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Where to Find Good Deals on Foreclosures in Sacramento
Just what is the deal with all of those Sacramento foreclosure listings potential buyers find online and get all excited about? Man, you’ve got your auction houses, trustee sales, preforeclosures, short sales, bank-owned homes, HUD homes, the list goes on, and it’s enough to make a poor buyer’s head spin. Let’s not even talk about Property Radar because that’s way too confusing for even licensed real estate agents to navigate much less a poor first-time home buyer, but talk about it I suppose we must.
For starters, you can pretty much discount at least 90% of the stuff you find posted online, unless it is posted on a reputable website in which all of the information on that website is screened for accuracy such as MetroList — but even the public can’t access all of the up-to-minute information available from MetroList like a real estate agent can. We pay big bucks for dues to these businesses for a reason. They have a monopoly.
The preforeclosures that look like listings are typically not for sale. Some buyers spot preforeclosure homes on a website like Zillow, which buys a feed from third-party vendors that downloads listings of homeowners in default. It generally means a homeowner is behind in making payments. A preforeclosure does not mean the home is for sale or will ever be for sale, nor does it mean anybody has the right to start poking around the property, looking in the windows, unless they want to get shot for trespassing.
A short sale listing could be for sale or it could be a contingent short sale or a pending short lender approval status, in the latter cases it means somebody else beat ya to the punch and has already written an offer that the seller accepted. Some short sale status information, especially those advertised in MetroList, are very confusing and laypeople can’t figure out whether they are for sale or not.
If you plan to bid on a trustee’s sale, you’ve got to figure out if the minimum bid is reasonable or the opening bid is unreasonable. If it is unreasonably high, it means the bank doesn’t want anybody to bid on it and prefers to take the home in foreclosure because the bank might make more money to foreclose than to sell at market. If it is reasonable, then you better be prepared to bid with the courthouse steps’ sharks, those guys chewing toothpicks and sticking unlit cigarettes behind their ears. They know what they’re doing; you don’t. Plus, you’ll needs lots of cash. No financing.
There are always auction websites such as auction.com where you can go to buy auction homes online, finance those homes, and you can name an agent to represent you. Be careful of shill bids and reserve pricing, figure out incrementals, and know whether you’re bidding on a short sale, foreclosures in Sacramento or a flipper.
If you like, you can look at those overpriced homes HUD lists online at Homepath, where there is no appraisal because the home probably won’t appraise at that price. The government doesn’t care if you’re upside-down the day you buy.
Or you can just cut to the chase and talk to your Sacramento real estate agent and ask a professional to find you a good deal. But bear in mind we have very little inventory and stiff competition for the well priced stuff. Maybe your best bet is just to try to buy a home? Not everybody needs to get a smokin’ deal to do well. Those searching for smokin’ deals often end up with nothing but black hands and shredded beliefs based on getting something for free.
Another Chase HELOC Short Sale Closes in Spite of Chase Bank
I wrote about a Chase HELOC short sale earlier this spring that was messed up 10 ways from Sunday by Chase, yet due to sheer determination and copious amounts of perspiration, and in spite of the ineptness of Chase’s HELOC short sale department, I got it closed. (I can hear my dead mother in my head whispering: women don’t sweat, we perspire.) In that blog, I described Chase Bank as ambling along “like a fat walrus after a big lunch drooling fish guts down its chin,” and that perspective hasn’t changed one iota.
It’s not like we don’t have enough other distractions as a Sacramento short sale agent that we need to pile more crap on our plate by throwing the completely abysmal methods Chase Bank, as a junior lender, employs on top of it. But you get what you get in Sacramento short sales.
We can’t always choose our dancing partners, and I would not put a short sale seller through more misery by turning down her short sale simply because she has a second mortgage with Chase Bank. That would be ridiculously unfair to the poor seller to be penalized in that manner. But I’m not saying other agents won’t refuse because they might. Especially if they have a lick of sense in their heads, unlike this glutton for punishment of a short sale REALTOR .
When I think back to when this short sale began, I was kicking my toes in the sand at South Beach, strolling along the water’s edge with my husband during our winter vacation last December, when my phone rang. I dug into my cute little Kate Spade wristlet a client gave me as a closing gift and pulled out my phone. Like I said, I’m a glutton for punishment. What other kind of moron would answer her cell on vacation like this?
I assured the caller I could handle her short sale when I got back to Sacramento in January, snatched a pen from my husband whom, as a gritty journalist, I can always count on to carry a pen even while we’re on the beach shooting photos of brightly colored umbrellas with a beach-ball blindingly brilliant blue sky on the horizon, to write down her information.
We closed this short sale this week, 7 months later. But not before we weeded through a lot of difficult buyers and a break-in by thugs that resulted in the theft of all of the built-in appliances, which required additional security methods much to the chagrin of the out-of-area sellers. Even though we sent all of the paperwork to both banks, Wells Fargo gave us turnaround in 4 weeks, but Chase chugged on. Escalations help somewhat but the fact is Chase HELOC seems to remain a Neanderthal when processing a short sale.
Window Lengthens to Buy Again After a Sacramento Short Sale
Coinciding with the dropping rate of short sales in Sacramento, Fannie Mae has announced it will not allow a buyer with a short sale on his record to buy another home for four years, beginning August 15th, 2014. The waiting period to buy again after a short sale used to be 2 years. This means is you’re a home buyer seeking conventional financing who completed a short sale less than 4 years ago, you need to enter into a purchase contract to buy a home before August 15th. That’s only about a month from now. You’ve got to get cracking.
A few years ago, it was not unusual to see almost 3 out of 4 of the homes on the market for sale as a short sale or a foreclosure. Not so today. Today, the real estate market in Sacramento has shifted and fewer than 10% of the homes for sale are short sales. That’s a dramatic drop and shift in the marketplace.
