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The Joe Cocker Short Sale in Rancho Cordova
Sometimes, I get a short sale to sell that throws me a curve ball. Especially when it’s a tenant-occupied short sale and the tenant won’t cooperate. Oh, they will promise to cooperate, and they’ll even give this Sacramento short sale agent a key for the lockbox and let me publish in MLS a cell phone number, but they have no intention of cooperating with showings. What is it? My smiling face? They can’t say “no” to my face? But behind my back they are thinking forget her and the horse she road in on?
I put this Rancho Cordova short sale on the market more than a year ago, and for the first 3 or 4 months, I couldn’t show it because the tenant refused to let agents inside. He stuck a big sign on the door: PITBULLS INSIDE, and refused to answer the door. I was very relieved when the seller finally booted the guy to the curb. Unfortunately, my lockbox vanished with the tenant.
The seller is in the military. Stationed overseas. He had been fighting his investor Freddie Mac for several years, trying to deal with his underwater home. There are several bright spots in this, actually. First, the military gets special treatment in a short sale. Foreclosure is generally not gonna happen. Not to mention, if one hasn’t made a mortgage payment in several years, one’s odds of getting a short sale granted by the bank are very high.
While I waited for the seller’s family member to mail me a key, I began receiving phone calls from eager buyer’s agents who were very anxious to show the home. Their options were a) crawl in through the bathroom window or b) wait for me to put a lockbox on it. The lock was broken on the bathroom window. One agent crawled through the bathroom window and called back to report that squatters were living in the house. Nope, that’s just the way it looks. Another agent yelled at me that she was most certainly NOT crawling in through the bathroom window and hung up on me.
Well, I guess she’s not selling that home then. Short sales present different levels of difficulty and challenges. Ordinarily, I would never ask an agent to crawl through a bathroom window, but this was the least of the problems inherent with this particular home. An agent who would not or could not navigate a small obstacle such as an access barrier probably would not survive dealing with the upfront repairs a lender would require just to get the loan funded, nor be willing to deal with a 203K for the roof and other repair issues. This was a fixer short sale in Rancho Cordova, which are not the easiest short sales to sell.
Finally received a key, I gained access, attached a lockbox and secured the back window. But by then we were in escrow. We were in escrow with the agent and the buyer who were willing to crawl in through the bathroom window. Obtaining short sale approval from IndyMac, now One West, and Freddie Mac was relatively fast, given that particular combination of servicer and investor. We received approval in fewer than 30 days! But that was at the end of April. We didn’t close escrow until the end of August. It took that buyer 4 months to fund and record a 203K.
Unfreakin’ believable. If this had been any other bank and any other situation, this short sale would have started over. Our negotiator at One West was such a nice guy. I don’t ordinarily use the words “nice guy” and “bank negotiator” in the same sentence. But this fellow was accommodating. Which was a good thing because the guy at the Franchise Tax Board was a far cry from a nice guy or even a guy whom I’d call a public servant, although our taxes pay his salary. He was more the male version of Lily Tomlin’s phone operator, one ringy dingy. He made us send him HUD after HUD after HUD and came up with a bunch of idiotic reasons why he would not issue the partial tax release.
But in the end, patience and teamwork won. Just like always. Just like every short sale I close in Sacramento. I think I had 6 days before my listing expired. Many happy parties. In this particular Rancho Cordova short sale, it took an army to close it. And some of us, still can’t get that Joe Cocker tune out of our heads this morning.
CITI Almost Thwarts Short Sale of East Sacramento Home
Do you know how hard it is to keep up a seller’s spirits in an East Sacramento short sale? I try very hard to make sure the first buyer we go into escrow with is the buyer we will close escrow with the first time around. I never want to say to a seller: “Look, we’ve got approval twice already, I am confident that buyer #3 will close this time.” Because sellers get exhausted when short sales drag on and on due to buyer cancellations. Not every seller has the wherewithal to hang in there. Some just give up. Throw in the towel. Walk away.
That’s why it’s important to close escrow with the first and only home buyer. It’s how we closed escrow yesterday on another East Sacramento home. This was a buyer who really fell in love with the home. Almost every agent says her buyer loves the home when the offer is presented, but buyers and agents tend to change their tune as the short sale progresses. The engagement process is often all fun and sparkly but some lose enthusiasm along the way. Not this buyer. She was a real trooper. She waited 6 months for this short sale to close. Homes in East Sacramento are worth the wait.
First, the bank decided it wanted a higher sales price. It’s the bank’s prerogative. Often when a home doesn’t move for whatever reason and we end up reducing the price, the banks put the price back where it was in the first place or close enough to it. That’s why it’s extremely important not to price an East Sacramento home too high when you’re deciding on a short sale price. But you don’t want to be too low because you might attract a buyer who can’t afford to increase her price if the bank demands it. It’s like Goldilocks: for homes in East Sacramento you want to be priced just right.
