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Sex, Real Estate Agents and Exclamation Points
I woke up late this morning because my cats let me sleep in. See, no exclamation point at the end of that sentence. Even though sleeping in was a very unusual thing to happen to me, even on a Sunday. I’m always up by 5 AM and writing. Except for the days I am not. I didn’t use an exclamation point in that sentence because it didn’t deserve an exclamation point. It was a bit profound but not profound enough to warrant an exclamation point.
I read a blog this morning on an agent website all about how real estate agents should use as many exclamation points as they possibly can because, because, I dunno, because they are completely unable to use words? Or, maybe it’s because they are incredibly lazy? Hard to say why anybody would feel the need to use an exclamation point to show excitement when words do it so much better.
Isn’t the public tired of, say, Sacramento real estate agents who hype, hype, hype, but have little tangible to say? It’s like the difference between an agent shouting: Buy this awesome house!!!!! and an agent who draws back the drapes to point out the perfect spot by the living room window to display a Christmas tree. It’s like showing up for job interview with a red ball glued to your nose, sporting orange hair. Too many exclamation points lose their emphasis and meaning.
My house collapsing into the Pacific ocean during a turbulent winter storm might deserve an exclamation point. A light overnight rain in Sacramento that streaks my bedroom windows does not. Placing too many exclamation points into a sentence is like walking into a room full of strangers, tearing off your clothes and screaming DO me, NOW!!!! Reserve your exclamation points to express orgasm. And you’ll probably have more of them.
Cash Investors, Pie Crusts and Robot Agents
There is an acronym company doing business as a limited liability corporation and trying to buy homes in Sacramento as a cash-infused investor. There are undoubtedly many such companies and investors vying for homes in Sacramento. But this one in particular canceled an escrow because it didn’t do its due diligence upfront, so I’m wary about them. This particular company has also hired at least 3 different real estate agents in Sacramento to throw offers at the wall. I know this because I have received offers from 3 different agents representing the same company.
You know, not a day goes by, honestly, in which I don’t answer my phone and hear the words: I am a cash investor. I suspect the callers feel I should treat them differently than I would anybody else, but they’re in for a rude awakening. Just like I am a number to them, they are a number to me. I realize they have little vested interest in the property or in meeting the seller’s needs. They probably have not even seen the property. If the escrow demands a special consideration, they are unlikely to provide it. They are not special. Their cash is not “king” to me.
It seems like the REO robot agents are being replaced by the robot buyer’s agents. The tide has changed from robot listing agents who represent banks and asset managers of foreclosed homes to robot selling agents who represent cash investors. These guys comb MLS daily looking for new listings, writing offers, uploading the purchase offers to DocuSign and emailing those offers to listing agents. You throw enough at the wall, something is bound to stick.
As a Sacramento short sale agent, I have to look out for my seller’s interests and help them to choose the most motivated buyer to close their short sale. As a general rule, short sale banks don’t seem to like limited liability corporations (LLCs). I’m not sure why, either. It could be that an LLC is in-your-face about profit, versus a home owner who just wants a roof over her head. In any case, it’s hard to get excited over these cash offers. If push comes to shove, they don’t shove.
You know, short sales involve a lot of frustration. I dodge a lot of whipped cream pies in this business. Speaking of pies and throwing crap at the wall, I’d like to share a story with you. It involves a pie crust. Those of you who have never made a pie crust may perhaps find it difficult to believe that pie crusts do not live in your grocer’s freezer. Yes, you can actually make a pie crust at home out of flour, salt, shortening and water.
The trick is to not overwork the dough. If you massage it and roll it too many times, it will become tough and crumble. I was probably 7-years-old when I made my first pie crust. I thought I had followed the directions explicitly but I was having trouble. It wasn’t sticking together. I blamed it on my rolling pin. After I had rolled out the dough, I tried to fold it into quarters and lift on waxed paper to the pie tin, but it fell apart. I rolled it again. It crumbled again. In a split second of frustration, I hurled it at the wall.
Uh, oh. I could not believe I did that. I was horrified. My mother stopped what she was doing and stared at me. I was in big trouble, and I knew it. My heart started to pound. I might never get to bake again in the kitchen. I might go to bed without dessert. Maybe stand in the corner. But instead, my mother started to laugh. “That’s exactly where my first pie crust ended up,” she said.
Today, I make a perfect pie crust. And I’m a pretty darn good Sacramento short sale agent, too. Just don’t call and tell me you’re a cash investor, because I don’t care.
How to Submit a Back Up Offer
The real estate market in Sacramento is so crazy that a really smart move for any aspiring buyer might be to try a back up offer. The problem is no inventory. Now, you would think that little inventory would have solved the problem of flakey and indecisive buyers, especially for those buying Sacramento short sales, but it hasn’t. Buyers still abruptly cancel transactions even though their chances of being able to buy another home are dwindling as surely as the minute hand on that clock continues to move.
An agent called me several days ago to explain why his buyer was canceling. Like I give a crap. Canceling is canceling. He said the buyer’s lender did not explain Mello Roos to the buyer and therefore had incorrectly quoted the buyer’s pending mortgage payment. The buyer had not counted on having to pay an additional $100 a month or so. Except when I looked at the original offer tracking sheet, I discovered the buyer’s first offer had been $10,000 over market value. I was the person who had explained to the buyer’s agent that the home had to appraise. The buyer had originally agreed to pay a higher mortgage payment, but now that the price was less, that same payment was freaky. Wha?
Logical or not, buyers do suddenly cancel purchase contracts. That part hasn’t changed. I don’t think they understand the market, and why should they? Home buyers are bit players. One person buying one house. Investors and real estate agents who are active in the Sacramento market realize how difficult it is to buy a home right now. The median sales price has gone up from $155,000 a year ago in October to $180,000 last month. Yet, another reason why it’s smart to lock down a potential purchase through a back-up offer. Lock in that lower price.
