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Can This Sacramento Seller Qualify for a Short Sale?
You may find this surprising to hear, but this Sacramento Realtor takes the time to analyze her sellers before listing a home for sale and she makes sure the sellers qualify for a short sale. I realize it looks like I never say no to anybody, but that’s just because I list and sell many, many homes in Sacramento, including some short sales. I will take just about any listing but I do subscribe to set criteria: I’ve got to believe the home will eventually a) sell, and b) the seller can’t be crazy nuts, like Dr. Jekyll and Hyde personalities.
The Sacramento short sales in particular require special attention because they require so MUCH extra work and time. You can bet I make sure my sellers can qualify for a short sale because that will ensure that my short sales will get approved. I’ve worked on short sales now for going on 10 years, and I’ve sold and negotiated more than any other short sale agent in a 7-county area. I stay abreast of new developments, laws and legislation, lender requirements and, quite frankly, there is not much I do not know about short sales. For a person who once said she didn’t have anything more to say about short sales, I’ve written 150+ articles, a book and goodness knows how many thousands of blogs and online tips.
Sometimes, I have to say no to a short sale. Not every seller will qualify for a short sale. Like yesterday, a nice fellow called to ask me about listing his home in Natomas. A quick search while he was on the phone with me revealed he travels the world, has built a home in the South Pacific and presently lives in a home he owns in Elk Grove, an Elk Grove home with lots of equity. Although he continued to insist that he lives in the home in Natomas and, when I mentioned the disparity, he claimed to live at both homes. Which I suppose he could, maybe he has more than one family, I dunno, but I don’t believe a short sale bank will buy it.
The best chance to qualify for a short sale is to have a financial hardship. The worst thing is to have excellent credit, lots of disposable income, and the ability to pay on the mortgage. Upon closer examination of this guy’s situation, it was apparent to me that we could sell his home in Natomas and he’d be short about $10,000, after all the costs of sale and existing loans were paid. For THAT he wants to short sale? It’s not worth it. He’s got the ten grand, and, upon review and confirmation, it would not be a huge sacrifice or stretch to just pay the difference.
But people have to make up their own minds what to do. I should charge for my advice but the BRE seems to frown on agents charging for advice when it’s not part of a sale. The financials the bank will pick apart should negate any chances of short sale for this guy. I work with more sellers lately who pay the difference and don’t short sale because the gap is becoming increasingly smaller, thanks to our recovering market.
My reputation is also at stake. I don’t want to put a buyer and her agent through waiting 90 days for approval and not perform. My short sales close. Because I qualify the seller. And I give straight-up advice. If it’s unlikely to work, I’ll tell you. My advice to other agents is to think through the short sale and seek out a short sale expert if need be, and don’t just throw every seller into MLS because they ask. Buyers, look at the track record of the Sacramento short sale agent before committing to buy a short sale.
When a Short Sale Buyer Blows Off a Nationstar Auction . . .
There are benefits to registering for a Nationstar short sale auction.
This is a story of a Nationstar short sale for which the buyer did not register during the online auction and, as a result, did not participate in the online Nationstar auction. I always advise in-contract buyers to register for the online auction and to place a bid, even if it’s the identical amount that they’ve already offered, during the last few minutes of the auction. There are advantages. First, no 5% premium applies to a buyer who is in contract with a seller to buy a short sale. Second, upon winning the bid process, Nationstar promptly issues an approval letter within the week — OK, maybe another week or so when the investor is Fannie Mae, but still.
These particular buyers did not want to participate in the online auction. OK, they don’t have to. Nationstar doesn’t force them to register nor to bid. But the consequences that happen when they don’t is the approval process starts over and can take another 3 months to obtain the approval letter.
My experience has shown that a Nationstar auction typically doesn’t get a lot of action, especially when the reserve price is set so much higher than the initial starting point. I heard that N.A.R. has stopped shill bids from Nationstar now, so that helps as well. Plus, when you have Fannie Mae as the investor, you can be fairly well assured that Fannie Mae will set a reserve price on the high side of market. But buyers don’t always listen to the listing agent’s advice.
We had already lost one buyer in September who had made an offer and then immediately reneged. Some lame excuse about his parents not wanting him to buy a home. When my seller finally entered into a purchase contract with our new buyers, it was October of last year, a few weeks before Halloween. The Nationstar auction process did not take place until the last few days of December, that quiet time between Christmas and New Years when I flew off to Vanuatu, probably the very worst time of the year for an auction. But like I mentioned, the buyer did not register for the auction.
