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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.
If You Can’t Buy a Home in Sacramento
How do you keep pushing on when the Sacramento real estate market is beating you down? I don’t know how some buyer’s agents are surviving out there in this desert of no inventory. One such veteran agent in Sacramento told me today that he is thinking about leaving the business. This is a dreadful market because there are buyers who will never buy a home in Sacramento in this market, especially if they are looking in Natomas or Elk Grove. It’s positively disheartening for many. At an open house in Elk Grove on Saturday we had more than 100 buyers come through. So far, we have almost 30 offers. Only one buyer will win.
Because I list so many homes in Sacramento, I see a wide variety of offers come across my desk. They range from lowball offers to asking price to 20% over market value. I can tell from those offers that we basically have two types of agents in Sacramento right now:
- The type of agents who talk to each other.
- The type of agents who work in a vacuum.
I also realize that a buyer’s agent can lead a buyer to water but she can’t force the buyer to drink. I’m not so sure that buyers truly understand what is going on. This climate makes me a bit concerned that buyers might blame their agents for their failure to buy a home in Sacramento when it’s the market and not necessarily the agent’s fault.
Years from now we might look back at this like the 1930s Dust Bowl. At least during that horrible episode in our country’s history it was pretty clear what was happening because you couldn’t see two feet in front of you. In Sacramento, everything looks normal. For Sale signs are in the yards. Agents are accompanying buyers to show homes. People are smiling. But it’s a nervous smile, and underneath they are depressed and worried and anxious. We need inventory in Sacramento.
Well, here’s my solution, because you know I have a solution, right? I’m not the kind of Sacramento real estate agent to paint this dismal picture and not offer you a solution. I’ve been in the business for almost 40 years, and that’s long enough to learn a thing or two. The first tip is if you’re gonna give up, then go home and crawl under the sheets and stay there because there is no room in this market for whiners.
The second tip is turn over the unturned stones. There are homes in Sacramento that are not getting showings. Not because there’s anything wrong with them. It’s because they are either overpriced homes, in need of repair, or on the market for too long. There is nothing wrong with a home that needs a little bit of work. All you need to do is adjust your attitude toward hiring a contractor or doing some work yourself. Often the prices of these homes can be adjusted a bit to compensate for the work needed. Align yourself to the fact that if you want to buy a home you need to look at all of the homes that are available and not just the cherries.
You want to know where the ants go, right? You follow the ant trail. At the end of it, you will find ants. It’s too simple of a principle for many people.
There are homes for sale in Sacramento that buyers and agents are ignoring. There is no competition for these homes. No multiple offers. No stabbing each other in the back and clawing your way over dead bodies to get to the top. These homes are sitting quietly, waiting to be discovered. Go out there and discover them. Find a way to write an offer and make it work. If you need help and want to buy a home in Sacramento, you can call the Elizabeth Weintraub Team. 916.233.6759. We’re putting buyers into homes.
If You Are Not A Weintraub Client
Just because I deal honestly with other people doesn’t always mean people will deal honestly with me, and I can live with that. I can’t change other people; I can only change myself, but I have to really want to change, ha, ha, little joke. I mean, what other business in the world can you be in that involves working with other people without a contract or guarantee that you’ll ever get paid? Apart from the state of California, I mean. The real estate business is an odd duck.
You know what else is odd? U. S. Customs. I went through U. S. Customs in Los Angeles earlier this week when I came back from French Polynesia. I filled out my custom’s form in meticulous detail, and drove my husband crazy trying to compute the value of each item I had purchased in the islands. We had to convert from Franc-er-roos to American dollars, and the conversion rate was different on different days, but we managed to arrive at a value to report.
The guy at the first window stared at my declaration and gasped, “You spent !!!! (a bazillion dollars)?” He stared into my eyes. My husband volunteered, “Hey, I was stunned, too.” I answered in the affirmative. Yes, I did. Well, then I was ordered to go to Section B. Oh, no, not Section B! I grabbed my suitcases and marched over there. Thank goodness for those new rollers on luggage that allow a person to maneuver her luggage with one finger, that’s all I’ve got to say.
I handed my declaration to the guy standing behind the sign that read Section B. He studied it. His eyes narrowed, brows crisscrossed. He, too, made the bazillion-dollar comment. Then he questioned, “These pearl necklaces . . . do they have a tie clasp?” I retracted a necklace that did and showed it to him. He asked about the others, but they were gift wrapped. He did not make me unwrap them. He said simply that he would presume they were all similar, and he exempted them, adding that he believes that U. S. Citizens should get a break. I suppose it’s because I was not a “permanent resident” but instead a U. S. Citizen. I don’t know for sure but he gave me a break, and most likely because I told him the truth.
But I don’t always get the truth out of potential clients who approach me. I ask if they are working with another agent. Most of the time, a person will say no, she is not. Perhaps in her mind she is telling the truth because her agent is not standing next to her. She has her own definition of what working with an agent means. If the agent believes you are her client, then you are working with an agent.
