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Why the Buyer Matters for a Natomas Short Sale Offer
A good Natomas short sale offer involves a committed buyer.
Although it is rare nowadays to list a short sale because there are so few in Sacramento anymore, it doesn’t mean I change how we handle a Natomas short sale offer. The same rules apply, same principles and same practice. I know there are other listing agents who might grab the first Natomas short sale offer that comes along, but that’s not how I advise my sellers.
Having sold more short sales than any other agent in a 7-county area over the past 10 years, my experience as a top Sacramento short sale agent speaks volumes. We don’t want to drag the process out any longer than necessary. If the buyer refuses to conform to the practices we put into place, they are not a viable buyer for us. It blows my mind that buyer’s agents fight us, but they often do. They don’t think ahead, they don’t stop to consider the harm they cause, to the seller and the listing agent and everybody else in the transaction, when their buyer is not fully committed to the process.
But that’s true about a lot things. They want the world to conform to them and not the other way around. We don’t work with buyers like that. If they want to make unreasonable demands, submit lowball offers, fail to deposit earnest money, they can go make somebody else’s life miserable and not my seller’s.
We spent 8 days working with a buyer’s agent, who was wonderful, and her buyers, who were lovely and qualified, before going into contract. The buyers started out by asking for a shorter time period. We expect a commitment for 90 days and, if we get it done sooner, we look like heroes. But short sales can sometimes take 3 months. My experience has shown if a buyer won’t commit to 3 months, they are not candidates for a short sale. They are the type who might bail when the first shiny object diverts their attention.
They also thought the list price was negotiable. I am so freakin’ skilled at estimating market value and what a bank will take, that my sellers can rely on my estimate. If anything, prices could go up, not down. Eventually, though, after 8 days of negotiations, the buyers elected to accept our terms and our price. It was worth waiting for the buyers. It meant they were worth fighting for with the bank.
Sure enough, we got short sale approval for the parties within 6 weeks. We were also able to obtain a 10-day closing extension for the buyers since Trump’s FHA loan policy changes at the last minute messed this up. These buyers were a perfect match, and that’s what you need to close a Natomas short sale offer. We closed escrow yesterday, and the buyers now own a delightful home for $225,000 in Natomas. The most important component of many short sales is the buyer, next to choosing the right listing agent, of course.
Banks Do Not Care About Your Short Sale
Banks do not care about your short sale is the first truth for a Sacramento agent.
Even through our fast and furious Sacramento short sales over the past 10 years, banks still do not care about your short sale, and it amazes me that people expect a bank to care about individuals. It’s not just the buyers and sellers who want the banks to care about them, it’s their real estate agents, too. They search frantically for answers, for logic based on their limited experience, and they just want somebody to explain common sense to the bank. If only the bank knew . . . they cry.
It’s difficult, I know, to handle the bad news, but the first thing to realize is the bank doesn’t give a crap about you. Just get over that expectation. Banks do not care about our short sale sellers (their borrowers), the seller’s hardship or situation, and it doesn’t care how long the poor buyer has suffered during the process of the short sale. Banks do not care about your short sale. Hoping to make a bank care is like hoping Trump won’t win the Republican nomination.
You can read a pile of misinformation online about how banks spend more money to foreclose than to do a short sale, and much of that is garbage. Unless the writer handles the bank’s finances, the reader can’t know which is more profitable for the bank. Sometimes banks get paid more to do a foreclosure: from the government, from PSAs and from its own structured system. Hoping to explain to the Harvard- and Yale-educated asset managers why a short sale is more profitable than a foreclosure is pitiful, like supporting Ted Cruz.
Ditto with BPOs. The amount of money a bank asks for often has little bearing on market value, and yet agents often want to argue about the sales price of a short sale. Tell the bank how much work the home needs, a buyer’s agent will plead. Oh, please. Show the bank months of lowball offers, photos and estimates and one might make headway. Banks do not care about your short sale and they are not interested in opinions from those engaged.
Once you understand that banks do not care about your short sale, you can begin to move through the process. Just don’t expect to expedite through Equator since many of the major banks have now dropped that platform. I once handled 75 listings at a time but now you can count the short sales I sell today on one hand. Still, the attitude of bankers has not changed one iota over the past 10 years. And the veteran Sacramento short sale agents don’t expect it to.