Then, when the buyer’s appraiser did her appraisal, she did not read the purchase contract. The buyer’s agent gave her a copy of the purchase contract and the price increase, but the appraiser was either too busy or she simply ignored the information. Pricing homes in East Sacramento is an art. Not every appraiser is up to snuff. Her appraisal came in at the list price and not the appraised price. It was $15,000 too low. This held up the closing while we scrambled to assemble comparable sales and push the buyer’s lender to reassess.
The second lender, Citimortgage, now One Main Financial, demanded an excessive amount to settle. Wells Fargo met most of the demand except for the last $1,200. It always seems to come down to $500 or $1,000 when we come to a standstill at the OK Corral. You gotta wonder what is wrong with these corporations that they would let a deal blow up over a few dollars, but they do and they will. I guess if you looked at $1,000 x 10,000 deals, that’s $10 million. But the buyer agreed to pay it out-of-pocket. Bless her sweet little heart.
Citimortgage had refused to extend this escrow. Because the appraisal review delayed the closing, we were past our approval letter date. By all accounts, the short sale had expired. We begged and pleaded but CITI denied our requests. They’d only given us 2 weeks in the first place, which is virtually impossible unless the buyer had moved forward on the loan as I had suggested and she, thank goodness, had complied. In the end CITI relented and gave us an extra 24 hours, which we managed to meet.
I like to examine my closings afterward to figure out what this Sacramento short sale agent can do to improve future closings. After 35-some years in the business, I still try to learn. Nothing is ever perfect. In this East Sacramento short sale, if I had changed the listed price in MLS, I could have prevented a clueless appraiser from making a mistake. I am reluctant to change a list price in the middle of an escrow just in case it falls out, but now that we have a seller’s market in Sacramento, there is really very little risk to increasing the sales price during escrow. And it just might avoid a future problem when the next appraiser screws up. It’s smart to be one step ahead at all times. That’s what I strive for.
Did Karma Close This Bank of America Cooperative Short Sale?
Do you believe in karma? You might be surprised. My husband and I had dinner last night at one of our favorite restaurants in Midtown Sacramento: The Waterboy. When the bill arrived, my husband whipped out a gift certificate. Who sent us that? Turns out it was a gift from a client. A husband and wife for whom I had done a Bank of America Cooperative Short Sale. They were a couple another Sacramento real estate agent might refer to as high maintenance. Agents call clients “high maintenance” if clients behave outside the norm or require more work, reassurance, or explanations than other clients.
I call it business. I’ve been around the block.
This couple had asked me to come into the office on a Saturday to talk with them. I ordinarily do not consult with clients about a short sale because I am not a lawyer. I don’t really give in-office consultations nor do I charge an hourly fee. I get paid on commission. Believe it or not, I do most of my real estate business via phone and email. Very little of it is in person. I am not high pressure nor would I ever try to force a seller into doing a short sale. Sellers typically need to come to that decision on their own, but I’m happy to help walk them through the pros and cons of their particular situation on the phone.
Although I do sell real estate on the weekends, I don’t do it in person. I don’t get dressed up, put on makeup and drive down to the office. I paid that price years ago, and I don’t do it today. If a client wants to meet with me in person, we meet during the week in daylight hours, like any other business person. It’s a misnomer that an agent must be on call 24 / 7. I am not ashamed to say that I have over $20 million in closed and pending sales so far this year, so if I’m telling you that I don’t have to go into the office on the weekends to be successful, it’s the truth.
Yet, this client desperately needed to meet on a Saturday. She and her husband lived out of the area and they could not meet any other day in Sacramento. So, I made an exception for them. It wasn’t a big transaction, either. It was a small short sale in Antelope. Around $125,000. I might have grumbled a little to my husband, but I went. You know why? Because these people needed my expertise. Who else would do a Bank of America Cooperative short sale for them? There aren’t very many short sale agents in Sacramento who know how to do this kind of transaction; in fact, I don’t know of any. I specialize in Cooperative short sales. They needed help. They were also really nice people. I like working with nice people.
Every client is different. They don’t always fit the mold we agents set. Some need a little bit more help and explanations than other clients. I certainly wasn’t expecting a gift certificate from them to The Waterboy, though. That was a surprise. See, karma has a way of coming around.
Can This Carmichael Short Sale Be Saved?
A short sale home in Carmichael closed escrow this week that might not have closed at all if it had fallen into the paws of some other Sacramento short sale agent. But fortunately, the seller called me. It was kind of like a story that could be printed in a national magazine. Remember those magazine articles from Ladies Home Journal: Can this marriage be saved?To be honest, I wouldn’t read the story, you know, I’d just say NO and throw the magazine back on the table in the doctor’s waiting room. Well, this is a version of what I call: Can this short sale be saved?
