Email Elizabethbuying a short sale
How Are These Sacramento Real Estate Things Still a Thing?
My experience of working with agents over the past 40 years shows that you can’t change a narcissistic real estate agent, no matter how much that agent might desire to change, if the agent is clueless. It’s generally cluelessness that causes a self-centered agent to say silly things. After all, agents are not immune to ignorance in any greater numbers than any other person in the world. It’s the bell curve distribution. You’ve got bad doctors, bad politicians, bad school teachers, bad law enforcement officials, and bad real estate agents, along with the good.
Some agent implied recently that she felt the REALTOR Code of Ethics is an over dramatization of the industry and appeared as though she preferred to pick and choose which Articles to adhere to and ignore the rest. Because this agent must operate in a vacuum, dancing alone to tunes in her head that only she can hear. Or, perhaps she is not a REALTOR because only REALTORS must adapt the REALTOR Code of Ethics. You can’t change agents like that. They don’t want education. How is it that some agents are not a REALTOR? How is that still a thing?
Earlier this week another agent said she was not submitting an offer for her buyers on a short sale listing because we would make her promise to stop writing offers for that buyer. Duh. It’s a good thing we avoided getting tangled up with that disaster, but how is this type of ignorance still a thing? After 10 years of Sacramento short sales, how are real estate agents still under the goofy impression that it’s a worthwhile endeavor to write a bunch of offers for a buyer when a buyer can purchase only one home? It’s a waste of time for everybody involved, including the buyer’s agent. And it’s considered against the law.
Let’s see, Ms. Shit for Brains . . . you want to write an offer on an Elk Grove short sale but you don’t want to commit to waiting for short sale approval? You want us to accept your buyer’s offer, remove the home from the market, submit the entire short sale package to the bank, advise you weekly on our activities, negotiate the short sale, resubmit endless financials and, after 8 to 12 weeks, while the foreclosure doomsday clock is still ticking for our sellers, finally produce a short sale approval letter only for your buyer to announce that she has purchased a different home?
You want to waste the time of all of these dedicated people: the Sacramento listing agent, her team members, transaction coordinator, escrow officer, title officer, the buyer’s lender and the sellers’ entire extended family on the off-chance that maybe your buyer will elect to perform at the 11th hour? What are you thinking? Where is your head? How is this still a thing?
Granted, some agents list short sales that they should not be listing because they did not qualify the sellers for the short sale or it’s priced inappropriately or they are using a third-party vendor for negotiation, but that’s not the case with this Sacramento Realtor. I have closed more short sales since 2006 than any other agent in a 7-county area. My short sales close. That’s because we choose to go into escrow with strong buyers who are committed to closing, and because it’s doubtful you will find a more qualified Realtor in Sacramento to negotiate your short sale.
But, seriously, after all these years, how is this attitude toward short sales still a thing?
Ways to Spot a Sacramento Short Sale Scam
As a Sacramento real estate agent — and just a long-term participant / observer in the world of life on earth — I tend to notice Sacramento short sale scams, and scams in general. My radar is always on the alert. It’s pretty difficult to bamboozle this agent. While other agents laugh and scoff when I ask what if, it generally turns out that I am correct in my initial assessments.
First, I listen to my gut instincts. You know, people don’t pay enough attention to their gut instincts, and they tend to mistrust that instinct because it’s not always based on logic. It’s telling you something for a reason, is what I find. If you feel uneasy or uncertain, listen to your instincts. There could be a sign you’re just not picking up with the side of your brain that processes that kind of information but it’s still sending a signal to you, regardless.
The scam I see run in Sacramento short sales over and over is that of secret collaboration between the listing agent and the sellers. There is some kind of confidential arrangement going on. Maybe a family member or a friend wants to buy the home as a short sale and then either later live in it, rent it out or flip it. The parties involved might not even see it as a scam, but that doesn’t make it any less fraudulent.
Sacramento short sale scams are almost always mortgage fraud because the parties involved don’t fully disclose to the lender and, if the lender knew, the lender would not have approved that short sale. But there are most likely other laws and, if the agent is a REALTOR, various Code of Ethics that could be violated.
