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Hey See This New Listing: Remodeled Home in Foothill Farms
5901 Meghan Way, Sacramento, CA 95842 is for sale at $180K.
My new listing hit the market yesterday, it’s under $200,000, and it’s a remodeled home in Foothill Farms. That’s all you really need to know but I’ll give you the rest of the details. The living room has laminate flooring that looks like real wood, and crown molding. You will also note an oversized stained glass front door and a ceiling fan.
The seller is a house painter by profession, evident by some of the two-toned rooms. You’ll find ceramic flooring in the kitchen and dining area, an updated kitchen with granite counters, newer cabinets, stainless appliances, and plenty of storage space. Seller says the refrigerator can stay, but you’ll need to ask for it in the purchase contract.
One thing you need to know about this new listing and the remodeled home in Foothill Farms is it is a short sale, and not just any ordinary short sale, it is a Freddie Mac short sale with two loans. This means it will take a considerable amount of time to negotiate, perhaps 90 days. So enter that time frame into your equation for buying a home. If it works for you, then this might be a good time to buy a home in Foothill Farms.
The home features 3 bedrooms and a remodeled bath, with ceramic floors and a new vanity. There is also a big back porch that is enclosed and presently used for storage. Of course, the garage holds two cars and is attached. The seller will remove the above ground pool in the back yard.
The main thing this home needs is to repair or replace the siding. For that reason, it probably will not pass inspection for an FHA or VA loan. But if you’re willing to fix the siding prior to closing, and that can generally be arranged during your 30-day escrow period after approval, you could probably use a government loan to buy this remodeled home in Foothill Farms.
Call the listing agent, Elizabeth Weintraub, at 916.233.6759 for more information. 5901 Meghan Way, Sacramento, CA 95842 is offered exclusively by Lyon Real Estate and Elizabeth Weintraub at $180,000.
How A Nationstar Short Sale with Freddie Mac Closed After 6 Months
Even small children are excited to close a Nationstar short sale © Big StockPhoto
You won’t find one Sacramento Realtor in town who wants to sell a short sale home three times, but every so often, despite precautionary measures on the part of the listing agent, it can happen, and definitely was the primary cause of yet another short sale home taking 6 months to close escrow. It’s generally not the short sale banks. It’s the crummy buyers and, yes, even their buyer’s agents are often to blame for failing to vet the buyers.
We put this Nationstar short sale home on the market in mid April, during the hottest time of the year in Sacramento that one can possibly sell a home. It still took 2 months to get a list-price offer. Idiots were submitting lowballs, pushing, demanding, when the comparable sales clearly supported a higher price. Finding the right buyer takes longer this year but eventually one shows up.
When we received a list-price offer, we discovered the mortgage had recently been sold to Freddie Mac, which meant we could no longer do a HAFA short sale, which was our first choice. But it was also good news in a way, because having Freddie Mac as the investor meant that this Nationstar short sale would not move to the auction process, which often can mess up things 10 ways from Sunday. We really dislike those Nationstar auction scenarios. Many delays and they never seem to work.
Freddie Mac asked for a slightly higher price and the buyer foolishly canceled. A month later, we found another buyer and went back into escrow. That buyer never deposited funds into escrow, for some reason. The seller gave the buyer a Notice to Perform and when the buyer failed to meet the terms, the seller canceled the buyer. It was during this negotiation with Freddie Mac when we discovered that although the sales price was fine, the net was not, which meant we had to reduce the amount the second lender would receive to meet the demand.
At this time, close to the end of September, we found our third buyer. This buyer was cash, fully vetted and invested in closing. The second lender let us know it needed to net more than our revised offer of $3,000. We added the small difference to the buyer’s contribution rather than raise the price, but the first lender rejected that idea, still we had to try to for the buyer’s sake. In the end, we added the difference to the sales price and everybody now seemed excited to close except, the day of closing, both banks rejected our final HUDs.
The new arm’s-length agreements that both banks produced allowed for a rent back from the seller, which is a new twist in short sales. Rent backs used to be prohibited. The sellers needed to rent for 30 days, had deposited funds into escrow and that’s what the banks objected to, primarily because the negotiators are not really trained in how to read HUDs. The Nationstar negotiator continued to insist that the rent was part of the proceeds, when it was a deposit from the seller.
Credits, debits, the process hurts their little heads.
Good thing this was a cash transaction, and we were not required to comply with RESPA, because we moved the rent deposit to a credit on the buyer’s side of the HUD. Both banks approved the HUD, with only 45 minutes left in the day to record. Which we met. Under the wire, successfully closed another Nationstar short sale.
Same Fannie Mae Short Sale Wrinkle But Different Approach
In short sale forums across the country, agents are lamenting the problems associated with Fannie Mae short sales and Freddie Mac on short sales, but I suspect that many short sale agents in Sacramento never even bother to look up Fannie Mae loans nor Freddie Mac loans prior to commencing the short sale — because some of them are way too focused on themselves and the fact they got a listing instead of putting the focus where it belongs: on the client, on the transaction itself.
It’s true that Fannie Mae and Freddie Mac cause havoc in a short sale. What else is new? But at least they are trying to do something about their muddled mess, even if it’s fairly ineffective, they get a B-plus for effort. One of the newer components of these types of short sales is our ability as a Sacramento short sale agent to request a pre-approved sales price.
The sales price, I should note, is the list price, which is not necessarily the BPO value. Of course, that’s been the problem all along, the BPO has very little to do with the price that Fannie Mae and Freddie Mac demand. This is like trying to pat your head with one hand while rubbing a circle on your stomach with the other. Then there’s the question of whether the offer price needs to meet the list price because we still don’t really know how much Fannie Mae or Freddie Mac will accept.
So, far, list prices are still above market value.