Hiring a Bad Short Sale Expert Carries Consequences, Unlike Meeting, Say, Pope Francis
Margie Burgard, Pope Francis and Elizabeth Weintraub at Basilica Block Party
Another Sacramento Realtor might show you a photograph of the home in Elk Grove that just closed escrow, but I’m not just any ol’ Sacramento Realtor, as you know. Plus, when you have a photo of you standing next to, oh, let’s just say, the Pope, for example, well, you’ve got to share it, right? My sister Margie is on the left, and that woman with the crazy yellow hair — the result of a horrible bleach job at a salon on Riverside in Land Park, a hair salon, the name of which I shall not disclose but I won’t step foot in that salon ever again — that woman with the horrid hair, is your Sacramento Realtor. Plus, it’s a better photo than homes in Elk Grove with dead lawns.
We look pretty snazzy with Pope Francis, I have to admit. My sister just sent me that picture because I realized we had it shot last July when my husband and I were in Minneapolis for the Basilica Block Party. It’s not really the Pope, you know. It’s a cardboard cut-out. We could not get into see the Pope while at the Vatican, you have to reserve a Papal Audience months in advance. But this is second best thing, so we’ll settle for it.
Unfortunately, my sellers of the home in Elk Grove that just closed escrow had settled on an agent to sell that home before they were referred to me. If they had come to me first, they probably would not have been subjected to an almost year-long drama that went nowhere. The sellers had initially listed the home in March of 2014 with an agent who claimed to be a Sacramento short sale expert. At that time, they were current on the first mortgage and there was enough equity to pay off the first mortgage without including the first mortgage in the short sale.
For some reason, according to the sellers, the so-called “short sale expert” had reduced the price of the home to such a low point that it was not approved at that price. The sellers also claim that the “short sale expert” had not sent them the approval letter from the second lender but instead kept the letter from them for almost 6 months. Professionally, I have no idea how something like that could happen because it makes no sense and, if true, is against the law. But I checked the listing, and it was indeed listed about $50,000 below the approved price, and it was listed as pending expired, which was against MLS regulations.
I explained I could not do anything nor advise until the sellers and their short sale expert had parted ways. The sellers tried to cancel the listing, and the agent steadfastly refused. He felt that he’d put too much work into it, according to the sellers. Yet, if the allegations are true, he held on to the approval letter for a much higher price and did not share the letter with the sellers nor did he change the price and terms in MLS. The sellers said they had to threaten the agent and his brokerage to obtain the cancellation. They were furious. I would be, too. After the listing canceled, the old history listing contained fairly snotty comments about the condition of the property, stating it had all sorts of problems, that conventional financing was difficult and only cash would work. That’s like sabotaging the sellers in my book. What is wrong with some agents? Don’t answer that.
In any case, I wasn’t a party to any of that squabble, and we listed the home at a reasonable price we felt the bank would accept. Because of that previous listing, and given the fact the home did need a bit of pest work and a new roof, it took us 7 months to get a valid offer. I sincerely want what is best for my sellers. That previous listing hurt us a bit. We received lots of pretend offers and lowball offers and tons of showings, but we held out for that buyer we knew would pay the price we needed. The home sold at list price, I’m pleased to report, which was 15% less than the comparable sales — a fabulous deal for the lucky buyers! The buyers did not have to do any pest work nor put on a new roof to get a conventional loan. There were no lender required repairs.
We encountered a small glitch near closing. Because of the time that had passed, now the first mortgage and the second mortgage were both involved in the short sale. At the last minute, while I was in Minneapolis visiting my dying brother, the negotiator refused to approve the HUD because the buyer’s agent was crediting a small amount toward the buyer’s closings costs. We went around and around about California Civil Code 580e. I know that code inside out, and the basis of Senate Bill 458 that created paragraph E, and I insisted they approve the HUD, and their lawyers finally saw the light and agreed. So we closed. Just in the nick of time.
I just received an email last night from the sellers telling me I was right, they felt now that a tremendous burden had been lifted from their shoulders. They were very grateful for the referral to me. And this is what makes what I do worthwhile. But geez, I wish they would come to me first.
