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Sacramento Short Sale Approval Delays Can Raise the Sales Price
I wrote on Sunday about how I listed this Sacramento short sale from a remote corner in the world, using a spotty internet connection at Rangiroa Atoll during Christmas vacation. I also mentioned the fact that if a short sale takes too long to negotiate or a Sacramento short sale agent has to start over because a buyer walked, the price of that short sale can go up. In this particular short sale, the seller had received a short sale approval but some mismanagement or confusion caused, he said, by his previous agent, resulted in a cancellation. Hence, he hired me.
Of course, I could daydream that all sellers should just list with me in the first place and avoid those types of hassles, but the truth is I could not handle the volume of every single short sale in Sacramento, nor would I want to. And there are other good short sale agents in Sacramento, some of which work at my company and to whom I occasionally refer business.
We went on the market at the price the banks had previously approved for the seller. Part of the problem was one of the banks sold the servicing of the loan since then. This is a phenomena I am seeing more of — banks dumping underwater loans and / or servicing to the market that was created to purchase worthless debt, some of which the banks own. The bank ordered a new BPO, even though the previous BPO had not expired.
Whoa. Prices were bouncing upwards. Now the bank wanted 20% more than it wanted a month ago. It’s a seller’s market in Sacramento. I presented that counter offer to the buyer, and the buyer immediately canceled. I don’t know what that buyer thought he could buy now that he was no longer in contract. Not my problem, though.
Found a new buyer and put that buyer into contract at the higher sales price (which by now, I should point out, is much higher still but the buyer has the price locked). We thought everything was going smoothly until the new second lender decided it wanted a lot more money than what the first lender was willing to allocate. The investor was Fannie Mae, so unless that bank has never dealt with Fannie Mae before, the bank should know that Fannie Mae has its maximum, and that’s the maximum. Fannie Mae does not allow anybody else in a short sale to pay the second lender, either.
That was little battle with the second lender, to get the bank to understand a) the first loan was really owned by Fannie Mae and b) the max is the max per Fannie Mae. After what seems like another couple of months, the second finally agreed and issued its approval letter.
Right before the lender’s property preservation company called and was about to shut off the water and change out the locks. But fortunately, that did not happen, and we were able to move forward to close. If you’d like more information about a short sale in the Sacramento region, please call Elizabeth Weintraub at 916.233.6759.
Listing a Sacramento Short Sale From Anywhere in the World
The problem with some short sales today is if they take too long to negotiate, the value of that short sale could go up and the bank could want more money. This was not a problem with Sacramento short sales in 2012, but this year some banks are asking for updated BPOs before the 90-day mark. Not to mention, once a short sale is approved and falls apart, there is no guarantee the next go-around will mirror the first. A smart Sacramento short sale agent knows this and takes precautions.
We are closing a short sale next week that came into my sphere sometime around Thanksgiving of last year. The seller called to complain about his agent — for what, I don’t recall — and asked if I would agree to take his listing. He had approval from the bank, too, but at the last minute something went haywire. I agreed to take the listing once the seller and his listing agent terminated the existing listing and removed it from MLS.
I should point out that the reason a seller is unhappy with a real estate agent sometimes lies with the seller and not the agent. I am typically hesitant to pick up a listing from a disgruntled seller because that seller could be the problem. One thing being in real estate for so long teaches me is there are a lot of nut-jobs in the world and people who don’t take their medication. On the other hand, about 90% of all Sacramento agents sell fewer than one home every two or three months, so what does that tell you? But, in this particular instance, my gut instincts told me the seller was not at fault. I told him to let me know when he was ready to go on the market.
You know what day he was ready to go on the market? Christmas day. Yup, Dec. 25th. And there I was: lounging about in my gorgeous overwater bungalow, watching the waves gently lap the piers, gazing at brightly colored fish swimming about under my glass floor. I was on vacation at Rangiroa, the second largest Atoll in the world, located in a remote chain of archipelago islands called the Tuamotu in French Polynesia. This is a place where it’s a miracle we were able to connect to the internet through satellite. It was a slow connection, and proved too much to smoothly connect to CAR’s antiquated ZipForms.
Even though the internet was sporadic, I received the email from the seller asking to go on the market. I managed to whip up all of the required listing documents through a combination of working with my dedicated team members and emailing forms to prepare and forward. One of my team members volunteered to go over to the home on Christmas and shoot photos and send them to me. I then uploaded all of the documents to DocuSign, my seller signed, and we went on the market the day after Christmas.