I just spotted a suspicious short sale in MLS today, because a buyer in San Jose called about it. There are 3 homes in a row on the same street owned by people with the same last name, all in various stages of foreclosure, one purchased less than a year ago. But the short sale stands out like a sore thumb.
Here are the things I see that buyers and their buyer’s agents might want to question. They result in downplaying the home and telling a buyer’s agent not to bother to write an offer. Let me say that any one or two of these alone is not a reason for suspicion but when they mostly all apply to your transaction, you could be in trouble:
- One photo in MLS, with a car in the driveway
- More than 30 days on the market with no history of pending status in a hot neighborhood
- Brief and odd marketing comments such as: 4 bedroom home on a public street needs TLC. (What kind of agent writes like that?)
- Out-of-area real estate agent
- Out-of-area real estate company
- Agent shares same last name as the sellers (relatives cannot sell a short sale)
- Commission offered is less than what short sales pay (no reason for that)
- Showing instructions state: call listing agent (who probably does not call back)
Be careful out there. There are the crooks who know they are crooks, and then you’ve got the ones who don’t know which end is up yet are still crooks. You can’t tell the difference. But you can stay clear if you smell trouble.
Should a Sacramento Home Buyer Cancel Escrow?
A home buyer called yesterday to ask if she could cancel her escrow, dump her buyer’s agent and become a client with the Elizabeth Weintraub Team. She was very unhappy with her present real estate agent’s performance, but I suspect that unhappiness was due more to miscommunication than inability or inexperience or monkey business. And, like many first-time home buyers in Sacramento, her escrow was a short sale. See, unless you’re a listing agent who sells hundreds of short sales — and there aren’t very many of us in Sacramento — an agent probably won’t have the answer to every single piece of drama that can pop up in a short sale. No answers = client confusion.
This buyer was concerned because HSBC had twice increased the sales price. Is this normal, you might wonder? Yes, it is. There are many reasons for a price increase during short sale negotiations. There could be several BPOs. The servicer might establish a market value that is different from the price point determined by the investor. Not to mention, prices are inching upwards in Sacramento. I closed a Roseville short sale last week that had 3 price increases during processing, and the last adjustment exceeded 10%. A short sale condo in Rancho Cordova was bumped more than 20% when a buyer balked and walked and a new buyer stepped in.
Her suspicions were aroused because the price increases were not presented to her in a formal manner — via a worksheet or letter from the bank. Instead, the listing agent had called the buyer’s agent to provide the verbal communication. The buyer felt this procedure was unprofessional. Yet, that is the procedure for most short sales. I don’t blame a buyer for being wary. I wouldn’t like it if I was simply informed that I needed to pay $10,000 more without proof from the bank nor an appraisal to justify, but that’s how short sales work.
The thing is if a buyer doesn’t want to pay it, another buyer will pay it. That’s what the bank is banking on. And the bank doesn’t care. You might think the bank cares that the home needs paint, new carpeting, the roof leaks, but I’m telling ya, the bank doesn’t give a crap.
In this particular instance, the buyer disclosed she was FHA and applying for the CHDAP program. Holy toledo, the only thing more problematic than that would be a VA buyer and, even then, it would be a tight race. In fact, a VA buyer might have an edge over a CHDAP. The basic way to close a CHDAP in a short sale is to get a short sale extension. A short sale extension is not always possible.
My advice to this buyer — after telling her I can’t give her advice because she’s in contract and under agency with another agent? My solicited advice was to stay in escrow. For heaven’s sakes, don’t cancel. She does not realize how lucky she is to be in escrow and be buying a home in Sacramento. For every buyer who wants to buy an entry-level home in Sacramento, there are 9 more who won’t be able to buy. They will get beat time and time again by cash investors or conventional buyers. Buyers would give up their eye teeth to trade places.
Welcome to our Sacramento housing market in the spring of 2013. If you’re in escrow, stay put and don’t whine.
Adding Short Sale Buyers to the Deed After Approval
Requests to add or subtract individuals to a deed should never happen after short sale approval, yet it pops up more frequently than you might imagine. If you’re a short sale buyer, this advice is for you. People think because an idea occurred to them, they can make it happen at the last minute, and short sales are rarely in a position to accommodate these sudden changes. I know that short sale buyers don’t see the big deal. But it’s a huge deal. They don’t realize that the short sale bank probably approved only the individual(s) who signed the purchase contract with the seller. Do not try to add short sale buyers to the deed after approval.
