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A Silver Lining to a Sad Successor Trustee Sale
This successor trustee sale focused on a silver lining at the end.
Right before I received the “confirmation of closing” email for a successor trustee sale near Elk Grove, I had received bad news from my vet about our cat Horatio. Poor little guy had a bit of diarrhea, so I took him to the River City Cat Clinic in Land Park. We adopted Horatio about a month ago. The vet suggested we test him for leukemia and AIDS, since he came from a shelter. Well, the vet called yesterday afternoon to say the results came back positive.
When I was 23, I lost my Himalayan, Cairo, to leukemia. I had visited that cat daily in the hospital. He could barely stand up with tubes taped to his legs, he was so sick. I would reach through his cage and gingerly hold him, trying not to sob. He didn’t make it. I can’t do this again, is my first thought.
Never in a million years did I expect our newly adopted cat to have leukemia. They don’t vaccinate for that when your cats are indoor. Tessa and Jackson have not been exposed to the leukemia vaccine. I can’t test either of them for 30 days. Our cats could die. All of the cats at the shelter could die. Horatio could die. I’m absorbing all of that when the email popped up informing me the successor trustee sale had suddenly funded and closed.
I had met that seller when I came out to the house to do my visual inspection. Met both daughter and mother. Days later, BAM, the mother collapsed into a coma. Daughter and I listed the home. Her mom is in hospice now. Just thinking about life and its preciousness was enough to make me want to cry, but I had to call the daughter to let her know the sale had closed escrow. How are you, she asked? Well, I wasn’t planning on saying anything personal, but I could not say peachy keen. I shared what happened with Horatio. I was a bit raw at the moment. We talked about her mom. End of life options.
You can’t always bottle up stuff. It’s not healthy. Now I sometimes fight it, but despite my analytical nature, I am a compassionate person. I try to show empathy for my clients. To be aware. Everybody has some horrible thing going on in their lives, when it comes right down to it. Stuff we share, stuff we don’t. But it’s there.
OK, silver lining time. There is always a silver lining.
I set aside my tears. I reminded the daughter about how many offers we had received, four in all. The very first offer was from a young couple trying to use the CalHFA program for first-time home buyers. This is a program that is hard to get an offer accepted for in our Sacramento seller’s market. Everybody wants the cash buyers or the conventional buyers. Some listing agents wrongly pigeonhole CalHFA buyers and shove them down the totem pole. The only kind of buyer that struggles more with offers than a CalHFA buyer is a VA buyer.
Of all the offers we had received, the CalHFA offer was the lowest. It was only $5,000 over list price. I want what is best for my seller. We want the committed buyer who will close and not try to make the seller pay for repairs or or closing costs. We want the highest offer. But in this instance, I pointed out to the seller that I felt our list price was the top of the market, and it might not appraise for more. All of those other offers are pretty much worthless if they are contingent on an appraisal, and it doesn’t appraise (and they were contingent).
Why not give the CalHFA couple a break? I suggested. Why not sell to them? We can make an agreement that they will take care of any lender-required conditions or repairs, and let’s let them buy the house. They have a family and are just starting out. Wouldn’t your mom prefer to let a young family take over her house? Breathe new life into a home that brought the mom so much joy over the years? It’s really the same money no matter how you look at it due the appraisal situation, and these buyers deserve consideration.
The daughter agreed. The CalHFA buyers were the first offer, too. They had waited through the weekend, after the open house, and that patience won the house, even though there were multiple offers. This successor trustee sale closed, by the way, at my original suggested sales price. The appraisal was at list price, not above. I was right all along. And that’s why it pays to hire an experienced Sacramento Realtor.
The daughter and I wish the new homeowners many happy years in their new home. She and I each are enduring our own pain, you can’t get away from it in life, but it’s good to acknowledge that something wonderful also happened yesterday.
What Happens After the Notice to Buyer to Perform?
Buyers who receive the Notice to Buyer to Perform could be subject to cancellation.
Few home sellers in Sacramento really look forward to executing a Notice to Buyer to Perform, but sometimes that real estate document can become a necessity. ¡Si, yo necesito! That generally come about because the buyer has not taken some sort of contractual action arising from the California Residential Purchase Agreement. Things such as removing the inspection contingencies or appraisal contingency. Just because the contract by default gives the buyer 17 days to remove inspection contingencies does not mean those contingencies automatically expire on Day 17. NO, contingencies can continue until closing if not released.