If you are selling a home as a short sale, it means fewer buyers will want to buy your home when 90% of the other homes for sale are not a short sale and do not involve approval from one or more short sale lenders. Unless you’ve got an extraordinary home in high demand, like a 4,800 square-foot mansion in The Rivers that I just put into escrow or an entry-level home below $200,000, you might wait a while to sell your home as a short sale.
But the sellers who have already sold as a short sale and now want to buy again after a short sale could get locked out of the marketplace for a while if they don’t buy before August 15th. FHA loans still carry a 3-year waiting period, but Fannie Mae for conventional loans, without extenuating circumstances, well, you have to wait 4 years if you don’t act within the next 30 days.
If you have 20% down and want to buy a home within 2 years of your short sale closing, now is the time to buy a home in Sacramento. You can call Elizabeth Weintraub, the best Sacramento short sale agent in the Sacramento valley, at 916.233.6759 for more information.
What’s In It for Agents To Do a Sacramento Short Sale?
There are days I ask myself why as a busy agent would I ever do another short sale, and then before I answer that question, I take it on. It’s not just me, the short sales in Sacramento, the few that still exist, are becoming more convoluted and complicated, if that’s possible after all these years. Nothing is a straight story anymore. There is no such thing as a simple hardship letter and automatic short sale approval. Nope, all of the short sales seem to involve years of delinquent dues, past due utility liens, judgments, court settlements, bankruptcies, horrific medical setbacks, in addition to having two or more mortgages to short sale, layered with mortgage insurance on top of Fannie Mae.
Not to mention, some of the buyers for these are no walk in the park, either. They’re probably VA buyers or obtaining CalHFA loans, and the properties probably require repairs, which could involve 203K loans and / or energy efficient mortgages. These additional complexities are more than most agents can handle or want to handle.
There are not very many Sacramento short sale agents in town who a) know how to handle these and b) are willing to handle these types of transactions. Why would any agent in her right mind do a short sale today when she can sell a regular sale and be done with it in 30 to 45 days? I’m sure that’s a question that some agents ask themselves. It’s a question I brought up to sellers last week as well, and I just put it out there on the table.
Now, I made them wonder. What was in it for me, the agent? Why would I agree to do their short sale when it’s so much more work and extremely time consuming? It’s not like I get paid more to do it because I don’t. I charge the same commission to do a short sale as a regular sale. I get paid the same. And I do tons more paperwork, all of which is contingent until the bank approves the sale. There is no transaction unless the bank approves it.
So what’s the deal? See, now I have you wondering, too.
The answer is somebody has to do it because otherwise sellers would have to pay a lawyer. And most sellers can’t afford to hire a lawyer. So, I handle the short sale for them at no out-of-pocket expense for them. All of my fees are paid from the proceeds of sale. It’s basically a free service for the seller. I know how to close these tricky little suckers, so what the hey. It’s a little bit like combining a public service with a business enterprise. A little pro bono work.
Then, yesterday, I received approval on 3 short sales that each had their own particular set of circumstances that would cause a normal agent to drink Draino. Because a normal agent would not have received approval on those short sales. I have a talent for it. What can I say?
Astonishing 2014 California Real Estate Laws in the Works
This year is shaping up to be an interesting year for new 2014 California real estate laws, which will affect us in Sacramento. For so many years the new laws have been more narrow, but this year will be different. In some ways, you’ve got to wonder why our California Assembly members had to propose some of these new real estate laws, and the answer is because they don’t (shudder) exist or our present laws are unclear. It’s enough to make some of us feel like dropping out and engaging our brains elsewhere such as searching for a Pinata Party during Plants vs. Zombies, or throwing a sheet around our waist and dancing through the house yelling toga, toga.
Let’s look at AB 1513, the so-called Squatter’s Bill. This is a piece of legislation that will allow law enforcement officials to remove unwanted persons from your vacant property. That’s right, under current law, a vagrant can break into your home, set up shop and you can’t immediately throw them out. They can party away like in Animal House for 30 to 60 days while you helplessly look on, dangling a piece of paper that says you’re entitled to an unlawful detainer. Well, I probably could get them out. As a Sacramento real estate agent, I have once resorted to banging loudly on the door and screaming FBI, I hate to admit, and then listening for the back door to slam as the squatters scatter like rats.
Another is AB 2039, targeting auction companies such as Auction.com, which is owned in part by a former third-party vendor company that processed short sales. This company has partnered with bad-mortgage purchasing companies such as Nationstar and forces real estate agents to allow this company to take over the transaction — kind of like a squatter, you don’t want them but you can’t get rid of them. This legislation would at least hold the real estate agent harmless from the actions of the auction company.
It boggles my mind as to how these auction companies are successful anyway. Because a buyer must pay a 5% premium to the auction company (on top of the commission) to buy the home as a short sale, and the bank wants market value. Seems to be a conflict of interest in that area, plus, how does the buyer obtain an over-market loan when it won’t appraise? Fortunately, I have been successful at not having to deal with Auction.com in any of my hundreds of Sacramento short sales, knock on wood.
My favorite newly proposed real estate law is AB 2136, which would clarify that a real estate agent is not required to keep a record of Tweets and Texts pursuant to a real estate transaction because those forms of communication are not considered a document. This means when I’ve receive a text message during sex, I can safely answer it in the throes of passion and not worry if it’s later deleted. I like that.
See, all good things coming out of our California Assembly, designed to improve our lives. Now, if they could just pass the mortgage forgiveness extension, we’d be well on our way to recovery. As it stands now, all of those poor homeowners who have successfully completed a principal mortgage reduction through a loan modification are positioned to get hammered on taxes. We have an exemption for short sales, but not loan modifications. Oy.
