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Using Common Sense in Sacramento Real Estate
Common sense mixed with the truth must be a wild concept to some. I wish people would quit thanking me for being honest with them, because the message they’re really sending is they expected that I would lie. It’s not that I couldn’t lie if I wanted to because, let’s face it, I sell real estate in Sacramento and just to be successful in that profession there is a certain amount of enhancing the truth to push product; it’s the spin. Can’t be in marketing without the spin. But it’s that I don’t go out of my way to make up crap because a) it’s stupid and wrong, b) I’d have to remember it, and c) it’s easier just to tell the truth.
Years ago I had a girlfriend who was a pathological liar. You couldn’t believe a word that came out of her mouth. I don’t know if she lived in a fantasy world or just liked to fool people but she’d tell the most outrageous stories to complete strangers, and none of it was true. We’d meet cute guys at a party and she’d tell them we were flight attendants or we lived in Japan. There was no reason for it. Guys who are 22 don’t really care what you do for a living when they are seized by hormones.
Personally, I find being truthful rewarding. It’s second nature. It’s not that I don’t know when to keep my lips zipped, because I do, but the older I get, the more I enjoy telling people what I think. I say things at times that other people wish they could say but they haven’t yet given themselves permission to do so. This is one of the freeing benefits of aging. We give ourselves permission to speak our mind. They don’t tell you about this in Sunday school.
Not that I’m out there in my yard waving my fists at kids and yelling get offa my lawn you hoodlums, and that little pooping chihuahua with you, too. Reality and protocol are still embedded. But I will tell people what I believe.
Of the five senses, common is my favorite.
Like this guy yesterday from somewhere in the Northeast, maybe New Jersey. He wanted to know when he should do a price reduction on this home. It was listed with an agent. He poured out the entire listing history in his email, including suggestions made by his agent, which he had been ignoring. My-oh-my, whatever should he do?
He should listen to his real estate agent and stop asking for direction from strangers on the other side of the country.
Then, an elderly fellow called to talk about his friend whose husband had died, and he thought maybe his friend should do a short sale. I looked up the information in records that are not accessible to the public and easily sized up the situation. Yes, his friend was upside down but there was no reason for her to short sale. She wasn’t responsible for the mortgages. She should get out of title. I suggested he obtain legal advice. I was looking at it from his friend’s point of view, which was why go through the hassle and misery if you don’t have to?
See, common sense pertains to so many things. And it applies to Sacramento real estate as well. While it would be nice to lounge about and dispense sage advice all day while being fanned and fed seedless grapes, the fact is my job is to sell real estate.
A Short Sale Home in Woodland Closes
The first time I spoke to a particular seller of a home in Woodland, this Sacramento real estate agent was in the middle of a four-day vacation in South Carolina at Hilton Head. My husband and I were driving across the island, searching for a restaurant featuring Gullah cuisine when my cellphone rang. The seller was such a refreshing voice to hear. A person who wanted my help. I like to help people, that’s why I sell real estate.
Unlike a caller earlier that day, a seller from Folsom who was furious because I had answered my phone “when I was not at home.” On a Sunday, no less. He expected me to physically be in Sacramento and was very upset that I was not, even though it didn’t make one hill of beans difference regarding the sale of his home in Folsom. He evidently believed that he knew better how to run my business than I. Not every seller is a rational person and not every seller makes sense.
This person yelled and screamed and was obnoxious. I offered to cancel the listing for him, since he was so irate. Nasty people? No time for them. So, it didn’t bother me in the least when he immediately listed with another agent at a higher price. Last I saw of his home he had canceled that listing 30 days later because no buyer in her right mind wanted to pay his price. Sometimes, these types of things are a blessing in disguise when I no longer have to deal with them.
The woman who called and needed my help wanted to sell a short sale home in Woodland as a short sale. Well, I sell hundreds of Sacramento short sales, so she came to the right person at the right time. Turned out she lived in North Carolina, and was astonished to hear I was driving around South Carolina. But she had confidence that I would sell her home. She had gone to my website and knew my experience and decades in the business. It didn’t matter to her that I was in Hilton Head at the moment.
Later that week, I met with the tenant who lived in the home in Woodland. I shot professional photographs, studied the comparable sales and the seller chose a sales price. Other real estate agents in Woodland expressed an opinion that they thought the price was too high but it was right on the money. We received an offer from a qualified buyer, the BPO came back at value, and the short sale home in Woodland closed yesterday.