The problem with working with an agent is this Sacramento real estate agent can’t work with a buyer who has an agent. It’s not ethical. It is against the Code of Ethics if a buyer or a seller is in contract, in escrow, with no intention of canceling and just wants advice, for me to respond. If a person has signed a purchase contract and not yet canceled, that person has a fiduciary because the agency most likely has been signed as well. Once a person is under contract, a person should not try to get advice from another REALTOR without first canceling the existing relationship.
Yet, all the time I see buyers and sellers on Zillow and Trulia and other websites seeking advice from REALTORs. Most of these buyers and sellers are in contract. They also contact me directly. They email or text or leave me voice mail messages, and they ask for my help. They probably think I am being a witch when I don’t respond or say I cannot help them, because they don’t know any better. They don’t know how agents work. It’s not that I don’t want to help, it’s that to do so would violate the Code of Ethics. On top of that, I am paid to help clients. That’s how I earn my living. If you are not my client, then you must either become client to get my assistance or find help elsewhere. I don’t make up these rules. But I do believe that what goes around, comes around.
If you are working with the Elizabeth Weintraub Team, you can get help from me or any of my team members. But you have to first be working with us. If you are working with another agent, you need to get your help from your own agent.
Photo: Gift shop in Bora Bora, which was probably sued by the owner of the rights to Fantasy Island, by Elizabeth Weintraub
Tiputa Pass in Rangiroa
Dolphins jumping in Tiputa Pass at Rangiroa
You think the holidays are a quiet time in real estate, but even if a Sacramento real estate agent is on vacation in French Polynesia, stuff can happen in monumental fashion. For example, I’ve been gone for only 5 days and during that period of time I’ve had:
- an Elk Grove home fall out of escrow and go back into escrow
- to rescue a pending cancellation due to changing buyer’s names on the deed at the 11th hour
- receipt of four short sale approval letters on four separate short sales to process
- a stove removal by a short sale seller that should not have been removed, times two.
- a demand for an elevation certificate spring out of nowhere
- to refer a seller to a short sale lawyer because I believe the lender lost the prom note
- and numerous inquiries about buying and selling homes in the Sacramento region
Yet, nothing insurmountable and that I can’t handle from French Polynesia. That’s because I have two invaluable things: 1) The internet. 2) The Elizabeth Weintraub Team. And quite frankly, I am completely confident my team members could handle any emergency that pops up — I think they like to humor me by keeping me involved.
I am replaceable.
What is not really replaceable is the rate at which we over-fish our oceans. The ice that is melting at our poles is not replaceable. The level at which our seas are rising is pretty alarming. The gradual warming of our temperatures around the world is disturbing. Bees and butterflies are in peril. When you put these things into perspective, my challenges seem somewhat miniscule.
We walked from our hotel about a mile down the road to Tiputa Pass in Rangiroa yesterday afternoon. I was hoping we would see tigersharks but we spotted instead dolphins jumping. This is one of the spots in the Rangiroa atoll that has broken and lets water flow from the Pacific into the lagoon and back out to sea again. A large freighter came through in the morning to dock inside the lagoon and left through Tiputa Pass in the afternoon. Below are a few more photos:
dolphins jumping at Tiputa Pass, Rangiroa, Adam Weintraub
Weintraub’s 2013 Real Estate Predictions
This Sacramento real estate agent and About.com homebuying expert finished her 2013 real estate predictions and forecast yesterday. It seemed like December 1 is a good target date to try to hit every year. It provides a healthy amount of time for people to argue with me before I head off to — this year it will be French Polynesia — my holiday vacation. And every year I get the same question: Elizabeth, how do you know this stuff?
I know this stuff because I look at the way things are going and I predict they will continue to move in that direction. Most of the time I am 100% on target with my forecast. Sometimes, things take a right or left turn or spin around and blow up, but not very often.
For example, one of my predictions is home prices will rise in 2013. They’re going up now in most major metropolitan cities. It doesn’t mean we have a recovery. It means inventory has shrunk and demand has grown. We’ve run out of homes to sell and buyers are clogging up the streets. I throw a home on the market and it’s like tossing bread crumbs to starving pigeons. They swoop down in droves and peck each other, jockeying for position to get a nibble.
Last year in my real estate predictions I talked about short sale fever. Oh, darn, there goes that song again in my head, White Line Fever. Nevertheless, I was spot on about that. Short sales took over and surpassed the position occupied by the foreclosure market. Many of the REO agents turned to try to do short sales. I don’t really agree that an REO agent is a good candidate to do a short sale because the qualities that make an REO agent successful are pretty much the opposite of the qualities inherent in an excellent short sale agent. 2013 will pretty much continue to be the year of the short sale.
The year 2013 will be an interesting ride. It marks my 39th year in the business. If you’re looking to buy or sell in Sacramento, Yolo, Placer or El Dorado County, rattle my cage. The Elizabeth Weintraub Team is well positioned to handle all of your real estate needs.