When a seller signs a back-up offer, it means if the existing buyer cancels, the new buyer moves into first position and becomes the buyer. There is no going back on the market as an active short sale or active listing. The home is never exposed to the market a second time.
But you can’t just send the listing agent an offer and say:“Keep this in backup.” Well, you can, but it won’t be in backup. You need to submit a formal Purchase Agreement Addendum (PAA) with your purchase contract. Moreover, you can’t just sign a PAA and send it. It must be completed. Don’t cry Ma. If an agent doesn’t fill in the two spots in Section 1, the PAA is incomplete. One spot signifies the position for the buyer. Does the buyer want to be in #1, #2 or #3 position? The second spot indicates how long the buyer is willing to wait for the existing buyer to cancel. Is it 10 days? 120 days? A year?
You can also use a much simpler form, the C.A.R. Backup Offer Addendum.
Of course, if a buyer offers less than list price or something else is incompatible in the offer for the seller, the seller is not obligated to accept a back-up offer. Sellers are never forced to accept a back-up offer — even if the home is offered for sale as an Active Short Contingent. But most sellers are happy to receive a back-up offer and will accept. Like with anything in real estate, your offer needs to be signed, dated and in writing.
A Cooperative Short Sale is a Privilege; It’s Not a Right
If you ask a lawyer if you should file a lawsuit, that answer will probably be yes. Just like if you ask a Sacramento real estate agent if this is a good time to buy, you’re gonna hear YES, this is a good time to buy. Because that is asking a person in business for himself or herself if you should do business with that person. It is rare for a person in business to turn away that business. If a person routinely turned down a source of potential cash flow, sooner or later that person would go out of business. But many people do not understand that concept.
Another concept people do not understand is if you are trying to buy a short sale, that short sale might not be approved. No bank is required to do a short sale. A short sale is a privilege; it’s not a right. Even if the bank agreed to do a short sale, a bank can say no later on. For example, if I were an investor who needed to do a 1031 exchange, I would not be trying to buy a short sale. Because when you do a 1031 exchange, you have a certain period of time in which to identify a property and a certain period of time in which to close. Once those time frames have come and gone and you haven’t closed, you’re hosed. Your preferential tax treatment goes bye-bye.
I have closed short sales in which an investor was doing a 1031 exchange. But it was risky for that investor. Because there’s no guarantee. It’s risky for any short sale buyer. It says so right in the documents a buyer signs.
Just like there is never a guarantee with a Bank of America preapproved Cooperative Short Sale. Just because the bank approved a Cooperative Short Sale does not mean the bank will approve an offer from a buyer. And just because the bank might approve an offer from a buyer is no guarantee that Bank of America will close escrow. Bank of America reserves the right to pull the plug at anytime, and there’s not a darn thing a buyer can do about it. There is even less recourse when the investor along the way fires Bank of America, like Fannie Mae seems to be doing lately.
Oh, Bank of America has a fancy name for getting fired. It’s called a Release of Servicing. But it’s being fired all the same. Fannie Mae recently fired Bank of America right before final approval of a short sale. Instead, Fannie Mae hired Seterus to handle the servicing of that loan. Bank of America was about to approve the Cooperative Short Sale for a 1031 exchange buyer. It had issued a counter offer in Equator and was getting ready to draw the final approval letter. But when Seterus took over the servicing of that loan, Seterus said nope. No can do. Seterus does not do Cooperative Short Sales like Bank of America.
You know who got the short end of that stick? Welcome to the world of short sales. If it were me, I would not give my money to a lawyer to pursue a case without merit against Fannie Mae (aka our government), but some people have little respect for money, much less common sense.
Sacramento Real Estate is a Service Business
A Sacramento real estate agent often multitasks.
I had a terrible experience buying my home in Land Park. I didn’t realize how horrible it was at the time because I had been juggling too many balls in the air, moving clear across the country from Minnesota, and it’s only in retrospect all these years later that I realize it was too awful to wish on even my worst nemesis. Without going into gory details, I can say the thing I hated the most was the non-existant communication. My agent rarely called me back. She did not respond to emails. This was way before the age of text messages, but I imagine she would not have responded to text messages, either. It was like a vast empty pit into which I dumped questions and never got anything back in return.
Because my husband was already living in Sacramento, my real estate agent might have thought her duty was to him. She might not have realized there were two of us she needed to address. But the fact remains, she ignored me. Let’s just say it cost her. And I vowed from that experience that no client would ever utter those words about me.
I try not to assume anything. I know that my clients do not buy nor sell real estate for a living. They can’t possibly know what I know — I’ve pretty much run out of fingers and toes to count my years of experience in real estate. I try to be very sensitive to the needs of my clients. If they ask me a question, I respond. In fact, I try to answer their questions before they have a question. No question is too simple to ask. For example, when people call to say it is time to do a short sale, I make sure they understand that to do a short sale means they are selling their home. Not everybody understands this premise.
Last week I listed a home and had to point out the commission to the sellers so they understood how much they were paying me. They didn’t ask about it. But they did ask who was paying the buyer’s agent. I explain agency relationships, and not just because the California Civil Code requires it but because it’s important to know.
When clients send me a thank you after an escrow closes, they say how happy they were that I kept them informed throughout the transaction. That I responded immediately to their needs. They are thrilled. It’s the WOW factor. Others read those thank-you letters and my reviews and ask how can I be so responsive to my clients when I am so busy with work? I am a very busy Sacramento real estate agent. I sell from Lincoln to Galt. It’s because my clients are my work. When I am working, they come first. What’s so difficult about that?
