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How to Time Your Sacramento Short Sale
Two things potential sellers tend to ask this Sacramento short sale agent. The first is whether the bank will do a short sale. The answer to that is generally yes, unless you just bought a new home in your name. If you’ve just bought a new home in your name, unfortunately, you’re pretty much hosed and you should probably talk to a lawyer about that bad advice. The second question is how long does it take to close a short sale? What a seller is really asking is not how long it takes to close but when the seller must move.
Closing hundreds of short sales give this Sacramento real estate agent a unique perspective. Based on a seller’s individual situation, I can pretty much predict when the seller will have to move out. In some short sales, a seller should not move out at all until closing. A little known and recent supplemental twist to the HAFA short sale, for example, withholds the $3,000 payment to the seller if the property is unoccupied.
I also ask sellers why are they in a rush to move out? If they are not making a mortgage payment, and most of them are not making a payment, it’s free rent to stay in the home. Why move elsewhere and pay two sets of utility bills? Plus, moving out leaves the home vulnerable to vandals. There are good reasons to stay put.
Timing the short sale is important. A seller’s convenience is the most important. A potential seller from Granite Bay called me last week. He wanted to know if he could rent back and close his short sale. I’m glad he called me and not somebody else because the answer to his situation is no. He needs to delay his short sale until he’s ready to move. His short sale will take 120 days and he needs 6 months. On top of this, few short sale banks will grant a short sale to a seller who intends to rent back. In fact, one of my team members brought a short listing in MLS to my attention last week. The listing agent had noted in the confidential remarks the seller would sell only to an investor who would let the seller rent back. The lender was Wells Fargo. Lottsa luck there, buddy.
In a Wells Fargo short sale, all parties sign an arm’s length. No exceptions. See, the thing is if a seller and listing agent commit mortgage fraud — and violating an arm’s length could be considered mortgage fraud — a seller has given the bank a potentially legal reason to set aside the deficiency waiver. That means the seller could end up owing the bank the difference between the sales price and the mortgage payoff after the short sale closed. Simply because the agent gave the seller bad advice. Legal advice, on top of it, which an agent is not allowed to do.
My time frame for closing a short sale is my seller’s time frame. I am in no rush. I won’t push a seller to put her home on the market. To do a short sale, a seller must be ready to move forward. I advise my sellers along the way and help them to adjust their moving plans depending on their particular short sale circumstances. Stuff happens. Are you ready to do a short sale? Timing that short sale is everything. Hiring the right Sacramento short sale agent is a close second. It’s OK to ask your agent if it’s time to put your home on the market based on your own personal situation. In fact, I insist.
Take Xanax for a Bank of America HAFA Short Sale
In some Sacramento short sales, I want to grab an ax and hack Bank of America into itsy bitsy pieces. Hey, don’t call the cops. In other short sales, I’m littering the doorway with rose petals. There is no one-size-fits-all explanation when it comes to a Bank of America short sale. But there is also no middle ground. No median. It reminds me of that nursery rhyme about the girl with the curl in the middle of her forehead. When a Bank of America short sale is good, it’s very very good. When the short sale is bad, it’s horrid.
I tell my short sale sellers in Sacramento that there are two kinds of customer service reps at Bank of America: the brilliant and the morons. Nobody in between. They always laugh, but they and I know it’s the truth. I am also at an advantage with that statement because I know by the time a seller gets to me, that seller is pretty much ticked off at Bank of America. That seller has probably tried to do a loan modification and failed, often miserably. I don’t have to do much to poke the hornet’s nest and find common ground.
By the time a seller calls this Sacramento short sale agent, the seller is often exhausted, tired and angry. Oh, they can try to disguise their anger, and most do try to be polite, but I hear it in the cracking sounds of their voice and I see it in the fire raging behind their eyes. Bank of America has pushed them over the edge. They’re not even sure if they want to do the short sale because they are worried it will favor Bank of America in some way. Or, that the bank will reject their short sale. There’s fear and loathing. Believe me, I understand and empathize.
Moving a Bank of America short sale forward has its roots in patience. In not expecting too much from bank employees. Lowered expectations is key. Especially for a Bank of America HAFA short sale. A HAFA can expire. You’ve got about 4 months to close a HAFA. When you have a Bank of America HAFA coupled with a Green Tree second mortgage, that’s a lovely treat. Because Bank of America will take so long to approve the short sale, the Green Tree file will close. Green Tree keeps its files open for 90 days, and then they close them.