This is different than when Fannie Mae or Freddie Mac, after 8 or more weeks of processing the short sale, notifies us of its demand for a higher price. This is often a strategy that means: the government wants to send the home to foreclosure, but we don’t want to come right out in the open and admit it. This is the strategy that has agents across the county up in arms and frustrated with our government sponsored enterprises (GSE). I don’t really know why the GSE’s adopt this strategy, but in my world, I’d rather get this information on the front end than the back end, and so would my sellers.
That brings to question the status in MLS after an offer has been received. Because even in its new practice, Fannie Mae and Freddie Mac cannot seem to get us the pre-approved value prior to an offer. If we change the status in MLS to Pending Short Lender Approval, it means we don’t want any more offers. If the offer we have received is not close to or above the pre-approved price, we could be hosed if the buyer won’t raise the price upon demand, and we won’t get that demand from the GSE until we are closer to closing.
My solution for these dilemmas is to leave the file in Active Short Contingent status and allow backup offers.
What is the Problem With 2014 Sacramento Short Sales?
The problems with Sacramento short sales in years past used to lie with the banks and the buyers, but those days are long gone. Buyers and short sale banks are not the source of our misery today. Most of the buyers who enter an agreement to buy a short sale are willing to wait it out and realize there are a few fees the bank might not authorize such as pest and home warranties and 100% of the escrow fee. They possess realistic expectations. The banks have invested money and effort into establishing entire short sale departments that mostly did not exist from 2006 to 2008. They’ve put systems and procedures in place, and are constantly tweaking their efficiency and effectiveness.
There are some banks that face little struggles now and then such as the Chase HELOC departments in Equator and the banks that try to satisfy regulations and cope with the fallout from the National Mortgage Settlement, yet cause months of delays due to ineptness, but for the most part, you can’t really blame the banks anymore when a short sale takes forever. OK, you can blame Fannie Mae and Freddie Mac, but even those guys are shaping up their systems. Rarely a day goes by when I don’t receive a timely email from somebody at Fannie Mae to say by golly they have received the BPO, and they’re still working on a pre-approved value. It’s better than a poke in the eye with a stick, even if it’s sorta meaningless after 2 weeks.
I’m not getting a lot of pushback and attitude from buyers either because they are educated now. They do their own homework online, they talk to their buyer’s agent, and they’re prepared to wait for short sale approval. They realize that when they go into an escrow in which the Best Sacramento Short Sale Agent is negotiating, that escrow is likely to close. I cannot remember the last short sale that did not close, and I’ve closed hundreds of them — more than any other real estate agent in a 7-county area since 2006.
The problems I’m seeing today do not stem from buyers nor the short sale banks. Nope. They cannot shoulder the blame anymore in today’s Sacramento short sale world. Instead, the problems tend to stem from the sellers themselves. There’s not always a full proof way to figure out which sellers deserve help and which don’t really give a crap. So, try not to blame the agent if the short sale goes south because the sellers messed it up. Most of the short sale agents I know are professionals who care deeply about their sellers and sometimes can inadvertently overlook their shortcomings.
Short sale agents need to be more vigilant, especially since short sales make up such a small portion of our market (about 10%) — short sales now appeal to smaller pools of buyers and will take longer to sell. Fact, Jack. My advice to fellow Sacramento short sale agents is try to make certain the effort you expend is for a seller who is willing to cooperate and see it through to the end. Otherwise, cut the losers loose. You owe it your own sanity, and you owe it to the buyers. You may represent the seller, but you still owe honesty and good faith dealings to the buyers.
Feds to Allow Current Mortgage Payments for Short Sales
I realize how horrible it sounds when our government tells a seller that she cannot be current on her mortgage payments if she hopes to do a short sale. For years, the government has been telling people to stop making mortgage payments, if you can believe that. It’s true. Fannie Mae and Freddie Mac, government-sponsored entities, require a default for a short sale. Come November 1, though, all of that changes. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, yesterday announced new streamlined short sale guidelines, effective November 1, to permit a short sale in eligible cases of hardships without a delinquency. It’s about time!
This means the feds will allow current mortgage payments for short sales. What a relief for sellers worried about delinquencies. The thing people don’t realize is there are different types of short sales. The type of short sale depends on the investor. Rules that govern a traditional short sale do not apply to Fannie Mae and Freddie Mac, including other types of short sales such as FHA or VA or CalVet. And let’s not even talk about the grandmother and granddaddy of all short sales: the Fannie Mae HAFA short sale or Freddie Mac HAFA short sale. Many short sale agents would rather be forced to walk barefoot across hot coals than to do a Fannie Mae HAFA short sale or a Freddie Mac HAFA short sale because those are painful enough for everybody.
Not only will a seller be able to remain current on her mortgage if she has a Fannie Mae or Freddie Mac loan, but the new guidelines give servicers delegated authority. Banks that service these loans can determine whether the seller’s hardship will qualify for a short sale. Common hardship reasons are:
- death
- divorce
- unemployment
- relocation
- medical
Plus, if a borrower must relocate due to a commute of more than 50 miles to work, which is a fact of life for many of us in California, that constitutes a hardship as well. This is a welcome relief for this Sacramento short sale agent and my sellers in Sacramento. Being current on mortgage payments for a short sale is a huge improvement. It’s like we’ve been beating our heads back and forth in the doorway for years. You know how good it feels to stop!
Now if we can just get Fannie Mae to stop sending short sales to auction because the short sale can’t close prior to the trustee’s auction date, we’ll have something to truly celebrate. We need a way to postpone the auction in a Fannie Mae short sale. Come on, FHFA, I know you can do it. We’re rooting for ya in Sacramento. But for now, us hungry little squirrels, we’ll take the peanuts you toss.