Green Tree was the second lender, the collection agency that has made enormous profits buying bad paper. Green Tree had previously issued approval, but since Nationstar had dragged its feet on the process, that loan went to charge-off status. Now, Green Tree wanted more money. On top of this, Nationstar came back to say Fannie Mae would not approve the buyer’s closing cost credit, and raised the sales price.
All of this happened because the buyer did not bid at the auction. Good thing the buyer still wanted the property from my seller. Six months from the date of the purchase contract we closed, and the buyer had to pay a higher price, plus wrap the closing costs into the loan. The moral of this story is if you’re trying to buy a short sale and are faced with an online auction from Nationstar, you may want to register and participate. You have nothing to lose but time. And quite possibly, money.
Crazy Escrows in Sacramento Mean We Stay to the End
Crazy escrows are not uncommon in Sacramento short sales.
Of all the crazy things that could fan the flames in an escrow, this particular case I’m about to discuss was exceptional, but then many Sacramento short sales are unique. This was also a small transaction as compared to selling luxury homes in Sacramento or in Davis — but as a Sacramento Realtor, I really don’t look at the sales price and tally my potential commission or I’d never list and sell half of the properties that I do. Or, as my husband likes to point out, still much more than his paycheck.
The property itself was somewhat unusual in that deferred maintenance and dry rot was evident, among some nice upgrades. That makes it hard to appraise because some BPO agents struggle with repair issues. It’s easy when all the homes within a half mile are similar to each other like those homes in Elk Grove or Natomas, it’s quite another thing when the neighborhood is distressed and the homes are not so new.
We received a few offers during the first 2 1/2 months this home was for sale, but none at the price we needed to gain an approval from the bank. Agents seem to think we should be grateful for their buyer’s lowball offers and send them to the bank on the off chance they might get accepted, and I guess they seem to forget that we don’t work for their buyers. We work for the seller, and if we’re gonna work, by golly, we’d also like to get paid for it, however small that paycheck might be. We’re not interested in hearing why the buyers feel the home is worth less, in many cases we know what the bank expects. Meet it or you don’t go into escrow. Finally, a buyer who would occupy the home wrote an acceptable offer.
Wells Fargo sent us an approval within 8 weeks, which is a little bit longer for Wells Fargo than normal, but it was also a HAFA short sale. We still had the second lender to contend with, which wasn’t budging from its high demand and, on top of everything else and typically par for the course, vandals broke in to steal appliances and wreak havoc. The sellers handled much of the repair though their insurance company, thank goodness. Then we went through 4 or 5 rounds of proposed approvals from USAA until we were down to the last 400 bucks.
I pleaded, cried and practically wept out loud to the negotiator about the sellers’ particular medical condition. Think about the worst health thing that could possibly happen to a human being, apart from maybe cancer, and that’s what the seller was going through. Then February 1st rolled around and the 2015 HAFA short sale guidelines changed, so I resubmitted the package to Wells Fargo and requested a revised approval letter to include the $10,000 relocation incentive to the seller and to pay the second $12,000. It took Wells Fargo another month to release the revised approval letter, which was finally, finally followed by the approval from USAA.
The appraiser then requested a pest report and a pest completion. Fortunately, the buyers agents, super team that they were, stepped in to help the buyer handle it. We were all ready to fund and close when the appraiser went back to confirm the pest work was completed, and she decided, on a whim, to make the crazy escrow even crazier. She noted that the floors were buckling and presented a trip hazard. Bam, the buyer’s agent was over at the home on his knees with a belt sander, fuming and mentally cursing that appraiser, I’m sure. Who knew an appraiser was also a home inspector? There’s a special place in hell for those kinds of people. If the appraiser had a problem with the floors, why didn’t she note it in the first place instead of waiting for the funding and preventing a timely closing?
Yet, close we did. From start to finish on this short sale, over 8 long months, we dealt with hostility from other agents, rejections from the lender, vandalism, inept appraisers, repair requests for the buyer, and yet in the end we prevailed. I don’t give up. As the seller mentioned yesterday when I called to congratulate, that couple would hate to think what could have happened in some other agents’ hands.
The thing is this crazy escrow was gratifying in many ways to me. A first-time homebuyer got a great deal on her first home, and the sellers received their release of liability, plus $10,000 to help ease the transition into a new life elsewhere.
