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Why the Buyer Matters for a Natomas Short Sale Offer
A good Natomas short sale offer involves a committed buyer.
Although it is rare nowadays to list a short sale because there are so few in Sacramento anymore, it doesn’t mean I change how we handle a Natomas short sale offer. The same rules apply, same principles and same practice. I know there are other listing agents who might grab the first Natomas short sale offer that comes along, but that’s not how I advise my sellers.
Having sold more short sales than any other agent in a 7-county area over the past 10 years, my experience as a top Sacramento short sale agent speaks volumes. We don’t want to drag the process out any longer than necessary. If the buyer refuses to conform to the practices we put into place, they are not a viable buyer for us. It blows my mind that buyer’s agents fight us, but they often do. They don’t think ahead, they don’t stop to consider the harm they cause, to the seller and the listing agent and everybody else in the transaction, when their buyer is not fully committed to the process.
But that’s true about a lot things. They want the world to conform to them and not the other way around. We don’t work with buyers like that. If they want to make unreasonable demands, submit lowball offers, fail to deposit earnest money, they can go make somebody else’s life miserable and not my seller’s.
We spent 8 days working with a buyer’s agent, who was wonderful, and her buyers, who were lovely and qualified, before going into contract. The buyers started out by asking for a shorter time period. We expect a commitment for 90 days and, if we get it done sooner, we look like heroes. But short sales can sometimes take 3 months. My experience has shown if a buyer won’t commit to 3 months, they are not candidates for a short sale. They are the type who might bail when the first shiny object diverts their attention.
They also thought the list price was negotiable. I am so freakin’ skilled at estimating market value and what a bank will take, that my sellers can rely on my estimate. If anything, prices could go up, not down. Eventually, though, after 8 days of negotiations, the buyers elected to accept our terms and our price. It was worth waiting for the buyers. It meant they were worth fighting for with the bank.
Sure enough, we got short sale approval for the parties within 6 weeks. We were also able to obtain a 10-day closing extension for the buyers since Trump’s FHA loan policy changes at the last minute messed this up. These buyers were a perfect match, and that’s what you need to close a Natomas short sale offer. We closed escrow yesterday, and the buyers now own a delightful home for $225,000 in Natomas. The most important component of many short sales is the buyer, next to choosing the right listing agent, of course.
Why Home Buyers Won’t Buy a Short Sale in Sacramento
Like any other home on the market today, even the few short sale homes need to be highly desirable in some way to entice a home buyer to buy a short sale in Sacramento. Price alone won’t do it because the short sale lenders will demand market value. I get emails from agents who ask if I would consider wasting my time and the seller’s time to submit garbage offers on behalf of their greedy little buyers who love to lowball, and you’ve got to wonder what planet these agents live on. As additional information, the agents might offer up the fact they’ve been successful with this approach once years ago, like anybody cares.
Oh, geez, thanks for telling me. I smack my head. Dang-nabit, I had no idea.
They might say let me tell you about my buyer. No, don’t tell me. I don’t care. I don’t want to hear about his or her motives, angles, mission. I care only if the buyers are willing to do what it takes to get the lender to approve the short sale. Will they wait for approval and not cancel? An agent asked yesterday if it was OK for the buyer to cancel after I worked my tail off to obtain the short sale approval letter, in the event there was something about the property the buyer didn’t like. Sure, I replied, but be aware that I will then drive over to that buyer’s home and slash the tires on his car. Oh, he laughed and laughed.
Wow, we really want to take that offer. The buyer sounds so dedicated.
Today’s buyers, most of them, don’t want to wait for the short sale process. If they do decide to buy a short sale, it’s because the home is unique and it’s the only one like it on the market for miles around. Other short sale buyers are those who have a home to sell, and they are are buying contingent on selling. No fuss, no muss, no risk. If the contingent home is my listing, for example, I know their home will sell because they will be realistic, so those generally work out. But there is not a flood of buyers for short sales today.
I sold a Victorian short sale home in downtown Sacramento a few days before I left for my long winter vacation early last December. I worked on that short sale while enjoying an oceanfront view and warm breezes. Everybody was happy at the inception. We submitted all of the required paperwork to both banks: to the Bank of America short sale department and Chase. Chase had recently joined Equator but was not yet in Equator for this type of Chase short sale. Before the end of January, we had HAFA short sale approval from Bank of America. Eureka!