Those pesky laws about time frames in a HAFA? Ha. Bank of America thumbs its nose at those laws and slaps your face twice with its glove.
By the time we received short sale approval from Bank of America for our last HAFA short sale, Green Tree was long gone. We reopened the file with Green Tree and pushed. More than 60 days later, Green Tree issued approval, but then the Bank of America HAFA had expired. Could the bank extend? Yes, but it refused. Instead, Bank of America closed the file and reopened it, started over from scratch. New RASS, new TOS, new BPO, new HUD, it’s a new day at Bank of America, and it’s welcome to more hell for these Sacramento short sale buyers and seller.
On Wednesday, I sent a Tweet to the Social Media team at Bank of America about this file. I’ve Tweeted them so many times over this that they ignored the Tweet. It’s very unusual not to get a call back from Bank of America. I think I wore out my Tweets. The negotiator noticed the ZIP code was wrong. She asked me to send her a change of address when it was Bank of America that entered the wrong ZIP code. Oh, please.
We have a buyer’s loan about to expire if we don’t close by the end of the month. We have the Green Tree second loan going to charge-off at the end of the month. And we have a Bank of America negotiator lamenting about a ZIP code on a file that had already been approved once. This was already an approved HAFA short sale at Bank of America! Slap the Xanax into my hand.
I hope that today is the day we receive the new approval for this Bank of America HAFA. That’s one thing you can count on from this Sacramento short sale agent, I never give up hope.
Bank of America Cooperative Short Sales vs HAFA Short Sale
Don’t ask a third-party vendor for Bank of America whether a Cooperative Short Sale is better than a HAFA short sale. Because I’ll bet you dollars to doughnuts the vendor will pick the HAFA. Doesn’t matter whether it’s DTS, REDC, AMS, and so forth, all the acronym companies, they’re all the same. Call me silly, but that’s what I see happening, even though the HAFA is not necessarily the better option. It’s possible that Bank of America would push / promote HAFAs as well because there might be more money to the bank through a HAFA.
When I open a Cooperative Short Sale in Equator, the first thing that happens is my requests for a Cooperative are ignored. The third-party vendors pursue the HAFA. I send emails that say do NOT review this for HAFA because the seller wants to pursue a Cooperative Short Sale. Then, I ask the seller to call the customer service number and repeat over and over Cooperative, like a mantra. If the customer service rep says HAFA, the seller is counseled to say “No, Cooperative.” Yet, the bank opens a HAFA anyway. You’ve gotta ask yourself, why is that? I’ll tell you why I think they’re doing it, and it’s not because they’re stupid, although you may disagree. It’s because there is probably more money in it for the bank.
Is the HAFA better for the seller? Speaking strictly for a California short sale seller the answer might be no. Let’s make it clear I am talking about a streamlined Cooperative, a short sale in which Bank of America has delegated authority to approve without financials. I have a certain Cooperative approved, and Bank of America is telling the seller that in order to do the Cooperative without financials, the seller must be 90 days delinquent to satisfy this particular investor. But in a regular Cooperative short sale, the seller is better off with the Cooperative over the HAFA.
Especially if the seller qualifies for the HIN Cooperative Short Sale, because that minimum payment starts at $5,000 and can go up to $30,000. A HAFA short sale maximum payment is $3,000. However, you can combine the two types of short sales, when you get right down to it, if you’re willing to submit financials and tax returns, and I’m getting approval on one of those in a few weeks.
But if you’re not willing to hand over your sensitive personal information and you just want to do the Cooperative Short Sale without financials, the Cooperative beats HAFA in the PITA classification every time. Some types of Cooperative short sales pay $2,500. Even when you take into consideration the $500 difference vs the PITA, let me tell you, a Cooperative short sale wins hands down. In fact, the only thing worse than a Bank of America HAFA short sale is a Bank of America HAFA Fannie Mae or Bank of America HAFA Freddie Mac short sale — with Freddie Mac HAFA having the slight edge for winning the crawling-through-broken-glass-naked award because it doesn’t use the ARASS.