The reason is if a short sale buyer wants to change the way she holds title on the deed, it’s almost impossible to do and still close within the required timeframe provided for in the short sale approval letter. One can’t just change from a corporation to husband and wife as joint tenants or from a couple to a sole individual without the short sale bank’s blessing. I had a short sale last month in which originally a husband and wife were holding title, then title changed to the wife as her sole and separate property and, after approval, financing restrictions required we revert. This was a Bank of America short sale and I suspect since the husband was originally noted on the paperwork, the bank was able to approve an additional name at closing without further ado. But this doesn’t happen very often. That was kind of a fluke.
Most of the time the approval letters contain the name of the buyers and, if the those names are altered, the short sale requires a new approval. Some banks make this Sacramento short sale agent start the process over. From the beginning. Because the bank did not approve John and Mary. The bank might have approved only Mary. It’s not as simple as you might think and short sales are not always logical. Not to mention, there is no guarantee that because a short sale was approved first time around that it will be approved a second time around or that the same lender will still be servicing the loan.
There are other complications to adding more short sale buyers to the deed at the last minute. It is possible that the buyer’s lender might not allow it. If Mary is taking title as her sole and separate property while obtaining a new first mortgage, her lender most likely will not let her add her son and daughter to the title without including them on the loan, which may mean they need to financially qualify. If she adds them to the loan after the transaction closes, she could be guilty of alienating title, which could be cause for acceleration: calling the loan due and payable. Moreover, the arms-length agreement Mary signs for the short sale lender might prohibit transfers within a certain numbers of days after closing.
For all of these reasons and more, the time to think about how you want to hold title when buying a short sale is when you sign the purchase contract. Don’t wait for short sale approval before you make up your mind or change it at the last minute because you could be asking for trouble. If you’re gonna do it, write up an addendum before approval is received and submit it with a new HUD during the short sale negotiation process. Please don’t try to add short sale buyers to the deed at the last minute.
NGR is Why Buyers Cancel a Short Sale
Buyers tend to cancel a short sale for NGR.
This Sacramento short sale agent rarely loses a short sale for any reason. Oh, sure, sometimes I will end up with a seller who pleads with me to put her out of misery and to let her home die a faster death through foreclosure, but thank goodness those situations are unusual and scarce. Most sellers want to do a short sale regardless of how painful. They are willing to pay the emotional toll to the troll known as the short sale bank negotiator at their lender’s bank.
My success rate is an open book. Anybody can go to my website and look at my closed short sale transactions for the year. Apart from all of my closed listings, visitors can also view the list of closed short sales in a separate link titled closed short sales in Sacramento. I close short sales from El Dorado County, to Yolo County, Placer County and all the way to the communities of Wilton and Galt in Sacramento. If it’s a short sale, you’ll probably find me there.
I attribute this success to 2 things. I don’t give up, so I don’t listen to the word No. And we try to qualify the buyers. To lessen the chance a buyer will cancel a short sale. A short sale is like juggling many different pieces with a future goal for everybody to all end up in the same place on a certain day, and yet each of those pieces is like a cat, wanting to go in its own direction. You want to juggle cats for a living? Welcome to the life of a Sacramento short sale agent.
We all want to reach that happy spot, the end of the rainbow. And yet, every so often a short sale ends up going back on the market, generally right after it’s been moved into pending status, upon short sale approval. When it does, buyer’s agents call me to ask why the buyer canceled. That’s a normal question but typically the answer is NGR. I’ve weeded out all of the ordinary objections upfront. After short sale approval, there is basically NGR to cancel.
Oh, but what if something is wrong? Like the furnace won’t turn on or god forbid should the bathtub fixtures not match those in the sink? Welcome to home ownership. The next house in 6 months could have something malfunction as well. You want the house, you buy it. You don’t want the house? Next.
I shot the photo on this page yesterday. It is the rainbow over Bora Bora on New Year’s Day. Welcome to 2013.
