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Why Your Mortgage Lender in Sacramento Matters
Out of the 7 closings this Sacramento real estate agent is working on this week, only 2 transactions, according to the mortgage lenders, are closing are time, which makes closing delays pretty much par for the course for this week. Why? Because of the mortgage lenders. A few of the escrows are delayed because the buyers could not qualify for a conventional loan and were informed at inception that they should choose FHA but instead opted for conventional. Or, at least that their mortgage lender’s story and the guys are sticking to it. In others, everybody else thought somebody else was doing a job that nobody else was doing. Total cluster-you-know-what.
It’s also possible that the buyer’s agent felt the buyer didn’t stand a chance in hell of getting an FHA offer accepted upfront so the agent wrote the purchase contract with conventional terms and obtained the preapproval letter showing conventional financing, figuring who gives a rats if the transaction doesn’t close on time. But most buyer’s agents aren’t that devious. I suspect the truth of why some mortgage lenders can’t perform lies somewhere in between.
When a buyer runs past the closing date, the contract has expired. The seller has the option to cancel the transaction. The seller is not obligated to give the buyer more time to close the escrow. A lawyer might argue on behalf of the buyer and say the buyer invested money for the home inspection, paid for a pest inspection, perhaps other reports, and showed a good faith effort to close. She might say it’s not the buyer’s fault that things were delayed in underwriting or the mortgage lender messed up.
But that’s a tough argument if the contingencies haven’t been released, and the seller might believe the buyer is in breach of contract. The seller might give the buyer a Notice to Perform and then cancel. And let’s face it, many first-time home buyers barely have two nickels to rub together, and they can’t afford to hire a lawyer. So, they better choose a mortgage lender who can properly advise them and then follow that advice.
Here is my advice for home buyers today. For crying out loud, mortgage lenders all have access to pretty much the same ol’ bag of money, and you’re not gonna save 1/2 point here nor there, so pick the mortgage lender in Sacramento who can perform. Pick the company that won’t lead you astray. Pick the loan officer who will have your back. Don’t go with the guy who dishes out apologies when you’ve lost the house.
In all of my years of working with and referring business to Dan Tharp, this mortgage lender in Sacramento has never disappointed.
Tips For Canceling a Short Sale Offer in Sacramento
Some buyer’s agents do not know that when a buyer and a seller sign a purchase offer for a short sale listing, they have entered into a binding contract to buy a home. I don’t really know why agents often treat a short sale like the red-haired stepchild, but it’s a real transaction just like any other real estate transaction. If you sign a short sale offer, you’re committed.
This means if the buyer elects to cancel after approval, a buyer can do so. The RPA contract put out by C.A.R. is written in favor of buyers. Probably because buyers sue more often than sellers. Sellers are typically happier after closing than buyers. It’s rare that a seller feels that he or she got the raw end of the stick. But buyers? Whole ‘nother story.
Some people believe that the only time a buyer cannot cancel is after all contingencies are removed, and that’s a myth. They can still cancel. Buyers can always cancel. But in that event, they could get sued because they don’t have a contractual right to cancel, although, that’s where they will argue.
If a seller does not sign a buyer’s cancellation simply out of spite, a seller can be facing a $1,000 fine. The seller has no right to ignore the cancellation, if the buyer is within the time period to cancel. But that’s after 30 days. So, you can’t really force sellers to immediately sign a cancellation for a short sale offer especially unless you’re standing over them with a sledge hammer, and no agent has the inclination to do that.
But what happens when it’s the other way around and the sellers want to dump a buyer? How is that handled? Before my sellers cancel buyers from a short sale transaction, we give them a chance. It’s the fair and equitable thing to do, even if they are not fair and equitable to us. Besides, contracts stipulate. We send them a Notice to Perform. We spell out what we want them to do, and if they don’t do it, we can unilaterally cancel that short sale offer.
However, if you as a buyer wants to cancel, you need to sign a cancellation of contract. Not a withdrawal of offer and not an addendum. Buyers sign the top and bottom portion and date it, along with escrow information to release the earnest money deposit. Buyers also need to state a reason for the cancellation. When buyers sign a short sale addendum, agreeing to wait for short sale approval, the buyer is supposed to wait during that period of time. But bottom line, if a buyer doesn’t want to buy, nobody can make ’em. I suppose it’s possible they could be sued for sending a seller to foreclosure, but that’s for lawyers to argue.
For more questions about a Sacramento short sale offer, call your Sacramento short sale agent, Elizabeth Weintraub, at 916 233 6759.
Elizabeth Weintraub Can Sell Even This Home in Sacramento
People have asked this Sacramento real estate agent why her clients are so ecstatic about her to write such fabulous and expressive reviews after escrow closes. They ask how do I generate such positive feedback when I’m so busy? I generally don’t get the usual type of reviews that just say I did a good job and the clients would recommend me, and then they could go about their normal business and forget my name. Clients instead tend to say that the Elizabeth Weintraub Team does the supernatural and performs impossible feats, and they would pretty much strew rose petals everywhere we walked if they could afford it. Why do they say these things when all we really do is close that sale for them? I bet some people think we bribe them, but my clients are not the kind of people to accept a bribe or we might have tried it.
Here is an example of a remarkable short sale that closed against all odds in Sacramento. I started to work on this in July of last year. The seller did not have a key and the home was tenant occupied. I prefer that tenants move out because some are uncooperative and, even if they initially appear cooperative, soon as they learn it’s a short sale, many stop answering the phone or the door. Even though it’s against the law, they often stop paying rent, stop letting buyers see the home and all-in-all become a general nuisance. The seller hoped for the best.
