consider that $1500 times 1,000 short sales is one and a half million dollars. Put another way: $1500 times 10,000 short sales is $15 million. You wonder why Bank of America is pushing the HAFA short sale? Besides the National Mortgage Settlement, there’s that $15 million multiplied over and over. You can’t get past the first stage in Equator until the seller talks with the bank about a HAFA.
But not every HAFA is a nightmare to do. Some you’d rather poke out your eyeballs, some not. Sometimes, it is necessary to do a HAFA because a regular short sale has too much scrutiny. The government continually changes how it handles its HAFA short sales. I am a CHS, a Certified HAFA Specialist. I paid attention in class. It used to be that the investor needed a definite hardship to do a HAFA, but that’s not necessarily true anymore. I suspect part of the HAFA process was overhauled because nobody was doing them. People were shunning the HAFAs because the restrictions were difficult to meet. But they’ve loosened up.
It used to be you had to live in the home, and now you don’t. It used to be that the mortgage payment had to exceed 31% of your gross monthly income, and now it doesn’t. It used to be that you had to show an extreme financial hardship, detailed in your hardship letter and documented by tax returns, and now you don’t. It used to be you couldn’t have large sums of cash in the bank and now it doesn’t matter. I had a client complete a Chase HAFA short sale, and he supplied bank statements that showed $80,000 in his savings account. It wasn’t an IRA or a retirement account, it was cash. His financials reflected disposable income. Yet, the government gave him $3,000 and Chase approved his short sale. Yes, a Chase Bank short sale with no hardship.
If you’re worried that you don’t have much of a hardship, and your lender is Chase Bank or Bank of America, you can probably do a HAFA short sale. Investor guidelines will dictate. You just gotta have the story. I find that Wells Fargo will do strategic short sales as well as long as the investor is delinquent. Although, as a Sacramento short sale agent, it is against the law for me to tell an investor or any seller to stop making a mortgage payment. I can’t give legal advice nor suggest a seller become delinquent. I am required to say if a seller stops making a mortgage payment, a seller could lose his or her home. But if you’re gonna lose the house anyway, what the hey.
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