A Short Sale Home in Fair Oaks with Two Loans Closed Fast
As I drove away from my closed listing of a short sale home in Fair Oaks yesterday, I wondered why I picked up the Supra lockbox. It’s not like I can use the lockbox for anything ever again now that MetroList has rescinded its agreement to allow us to continue using our Supra lockboxes until they die. I had more than 70 lockboxes and did not exchange them all in the rip-off 2 for 1 Supra lockbox exchange because MetroList promised we could keep them. Which means now I have about 40 lockboxes rolling around in my trunk that are useless because MetroList backpedaled.
Well, I do know why I picked it up. I retrieved my lockbox because I owed it to the new buyer of that home in Fair Oaks to retrieve. Because I have a responsibility to my profession. We, Fair Oaks Realtors don’t go around leaving our personal property attached to homes in Fair Oaks, even if it’s useless to us. I wonder, though, how many agents will just leave their lockboxes? You know how some agents are.
Homeowners can thank MetroList for all those abandoned lockboxes that I predict will be happening throughout Sacramento.
The home in Fair Oaks that just closed was a short sale I had listed in MLS on May 15th. It was a Fannie Mae short sale; Seterus was the servicer for Fannie Mae, and I’ve closed hundreds of short sales since 2006, which means I have knowledge other agents do not. One of the things I know about Fannie Mae is it does not want to see any offer prior to 5 days on the market, with at least 2 of those days the weekend. Makes sense, Fannie Mae expects decent exposure on the market, no side deals. I also have an account at Fannie Mae’s portal that keeps me up-to-date on new rules and where I expedite my short sales.
We had multiple offers, too, and chose the buyer most likely to wait for approval, which is the buyer whose agent is cooperative and submits the offer the way we need it submitted for approval. You’d be amazed how many agents contest what is actually in their best interest and their client’s best interest, but what can I say?
Come August 15th, 3 months later, we had closed escrow, and there were two loans on this short sale. I also hear agents say they don’t want to deal with two loans on a short sale, probably because they’ve had bad experiences. They haven’t worked with me. I do many short sales with two loans. It’s really no big deal.
I’d say 90 days from listing to moving out of the short sale home in Fair Oaks is a fairly decent approval process. I didn’t see the buyer yesterday or I would have thanked him personally for going into escrow with us. My seller is thrilled beyond being thrilled, and extremely relieved, and that’s the most important thing to me.
P.S. Look out for those chickens in Fair Oaks.
Put Sacramento Short Sales on the Market Prior to Default Notice
A Notice of Default filing starts the clock ticking on Sacramento short sales. © big stock photo
Unlike the hey days of pre-2012 in Sacramento, we are not seeing a lot of short sales in the area anymore. About 4% of all the listings in Sacramento County at the moment are active short sales, as compared to about 75% a while back. Having a small percentage of homes for sale that are underwater is good news for just about everybody, though, except that short sale seller who needs to sell her home.
In case you’re wondering, and I suspect you probably are, my own caseload of short sales has dramatically decreased, but I still manage to sell and negotiate a large number of Sacramento short sales. I thought the number was much smaller than it is, but so far this year almost 1 out of every 4 sales I’ve closed has been a short sale. It means I am still pulling in a huge chunk of the short sale business and most likely continue to rank as the best Sacramento short sale agent in town.
Even though this month my closed sales for the month of July should top $6 million, only two of those homes were short sales, and they were small price tags. It is possible that July could be my biggest month this year. One of those two sales, though, was a real struggle in West Sacramento. The main problem was the dog urine smell in the back bedroom, compounded by additional problems: a rotting pergola that needed to be removed, additional pest work that was required and a broken HVAC. Not exactly every home buyer’s dream home.
On top of this, as expected, Bank of America had threatened to release the servicing, and the investor Fannie Mae demanded a higher sales price, which I challenged because it was incredibly out-of-line. It would not appraise for the buyer’s lender. Fannie Mae agreed to reduce the sales price but it was still higher than the buyer wanted to pay, but not so high another buyer wouldn’t pay it. That’s often the secret to these negotiations.
However, the sad news is other short sales are lingering, even priced way below the comparable sales, they sit. Buyers are passing by those listings in favor of fast closings and sellers who will make repairs. Some short sales take 3 months to sell today. That’s not good news if a seller has a Notice of Default filed already.