You can count on Elizabeth Weintraub. I take care of my clients no matter where I am in the world.
. . . Part II of this Sacramento Short Sale to follow on Monday.
photo: Gauguin’s Pearl Farm on Rangiroa, by Elizabeth Weintraub
The Ease of a Sacramento Short Sale With Jennifer Kelly at Wells Fargo
A prospective seller called me yesterday to discuss a distressed property in Sacramento that she wishes to perhaps sell as a short sale. We didn’t have much time to talk before she had to leave for an appointment, so I will follow up with her today. I like to be prepared for my discussions with sellers, so I access all the information that I can find for our consultations. The more information that I can give to a seller, the better. Because an informed seller is a seller who makes the right decisions.
I know the answers to many problems that plague sellers. It’s my business as a Sacramento real estate agent to know the answers. I don’t have to go to somebody else for an opinion. Although, I would never give a client legal or tax advice because that is not my speciality, and I am not licensed to talk about such matters. But real estate advice or short sale advice, I’ll talk your ear off. And I’ll be right. You can trust the information I provide. That’s why sellers choose Elizabeth Weintraub as their real estate agent.
There is another person in the short sale business who is not in the limelight but is simply incredible. That person is Jennifer Kelly at Wells Fargo. She works in a certain department, and I don’t believe she handles all short sales, so please don’t call her for general advice or leave messages in her voice mail. No exceptions, people. I am mentioning her because she is superb and the standard to which all short sale service departments should strive to achieve.
I contacted Jennifer yesterday because the seller with the pending short sale situation fell into Jennifer’s department. I could tell by looking at the tax records that this was a short sale that Jennifer might be in charge of approving. I emailed her to verify that this short sale would fall within her jurisdiction.
Six minutes later, I kid you not, 6 minutes later, Jennifer sent me a complete package of documents that pertain to this seller’s particular situation, with specific instructions, on top of a preapproved sales price. In 6 minutes!
You can’t get somebody to answer the phone in 6 minutes at other short sale banks. You can’t get a short sale APPROVED at many banks in 6 months much less 6 minutes. Jennifer is a busy person. She’s always out talking to companies, managing those in her department, helping sellers understand what’s happening and making sure her short sales are processed correctly.
I don’t know anybody who measures up to the professionalism of Jennifer Kelly at Wells Fargo. She soars far above the crowd with superior customer service skills. Wells Fargo is lucky to have her and probably does not pay her enough. She makes me look even better to my sellers.
I cannot wait to tell this prospective seller today that I have every document she needs to complete and her short sale price is already preapproved, and I don’t even work for her yet.
Sacramento Sellers Hounded By So-Called Short Sale Agents
I don’t ordinarily like to expose or discuss the underbelly of the real estate business, but I will if I believe it has value to the consumer. There are some agents who talk trash about other real estate agents just to make themselves look better by comparison, which is kind of scummy and throws a person into the same camp. But there are good and bad professionals in any business, anywhere you look. Sometimes, it just might seem like there is more disparity in real estate. Perhaps because there are so many of us — something like one out of every 35 people in California holds a real estate license.
Take one of my new clients, for example. While talking to this seller last week — who is about to embark on a short sale — he told me something must have happened recently to trigger all the calls from short sale agents. He said his phone had been ringing off the hook with offers of “assistance.” He was very surprised at the nature and tone of some of those calls and wondered how they got his number. The sad thing is, nowadays, falling behind in your mortgage payments can trigger such a flood of harassing soliciting calls.
First, nobody should attempt to do a short sale by hiring some agent who calls out of the blue or shows up on their doorstep. You should get your short sale agent from word of mouth or through research. Ever since the booming end of the colossal short sale era in 2012, agents have been frantically trying to grab that elusive golden ring of short sales. Even if they have no idea what they are doing or they have attended a half-day class and are now calling themselves an “expert” in short sales — how is a seller supposed to know if they are fakes?
Second, a seller should not be forced to do a short sale, pushed into a short sale or talked into doing a short sale. If a seller doesn’t want to do a short sale, why should that seller be harassed called by other agents who are trying to get some business? Agents typically don’t go around calling complete strangers and pushing them to sell. But some agents will do it to a seller who has an underwater home.