Chase Bank, because its HELOC department wasn’t yet in Equator, dragged its feet for another 60 days, despite repeated requests and hammering. The negotiator at Bank of America refused to give us an extension on the short sale and instead insisted on starting over. An unusual shitty move when the servicing was not sold. When Bank of America re-opened the file, it somehow messed up processing it as a HAFA. A logical person would think Bank of America vendors look at the previous file, but that would be like expecting a Sacramento real estate agent to study the history in MLS of a previous listing — just ain’t gonna happen.
Despite the HUD identifying this transaction as a HAFA and the notes I routinely slipped into Equator as a reminder, nope, it was processed as a traditional. A short sale agent doesn’t ordinarily discover these types of bank screw ups until the counter is issued in Equator. The seller didn’t care about HAFA by that time.
At several points, the buyer wanted to cancel. She was tired of waiting and didn’t really understand the delays. She delivered ultimatums, which don’t work. At another time, the sellers wanted to cancel. They had moved out and no longer cared about receiving the HAFA incentive; they just wanted it closed. The opportunity to eat the negative cash flow and rent it was beginning to look attractive to the sellers. In between, neighbors called to ask if was OK for them to steal the seller’s cats and take the critters to city animal control. Like wha? My main concern was the amount of time it would take Bank of America to process this as a traditional short sale after Chase finally got its act together.
I find my way around stumbling blocks. It’s what I do. The short sale closed this week, with the original buyer happy as a clam, extremely excited and relieved. The sellers are ecstatic. They appreciated my calm demeanor and keeping them on track. Approval from both banks took 5 months. That’s unusual and a long time.
Although I have closed hundreds of short sales in Sacramento, there is never a guarantee that we can get both of the short sale banks to cooperate and issue approvals at the same time. Often issues and delays pop up, regardless of how streamlined we make the process. If something can go wrong on the other side, it often does. Patience is the key to a short sale. And buyers in Sacramento don’t have a lot of patience in today’s real estate market.
A Sacramento Short Sale Lifespan
For the first time in my life, which is almost since the dawn of humankind, MLS has not immediately loaded on my computer when accessed. I have an internet connection. MetroList is just not responding. It won’t open in Safari nor Firefox. It partially loaded in Firefox and then quit. There is no joy in Mudville; it’s trouble with a capital T that rhymes with P and stands for poop, and the Grinch has stolen Christmas.
We count on things in our life to always be there for us and never change. To work when we expect them to work. But that’s not how life works. Stuff goes wrong. People let us down; they die.
But Sacramento short sales can go on practically forever. I have a few I’ve been working on now for more than a year. A short sale doesn’t die. It doesn’t blow up. It doesn’t just go away and, in some cases, the short sale bank won’t even file a foreclosure notice. It’s not having the Notice of Default filed that can keep a short sale alive and pumping out blood long after the arteries have been sliced.
This is the little known secret that agents don’t realize. Once a bank says NO to an agent, many will give up. Not this Sacramento real estate agent. I keep on pushing until either the seller collapses from exhaustion or the bank says: All right, you got it. Here is your short sale approval. Few sellers are outright rejected in this day and age. This is not 2005, Dorothy.
If you want to work with a Sacramento short sale agent who has closed hundreds of short sales, call Elizabeth Weintraub at 916 233 6759. I really doubt you will find an agent in the Sacramento Valley who knows more about short sales.
Make a Commitment to Your Sacramento Short Sale
If you’re committed to doing a short sale in Sacramento, you should be committed to the long haul, just like your Sacramento short sale agent. It’s kind of a two-way street. A seller promises to provide financial documents over and over until her eyes spin, and an agent promises to submit those financials to the short sale bank while keeping her personal opinions to herself. OK, maybe not that last part. The point is nobody gives up and splits.
An agent called me yesterday to say she had received short sale approval for a seller on a file she started working on about a year ago. She had struggles like we all have struggles. It was tough to get the home in marketable condition, and one of the parties to the short sale was not exactly cooperable. The agent had put the home on the market but could not open the short sale with the bank because she was missing documents. Her solution was to cancel the listing.