The negotiations took 5 months. Two loans plus mortgage insurance, so approval was necessary from all three. The buyer waited patiently all of this time because the seller selected the right buyer from the beginning. An added bonus was the bank did not require a price increase because prices have gone up since then. That can happen with short sales that take a while to close, just fyi.
The thing is no matter where I am or what I am doing, this Sacramento real estate agent always tries to answer her phone. I continually work on selling my listings. I don’t turnover my work to an Elizabeth Weintraub Team member while I am on vacation, although I certainly could. Because I don’t have to be sitting behind my desk to sell real estate in the Sacramento Valley. That’s why we have laptops, iPads, cellphones and DocuSign. What matters is that I get the job done and my client is happy.
Not Every Sacramento Home Buyer is a Buyer
Every Sacramento home buyer should enjoy the luxury — and it is a luxury — of working with a buyer’s agent who will check out the property records before writing a purchase offer for that buyer. A Sacramento buyer’s agent at the very least should examine basic details but so many do not. When a buyer wants to write an offer, a lot of agents will just write it without giving much thought to the possible consequences for a buyer. I suppose they might think it’s not their job or maybe they don’t know how.
An agent has many sources at her or his disposal to find this data. At minimum, even if an agent doesn’t run the comparable sales for the Sacramento home buyer — which for my team members would be inexcusable — the agent should check to see who owns the property. Is it one person? Is it a trust? Does the owner’s address match the property address or are the owners living out of state? A quick call to the listing agent would confirm whether two people are on title or if one of them is deceased. You know, just stuff that makes the entire transaction run smoother and gives the buyer enough information to make an intelligent decision.
A potential Sacramento home buyer called yesterday about wanting to buy a home along the river that is a short sale. He asked if moi, his newly found Sacramento real estate agent, would be willing to write a purchase offer for him. As an experienced short sale agent, the first thing I did was look at the tax rolls. I see that this is an investment property for the seller. The second thing I notice is his second loan is a gigantic refinance for many thousands of dollars, and the lender is National City.
National City is now owned by PNC. This makes it a PNC short sale. A second loan held by PNC, especially a hard-money loan that carries recourse in California, is a difficult short sale to negotiate. That’s because PNC knows it can go after the seller personally and try to collect the full amount of the loan should the home go to foreclosure. When the security for that second loan is wiped out, because it’s a cash-out refinance, that lender, you can bet, will pursue it.
If the seller is not willing to negotiate with PNC upfront in this type of short sale, well, the odds are it will not get approved as a short sale. If PNC approved the short sale, by law it must release the seller from liability, but it is not required to approve a short sale.
Not only that, but there is a trustee’s sale pending shortly. It is very possible that a seller who waits until the last possible minute to put a home on the market as a short sale prior to a pending trustee’s sale is not a seller who is willing to negotiate upfront, but you never know. Weird things happen in real estate every day.
Armed with this information, the buyer chose to move forward and write an offer because he decided that he had little to lose. He was prepared to be disappointed. I asked a team member on the Elizabeth Weintraub Team to prepare an offer for him. My team member explained that we need a preapproval letter to accompany the offer because the way to postpone a trustee’s sale is to submit a purchase offer. The bank will not allow submission of a purchase offer without a preapproval letter. An offer without a preapproval letter is not an offer. It is an incomplete offer and considered insufficient to postpone a trustee’s auction.
The buyer could not produce a preapproval letter. He was irritated about my team member’s insistence on it, too. You see, he had sold his own home as a short sale a few months back.
The buyer said fine, he’d find another Sacramento real estate agent to write his purchase offer. That was actually a very good idea on his part, but a wasted effort.
How to Get a Short Sale Credit Report as Paid in Full
Up until now, it has been very tricky and almost impossible for a seller to immediately buy a home in her own name after closing a Sacramento short sale unless the short sale credit report shows paid in full. There were a few other ways to do it such as having a high FICO and big down payment, and working with a smaller bank that funds portfolio loans, but if a short sale seller has a high FICO and a big ol’ wad of cash, the short sale bank probably won’t grant the short sale. It has been like a Catch-22.
There is one way around it. Very few real estate agents seem to know about it because their bedime-reading material is not changes to government short sale programs. It’s how to get a short sale credit report as paid in full. I’ve read the recent HAFA Supplemental and know that this change exists, but I haven’t really tried it until now. This is the coolest thing ever. To qualify, the seller cannot have a Notice of Default filed. It is preferable to be current on the mortgage payments, but if a seller is behind a payment or two, it’s not the end of the world. Not every short sale bank investor will allow a seller to be current but many have loosened guidelines to allow for it.