(I say NO like el Español. With emphasis. The thing I love about my Español lessons is the native speaker uses such passion. He says NO like NOH! Short and sweet. Like he means it. Don’t bother him anymore. Go away. Stop talking. End of story. It’s an attitude, people, that goes into speaking Spanish.)
Back to my story. If the buyer has not released contingencies, and we’ve made several requests to the buyer’s agent, the next step is to issue a Notice to Buyer to Perform. The document gives the buyer another chance to perform prior to cancellation of the contract. The seller is not required to cancel the contract, but most sellers will issue a unilateral cancellation if the buyer fails to take action.
Sometimes buyers stop responding to their agent. But what happens if the buyer’s agent stops responding? That could be a different story. It’s not unusual for an agent not to reply to an email, text and voicemail, especially if that agent is occupied elsewhere, like some are, yet I’m not condoning that kind of behavior. It’s triste. On the other hand, an agent could be in the hospital, out of the country or involved in an emergency. It’s not a good idea to cancel the buyer simply because the listing agent has received zero communication from the buyer’s agent.
In that instance, I will call the buyer myself to inquire. Por supuesto, I first tell the buyer’s agent what I propose to do. If he or she does not respond to me, though, ¡qué pena! It’s not always the buyer who is failing to perform. It could very well be the buyer’s agent. As a Sacramento listing agent and a Realtor, I am required to be fair to all parties. No sense in penalizing a buyer because the buyer’s agent dropped off the face of the earth. I’m just here to get the job done for my sellers.
A Solution for Home Buyers Facing a Contingency Release Deadline
A Sacramento real estate agent who represents sellers is generally vigilant about following the terms of the purchase contract and asking buyers for a contingency release upon the specified dates. Unless otherwise altered, buyers typically agree to release inspection contingencies, loan and appraisal contingencies by the 17th day. The listing agent is sometimes viewed as an ogre or a downright meanie if her seller asks the buyer to perform in accordance with the contract.
It’s not unusual after a request for contingency release for this listing agent to receive from the buyer’s agent a tirade of blistering words, mish-mashed together in a denunciatory nature, sounding as though the buyer’s agent is angry but lacks an ability to grasp the right words to get the point across. Sort of reminds me of Daffy Duck sputtering you’re despicable. The buyer’s agent generally ends the diatribe with the supposed justification of: I’m just protecting my buyer.
One can’t help but wonder that if an agent is protecting the buyer, why is the agent advising the buyer to breach the contract?
As a standard of practice and care for my clients, we send buyer’s agents an email notice as a courtesy the day before a contingency release is coming up. We ask politely to send us the CR form and remind the agent that a contingency needs to be released. In some cases, you’d think we asked them to strip naked and dance in the streets. Shield the eyes. Some agents have never heard of the contingency release. Some prefer to explode over it. Fortunately, most buyer’s agents respond in an appropriate manner. But some don’t.
If we don’t receive a contingency release, though, the next step is to ask our sellers if they want to issue a Notice to the Buyer to Perform. This gives the buyers 2 days to produce the document or the seller may have the right to cancel the transaction. Will the seller cancel if the buyer doesn’t perform? Some sellers will cancel the purchase contract faster than you can say sore losers shouldn’t talk to the press after losing at Belmont Stakes — especially if the sellers have backup buyers willing to pay more.
The biggest issue is generally not the inspection contingency that generates the reluctance, it’s releasing the loan contingency. Not to mention, there’s a whole ‘nother discussion as to whether a Small Claims Court judge would even award an earnest money deposit to a seller, but buyers and their agents don’t know that. The simple solution is if a buyer needs more time — due to the way loans are scrutinized with all the delays going on in today’s market — then the buyer, through her buyer’s agent, can ask to extend the contingency through an Extension of Time addendum.
It’s not the listing agent’s job, however, to tell the buyer’s agent what to do or how to protect the agent’s buyer. An Extension of Time (ETA), if agreed to by all parties, can extend a particular contingency period in the purchase contract. Stay in contract. Don’t breach it, don’t let it expire, stay in contract.