If you’re got a choice, pick the Bank of America Cooperative short sale. Your Sacramento short sale agent will thank you. Your mother will thank you. Your doctor will thank you. And you’ll sleep better at night.
The Perfect Sacramento Short Sale Buyer
Is there such a thing as the perfect Sacramento short sale buyer? At the risk of sounding like I was raised where I was: you betcha! A seller asked yesterday — how do I know which offer to pick? She asked if she should read every offer she receives or if she should leave it up to me, her Sacramento short sale agent. First, let me say that decision always lies directly with the seller — never with the agent — but I do offer suggestions, and I do guide my sellers to help them to make the right decision. And yes, making the right decision involves reading every offer.
The right decision is choosing the buyer who will perform. What does it mean to perform? It means the buyer who will pay what the bank wants and will close escrow. That premise may sound on the surface overly simplified but those two things are the qualifications of the perfect Sacramento short sale buyer. Of course, there are other things that come into play but performance and adaptability are the most important.
I’ll tell you what you don’t do as a Sacramento short sale buyer. You don’t let your buyer’s agent become combative with the the seller. Because that kind of behavior is just stupid and it backfires. If your agent is ticked off about something, your agent should keep those feelings to himself. Nobody needs to hear it. Earth to buyer’s agent, hello . . . Sacramento is in the middle of a super hot seller’s market right now. You also don’t disclose to the seller that your buyers trespassed, walked around the property without permission and peeked in the windows of an owner-occupied property.
I just closed a short sale in a gated community in the Pocket. This home was situated on 2 parcels along the river. We had received several offers when it came on the market, but the offer the sellers selected was from the buyer who agreed in advance to step up to the plate, if it was required. This particular buyer was represented by an agent who had closed other short sales. Because of that experience, the agent prepared the buyer for the unexpected. Sure enough, the unexpected happened. As anticipated, the buyer performed.
A seller might think she is choosing the buyer who loves her home as much as she did when she first laid eyes on it, and that could very well be true. It’s nice if a seller likes the buyer and knows the buyer appreciates and values the same things in her home. But as her Sacramento short sale agent, who must put the seller’s interests first and foremost, I’m looking for the buyer who will close.
What’s Wrong With the California Homeowner Bill of Rights
How will the California Homeowner Bill of Rights affect short sale sellers in Sacramento? Despite all of the hoopla over it, not much. Probably the most important aspect of the Bill of Rights as it relates to short sales is the stopping of dual tracking — but that only goes into place after short sale approval, not prior to short sale approval, which is when a homeowner needs it.
Dual tracking happens when a foreclosure has been initiated. This means a Notice of Default has been filed in the public records despite a homeowner’s good faith effort to find a solution. Here’s the way it works before and after the California Homeowner Bill of Rights:
- Homeowner falls behind and stops making mortgage payments.
- Homeowner pursues a short sale.
- Lender files for foreclosure.
- Trustee’s Auction date is set.
- Despite a pending offer for a short sale, home can go to foreclosure.
I can only begin to imagine the trepidation felt by homeowners facing an impending trustee’s auction. The problem is most banks will refuse to review a request to postpone a trustee’s auction until the auction date is 3 to 7 days away. It’s not as simple as asking the bank to permanently stop foreclosure action. Certainly not a month or more in advance. Nope, the banks make homeowners chew on their fingernails wondering if the homeowners will be tossed into the street almost all the way to the 11th hour. It’s as though they get some kind of perverse pleasure out of this type of torture. Why can’t a bank postpone a trustee’s auction when it’s 30 or 60 days away? Why make homeowners wait?
One of the services I provide as a Sacramento short sale agent is requesting the postponement of a trustee’s auction. This service, far as I am concerned, falls outside of the scope of selling real estate and dangles dangerously into the realm of practicing law. Sometimes I can’t sleep at night, worrying if a sale will get postponed. A bank is not required to postpone an auction. In fact, if the investor for that loan is Fannie Mae, you can bet your bottom dollar the auction won’t get postponed. That’s why some short sale agents refuse to work on Fannie Mae short sales.
If the California legislature really wanted to pass a Homeowner Bill of Rights, they’d stop dual tracking after a short sale is initiated and verified. Not after short sale approval. Because after the short sale is approved, there is little reason for the bank to initiate a Notice of Default.