Which makes sense when you think about it, even though banking rules don’t always make sense to us mere mortals. It makes sense that the investors would prefer to get some money than no money, but that would mean somebody was actually looking out for the investors and not just pocketing big ol’ wads of cash through the PSA agreement. When a seller comes to the bank to ask for a short sale and plans to continue making payments, you’d think a bank would not have to say: Sorry, we don’t want your stinkin’ money. Stop making your payments, go into arrears, and then we’ll short sale it. Because that’s ludicrous. But like I said, banking rules don’t always make sense until somebody yells out: Hey, what’s that man doing behind the curtain?
The new HAFA short sale guidelines allow for a different type of reporting of the satisfaction of mortgage for less than the full balance to the credit bureaus. If there is no Notice of Default filed, the short sale credit bureau reporting is PAID IN FULL. Not paid in full for less than agreed, no, no, no, none of that garbage. Paid in FULL. Do you know what Paid in Full means to a person’s credit report? It means the loan was paid off. Period. There is no derogatory credit. If there is no derogatory credit, there is no hit to the credit score.
Paid in full for a short sale credit report is huge. This is humongous. This is incredible. About time, too. If you’re thinking about doing a short sale in the Sacramento area, call your #1 Sacramento short sale agent, Elizabeth Weintraub, at 916 233 6759. I am a HAFA Certified Specialist.
The Worst Sacramento Short Sale
A bouquet of daisies can brighten up just about any old dreary situation — whether it’s a Sacramento short sale that’s driving you nuts, the fact you’re living back home with your parents as 36.4% of Sacramentans adults aged 18 to 31 are according to 2011 Census Bureau data, or maybe you feel too sick to go to work because you’re just plainly sick of work. I have a lot of daisies growing in my yard in Land Park, which I didn’t plant, but they’re thriving in the back yard gardens just the same. So, I hope you like the photo I shot of the daisies I picked.
Daisies perk me up. You can’t help but smile when looking at them. Daisies are probably the happiest flower there is. Even when they’re twisted and growing weirdly to reach upwards toward the sun because some person, I’m not saying who, has not weeded the crap around them, daisies are still joyful. Dancing. Spreading glee.
Unlike the poor soul who called yesterday about doing the worst short sale ever. I looked up the property in the tax records first because that tells me a lot about the seller, the property and what’s happened over the years. Let’s say this condo is in Roseville. It was enough to ascertain that the homeowner had probably been involved in a loan modification for a while. Yup, I was right about that. Plus, he last made a payment 2 years ago. Those things are actually pretty good aspects for a potential short sale in Sacramento.
On the other hand, an interrupted bankruptcy not yet dismissed, another bankruptcy petition on the horizon and a hard-money second mortgage without a loan number, which has most likely been charged off, are not good things. A homeowner can’t do a short sale when a bankruptcy is pending. His Sacramento short sale agent can’t negotiate a second mortgage without a loan number. Hard-money lenders play hardball, if they play at all due to the nature of recourse. And, let’s not even talk about the potential for federal income tax liens or that the homeowner’s association is threatening to sue for $25,000.
Buyers will pay for a lot of things in a short sale. Some buyers will even pay delinquent HOA dues on behalf of the seller, but it’s got to make financial sense. I finally had to ask the caller if he would like to look at the situation objectively. I mean, let’s just isolate one aspect such as the delinquent homeowner dues. First, I don’t know how a homeowner’s association can claim it is owed $25,000 when the dues are around $300 a month. Are they demanding a percentage of equity?
But let’s just say that number is correct. This person’s Roseville condo is worth about $150,000. So the question is if a buyer is paying $150,000 in cash to buy this condo, is there an incentive to pay an additional $25,000? The Sacramento market is hot, but it’s not that hot. The seller agrees. He has questions he needs answers to and more information before choosing a course of action.
Actually, his short sale could be worse. I can think of more things that would make it worse, but why make myself or anybody that miserable? If you’re wondering about a short sale or maybe just selling a home in Roseville, you can call Elizabeth Weintraub at 916 233 6759, and we’ll analyze your situation together. Every short sale is different. Even the worst ones.
*Some of the facts have been changed to protect the homeowner’s privacy.