Losing the Attitude Helps to Keep it Real in Sacramento Real Estate
Ya gotta lose the attitude to keep it real in Sacramento real estate.
A home seller from Lincoln mentioned yesterday that he has sold a handful of homes over the past couple of years and bought a home about a year ago, and he has never had such a smooth and easy transaction as he did selling a short sale through me. I called to congratulate him on closing his short sale. I sold the home almost immediately, it comped by the bank at the sales price, and we received a very fast approval, within about 10 days. He sounded almost astonished that he could say that his short sale was so much smoother than compared to a regular transaction. I guess you could say he was very pleased with my performance as his short sale agent.
I try to let buyer’s agents know when they call me that I am very experienced with Sacramento short sales, because that fact will tend to put their minds at ease and calm any fears their buyers might have about buying a short sale. Because after all, why would you buy a short sale if you could buy a home that was NOT a short sale — as a regular home would close much sooner. And there aren’t as many short sales nowadays as there were a few years ago. People need reassurance, and I get that.
The words I never utter, under any circumstances, are: don’t you know who I am? Because that sounds so pretentious, self-absorbed and sorta cocky. That’s something that Reese Witherspoon would say and did, evidently, when pulled over by the cops for speeding. That’s something a mortgage lender asked the other day when he whipped off an email: Do you know who the clients are? Doesn’t he? I guess it’s not Reese Witherspoon. I offered to let my transaction coordinator look it up for him. Even though his boss earlier that day had admitted they were no longer the mortgage brokers on that particular transaction. Criminy, guys, let it go. Try losing the attitude.
I say to people I have a dubious honor — because I don’t really know if it’s an honor, it wasn’t something I set out to achieve — but when I looked at the numbers, they were staring me in the face. The numbers from Trendgraphics reflect that I have sold more total short sales in a 7-county area than any other Realtor in Sacramento, a record that has continued to grow since 2006. That’s in addition to my regular real estate business in Sacramento.
Still, it was nice to hear from my home seller in Lincoln that I had exceeded his expectations. It doesn’t matter to me who my clients are — short sales or million-dollar owners — I treat each and every one of their files as though it is the one project I’m working on. It’s just the way I’m wired.
Citi Bank Cannot Fax or Email Outside of Citi Bank
As a dedicated Sacramento Realtor who gets things done, it is not beyond the scope of my ability to take matters into my two hands, if I have to do it, to close a sale. I am a problem solver. In fact, sometimes other agents call me, agents I don’t even know, and ask me to solve problems for them. If it’s interesting enough, I might help them out, but I don’t get paid for that. So don’t read this and think it’s OK to call Elizabeth Weintraub and ask for help because it’s really not. If I’m not your agent or about to become your agent, don’t call me.
Back in the old days, in the 1970s, I could bill an hourly rate for real estate services like that. Especially if I didn’t particularly feel like talking to somebody, I could name some outrageous fee like $1,000, and they would still pay it, so I stopped that practice. Today, I charge my normal commission and that’s all I get. I work harder on some transactions than others, so it all evens out in the end.
Often, though, it’s the smaller transactions that require a lot more work, the ones that I barely make enough to cover my piddly mortgage payment, which has another 5 years or so to go and will be paid off under a 15-year mortgage. I know this only because I went to Citi Bank yesterday to pick up a short sale approval letter for a client from Roseville. You would think nobody would have to do this, especially not a Sacramento Realtor, and that Citi Bank could email the approval letter for a short sale but no, they can’t even manage to do that.
First, they said they mailed the letter to the property address, where nobody lives. That’s brilliant. Second, they said they mailed the approval letter to my office more than a week ago, and when they offered to mail the letter again, that’s where I stepped in to stop this nonsense. It was ridiculous, for starters. This was approved in mid March according to the negotiator and here it was April 9th, and we don’t have the letter, and they can’t fax or email it?
I threw myself on the mercy of a bank teller at Citi Bank and obtained an email address and phone number. However, the negotiator still refused to send the approval letter unless I was standing there in the bank in front of the bank teller. Where is a hologram when you need it? Well, as long as I was there, may as well see what services Citi Bank has to offer. They offer a credit card that pays you 2% in cash back and no annual fee, providing you pay your account in full. That beats the Chase Sapphire. So I had them sign me up for it while I was there, although I wonder how long that will last, and also got my hot little hands on that darned approval letter. Two birds with one stone. But I would have gone there anyway just for the stinkin’ letter. You do what ya gotta do.