It had everything set against it except willing participants. There were a lot of drawbacks. See, as a Sacramento short sale agent, I know that the secret to closing a short sale is to correctly assess the situation upfront and address potential issues. Here were some of the issues with this particular Carmichael short sale:
- Green pool
- No water service
- Charged-off first mortgage
- Second Bank of America mortgage
- Seller had no additional funds
Not to mention, the comparable sales could go either way. Up or down. It was a non-conforming Carmichael neighborhood with a mix of expensive and entry-level homes. That meant we could have difficulties with a BPO. There was also a slight odor from a cat. All the ingredients for a challenging short sale.
My first and foremost duty is always to the seller. We had to figure out a way to close this short sale with the least amount of problems and try to put some cash into the seller’s hands. We had to make sure the delinquent water bill did not become a lien, because in a HAFA short sale the seller cannot pay a recorded lien from the relocation incentive, but a seller can pay a utility bill. An agent who doesn’t do a lot of HAFA short sales would not know this fact.
We also needed to clean up the pool because the buyer for this house would most likely be an FHA buyer. You can’t get an FHA loan with a green, slimy pool. To clean up the pool, we had to turn on the water. The water had been shut off because nobody lived there anymore and the bill was a few months overdue. Another requirement for a HAFA relocation incentive is the seller has to occupy the property. The seller can do a HAFA without living in the home but she won’t qualify for the incentive if she’s not physically living in the house.
However, the icing on the cake with this short sale was the fact the loan had been sent to charge-off. The new lender was not a participant in HAFA. That meant the seller could not do a HAFA short sale. So, that idea was a moot point. On top of all of this, the short sale would be delayed because the second was held by Bank of America. This meant dealing with Equator for the second just like it was a first, except it wasn’t. Archaic procedure for a second mortgage. 90-day escrow period minimum. Every time I turned around, an obstacle presented itself.
Another Sacramento short sale agent might not have listed this short sale. I couldn’t do that to the sellers. The sellers were some of the nicest people you’d ever want to meet. Sweet, kind, caring. They had a strong attachment to the home. There was an emotional bond. It was not easy for them to sell this house. But I knew we just had to find the right buyer. There is always the right buyer for a home, even a home scented by a cat with kidney disease.
It took a while but we found a buyer. The sellers borrowed money from relatives, worked out a deal with the water company and shocked the pool. It was a struggle to keep the utilities on. People don’t think about what sellers have to go through to sell a short sale when they no longer live in the home. They have to pay for utilities in 2 homes. Many people can’t afford the utility bills for one home much less 2 homes. They have to protect the home and check it after showings because careless agents can leave doors unlocked, which is a disgrace in itself.
I was able to work out a compromise with the new first lender to pay an incentive to the seller even though she did not qualify for a HAFA short sale. It was enough to repay her relatives, pay the remaining balance of her water bill and ease other expenses. The lender gave us a break on the BPO due to the cat odor. We got approval from both lenders. And perhaps the nicest ending was the seller met the buyers the day it closed and was able to talk with them, show them how to operate the pool, listen to their ideas for home improvement projects and gracefully exit. That’s the ideal ending for every short sale: a graceful exit.
A Chase Bank Short Sale Loves Me, Chase Bank Loves Me Not
Usually I do not talk about Sacramento short sales until they close, just as a matter of policy. But this particular Chase short sale is so bizarre; whatever happens the seller is beyond giving much of a hoot, even though the bank is offering, let’s say $50,000 in cash for a home worth, let’s say $200,000.
The problem is there is a second loan held by a collection agency. The second has been sold over and over. It’s amazing that there is a market, a physical financial market for a second loan without any equity. There is a way that collection agencies can make big bucks buying up worthless instruments. You would think there is something illegal or against the law with this kind of practice, but everybody just looks the other way and shrugs their shoulders when I ask about it. It’s not a small financial practice, it’s a huge money-making venture. Hand-over-fist piles and piles of money is manufactured out of thin air! Nobody is talking about it.
The second problem is Chase has flagged this short sale as a file that needs a huge cash payment by Chase to the seller. To a person with an underwater home. Why does Chase need to give the seller $50,000? Nobody is saying. It’s unrelated to the National Mortgage Settlement because it’s been going on for more than a year. See, the thing with a Chase short sale is these short sales are not in Equator like almost every other short sale. These short sales are negotiated directly with Chase so they take forever to get approval. On average, my Chase short sales get approved in 3 to 4 months.
Because of California Civil Code 580e, the seller cannot make any contribution in a short sale. The second lender says if the seller is receiving a huge wad of cash from Chase, they want more of it. But the seller can’t give it to them. So, the answer is the seller gets nothing. We received short sale approval on this with Chase giving the seller nothing, and then the buyer split. Sorta par for the course.
Now we are back with a new buyer trying to get a second approval from Chase. This time Chase says it can’t issue approval unless the seller takes the $50,000. What? It’s a Chase Bank short sale like this that can make a Sacramento short sale agent pull out her hair.