I was my charming self, though, because Elizabeth Weintraub can sell, and persuaded the tenant to let us show the home on Friday afternoons. We quickly went into contract with a cash buyer. This was a buyer with whom we had closed another short sale in Antelope. He was a real estate agent. We asked him to produce updated proof of funds because his proof of funds was dated several months ago. Banks want docs dated within 30 days. He couldn’t or wouldn’t do it. So, after issuing a Notice to Perform and he failed to perform, the seller canceled this particular buyer.
The tenants were getting a bit testy by this time, but they cooperated and we went into escrow with another buyer, short sale buyer #2. Finally, the credit union issued a verbal counter offer. These responses are rarely in writing. The credit union demanded a higher price. They dinged around with this short sale for so long that the prices had gone up. I proposed the higher price to the buyer, but the buyer balked and elected to cancel, which in my book was a pretty stupid move because what kind of home would that buyer be able to purchase now? In a seller’s market when almost every property has a handful of offers? Not for me to worry about. Thank goodness I was not his agent.
We sold the home again to a new buyer in December: buyer #3 for this short sale. After battling the credit union for months, we secured short sale approval rather quickly this time. The buyer completed the home inspection and was getting ready to close escrow. The seller gave notice to the tenants and one of them moved out. The other tenant at the 11th hour refused. He told the seller that he wasn’t moving until the sheriff threw him out. The buyer’s agent called me to say the buyer was canceling because the buyer could not move into the home.
The purchase contract stated the seller would deliver the property without a tenant in it at closing. The seller could not deliver on the promise because one of the tenants refused to vacate.
My idea was to pay the tenant to move. That’s what he was angling for, cash for keys. It was cheaper than evicting him, and much safer than dragging him out in the back alley and whomping the living daylights out of him, which is what I suspect crossed some people’s minds at that point. But the buyer instead asked to cancel the escrow.
When it rains on your parade, you parade in the rain. I’ve learned that lesson in life. We put the home back on the market, pending rescission. In the confidential agent remarks, we wrote that:
- Potential buyers could not view the home
- Potential buyers could not view the home ever
- Potential buyers must purchase the home without ever seeing the inside of the home
- Potential buyers must purchase the home with a hostile tenant living inside.
- Potential buyers must pay about $25,000 more than our original list price
- The potential buyer’s agent would receive a severely discounted commission, an amount so low that most agents would refuse to even write an offer.
We received about a half-dozen full-price offers at those terms and conditions. Believe it. Because it happened. Because the real estate market in Sacramento is so insane and wild that a buyer would purchase a home they could not see with a tenant who would not move at the top of market value. Did I mention it needed to be all cash?
The existing buyer changed his mind about canceling and closed escrow last week.
Moreover, when a buyer’s agent told me last week that his buyer, who was purchasing a stripped out and vandalized home I had listed in north Sacramento, decided to try to renegotiate the agreed-upon sales price, the answer was no, followed by hell no.
If you’ve got a home to sell in Sacramento, call Elizabeth Weintraub at 916.233.6759. I’m more than happy to do it, and I guarantee you’ll be thrilled with my performance.
How to Buy a Pending Home in Sacramento
Sometimes, a Sacramento home buyer is in the right place at the right time. Or, better put, sometimes their Sacramento REALTOR is in the right place at the right time, and that means having her finger on the pulse of MLS. You’d be amazed at how few times during the day any given real estate agent gazes upon MLS, but that’s where one will find all of the action. Ya gotta cruise the news. If you think you can’t buy a pending home in Sacramento, think again.
Say, for example, that you are a Sacramento listing agent, and you’ve got a buyer who isn’t exactly cooperating. You might think: oh, who would do that in a seller’s market? A person like that would have to have a screw loose. But you would be surprised. Maybe it’s the buyer’s agent who has stopped responding to emails or phone calls. You might be astonished at how many agents struggle with communication issues or simply ignore attempts to reach them. There might be a contractual obligation that needs discussing such as putting an earnest money deposit into escrow, and maybe that hasn’t happened. That’s a warning sign a contract is about to be canceled and you might be able to buy a pending home in Sacramento. Or, maybe the buyer needs to release contingencies, and his 17 days has come and gone. Another warning sign. If you’re that listing agent, how would you get the word out to buyers that a listing might be coming back on the market soon?
Personally, I favor those big lights in the sky myself. Those honkin’ beams. Our days in Sacramento are getting shorter. Maybe with a bat insignia, like Batman. But I don’t have any of those. Can’t remotely run a scroll across the bottom of anybody’s iPhone like a CNN ticker tape. So the next thing that’s available is to do two things:
- If the purchase offer was more than the list price, raise the price in MLS and
- Slip “bring backups” next to the pending status in MLS.
It’s like going fishing. (Increased sales prices tend to gather more attention in MLS than a price decrease.) Minutes after that’s done, low and behold, this Sacramento REALTOR got a bite. I received an email from an inquiring buyer’s agent. She had shown a particular home in Sacramento to the buyer, and the buyer was very disappointed when it suddenly went into pending status, like they’re all doing right now. The buyer wrote an offer as a backup offer. Tip: To write a backup offer a seller can legally sign, one needs to submit a document that puts the offer into backup.
The seller signed the backup offer and issued a Notice to Perform to the buyer’s agent. The buyer failed to perform, so strings were cut and the new buyer slipped into place without this home ever going back on the market. So, if you are a Sacramento home buyer you might ask your buyer’s agent to glance over at MLS inventory several times during the day to see if there are any homes in pending status in which the seller wants a backup offer. This just might be your lucky day to buy a pending home in Sacramento.