The way they get the seller’s phone number is by subscribing to a service that provides it or by getting it directly from the bank. Some banks such as Wells Fargo and Chase Bank have been reaching out (ack, I hate that term and look, here I am using it) to real estate agents and promising them short sales in exchange for a little mortgage business. They give the agents a list of sellers who are in default (behind in their payments), and agents cold call this list and try to persuade a seller to list with them as a short sale. It wouldn’t be so bad it were only one agent doing this, but it’s dozens of them and. in many cases, these are first- or second-year agents without a lot of experience. Because veteran real estate agents typically do not cold call.
The other way they find out is by asking a title company to provide them with a list of homes in preforeclosure or by subscribing to a private service that provides them with this very public information, or going to the office of the county recorder to find the information in person. Some agents belong to a program called HR 3648, which I suggest you steer clear from. A nonprofit director called me the other day to say she received a letter from HR 3648 that made it look like it was part of Keep Your Home California.Org. I did a search on that website and could not find Program 3648. No surprise.
If you’re looking for an experienced Sacramento short sale agent, ask for a referral, and you might very well be referred to me. I have a lot of previous satisfied short sale clients, hundreds of them. You can research my professional stats, or you can just call Elizabeth Weintraub, at 916 233 6759, Lyon Real Estate.
What You Need to Know About The Short Sale Approval Letter
Bank of America broke out its Cooperative Short Sale program in California about 3 years ago. Since then, many short sale agents have taken advantage of the fact that they can get their sellers preapproved for the program prior to going on the market. Preapproved is probably not the right word, although, that’s pretty much what happens. Preapproved suggests that nothing can go wrong, and things can go wrong.
For example, a preapproved Cooperative Short Sale seller last year lost her chance to close on a short sale because Bank of America assigned the loan servicing in the middle of her short sale. The new lender did not participate in the cooperative short sale program, so she was denied. She was denied because under ordinary circumstances, this seller had too many assets and her disposable income was too high. There was no hardship.
Some sellers think that they when they receive the Buyer Acknowledgement of Interest that they will receive a short sale approval letter before submitting an offer, but that’s not how the program works. First a seller will receive the BAI, and then a valuation letter. The valuation letter assesses and predetermines the minimum approved listing price. If that price is reasonable, you’re in luck. If it’s not, you’re kinda hosed. Most of the time, though, unless the investor is Fannie Mae, that price is reasonable.
Then the home goes on the market at the preapproved sales price. Generally, the seller does not submit financials nor a hardship letter unless the investor specifically requests it after the offer has been submitted. The short sale approval letter arrives after Bank of America has approved the purchase offer and the buyer. The buyer is named in the short sale approval letter and generally another buyer cannot be substituted.
In California, a deficiency judgment is not permitted, and by agreeing to do the short sale, the bank waives any right to pursue a deficiency judgment. If the property is a personal residence, odds are the seller will qualify for relief from paying any taxes on the amount of the mortgage that was forgiven. Talk to your personal accountant and seek legal advice before starting a Cooperative Short Sale so you feel comfortable moving forward. Do not ask your Sacramento short sale agent for legal or tax advice.
The short sale approval letter will arrive somewhere between 10 days and 4 weeks after the offer is submitted to the bank. The letter will most likely give the seller 30 days to move, so a seller might want to start making plans to relocate when the home goes on the market, especially in our fast-moving Sacramento seller’s market. Sometimes extensions are granted but not always. Sometimes, instead of granting an extension, the bank makes the seller start over with the short sale and will order a new valuation, which could increase the value for the buyer, if the buyer elects to wait. It’s not a good idea to ask for an extension because it is risky.
Bank of America will also require that the seller have no preexisting relationship with the buyer. Can’t have done business with the buyer or know the buyer or be related to the buyer. Selling to a friend could be fraudulent if the bank doesn’t know about it. If the bank proves mortgage fraud, it could overturn the deficiency waiver, so it’s just not worth it to try to manipulate the stipulations. If you know a person whom you believe has committed mortgage fraud, you can notify the bank anonymously at 866.880.1232. There is no reason to gamble with your short sale.
If you’d like more information about a Cooperative Short Sale in the Sacramento metro area, call your Sacramento short sale agent, Elizabeth Weintraub, at 916.233.6759 for a confidential consultation by phone.