This is the thing about short sales and life in general. You can learn from your own mistakes or you can learn from somebody else’s. It’s easier to learn from somebody else. My suggestion to the agent was to put the home into temporarily off the market status, but don’t give up on your seller. Don’t look at the seller who isn’t cooperating, focus on the seller who is agreeable and committed to the short sale process. The other guy will come around.
Sacramento short sale agents have a responsibility to many parties in the short sale. As a listing agent, we have a fiduciary responsibility to the sellers. If there are two sellers, that responsibility extends to both parties, even if those parties are divorced and not speaking to each other. As a short sale listing agent, we have a responsibility to the buyer’s agent and the buyer, too. If an agent has reason to believe the short sale will not happen, the agent should not list that short sale nor present it for sale to the marketplace. It’s not fair to a buyer to sit in escrow week after week waiting for approval when it’s not gonna happen.
The agent took the home off the market and put it into limbo status in MLS. She continued to work on the short sale. She didn’t throw in the towel and walk away. She honored her commitment to the Sacramento short sale. It took a year but both parties finally cooperated and she received short sale approval.
I keep telling people this secret but they don’t believe me. The secret to a successful short sale is commitment. Don’t give up. Not every short sale will close the first time around. You might have to submit that short sale for approval a second time or a third time or a fourth time. My longest short sale was almost three years but we closed. It doesn’t matter how long it takes to close a short sale; it matters whether one is made from the material to see it through to fruition.
Make a commitment to your Sacramento short sale.
Who is Your Sacramento Short Sale Bank?
The seller’s mortgage lender is what will make or break the Sacramento short sale. Oh, sellers think it’s the value of their home or the dire circumstances detailed in the hardship letter, but none of that is as important as the short sale bank. Second to the Sacramento short sale bank is the investor. You can have a great short sale bank, for example, like Bank of America, but the investor can totally suck, like Fannie Mae.
When I talk to potential short sale sellers in the Sacramento area, the first question I ask is who is the lender. Generally, people don’t know if they have a Fannie Mae or a Freddie Mac loan. While they are busy vehemently denying their loan is held by Fannie Mae, I am busy running the address on my computer through Fannie Mae’s loan lookup site. By the time the seller finishes telling me how she is absolutely positive her loan is not held by Fannie Mae, I can find proof that Fannie Mae holds her loan.
It’s important to know whether the short sale bank has delegated authority or if the investor will be required to approve the short sale. All of these things are taken into consideration when giving a seller an estimated time frame to complete the short sale process. I’ve worked with so many banks that I’m often right on the nose with the amount of time it will take to do the short sale. I can look up my closings over the past year — I average about 10 short sale closings a month, more than 100 a year — and give my best guess based on how long it took me to do those short sales.
There is no reason for a bank to take longer than 10 days to approve a short sale. Seriously. But some banks routinely take 3 to 4 months. Some 6 to 8 weeks. And God forbid should a buyer walk away, many start over even though they swear it’s a soft decline, it’s not. It’s a do-over. Which is the dumbest thing ever. That’s ranks right up there with walking through an unmarked intersection blindfolded. It’s just stupid.
Here is a partial list of the banks / lenders this Sacramento short sale agent has closed short sales with, and I’m sure there are more that have slipped my mind. Some, perhaps, on purpose:
- Aurora Loan Services
- Bank of America
- Bayview Financial
- Carrington Financial
- CCO Mortgage
- Citimortgage, now One Main Financial
- Colonial National
- EMC Mortgage
- Flagstar
- First Horizon
- GMAC
- The Golden1 Credit Union
- Green Tree Financial
- Home Eq
- Horizon Bank
- HSBC
- IBM Lender Business Processing (LBPS)
- IndyMac
- JP Morgan Chase
- LCS
- Litton Loan Servicing
- M&T Bank
- Met Life
- National City Bank
- Nationstar
- Navy Federal Credit Union
- Ocwen Financial
- OneWest Bank
- PNC Bank
- Paleco Credit Union
- Saxon Mortgage
- Select Servicing Portfolio
- Seterus
- Specialized Loan Servicing
- Sun Trust
- US Bank
- United Bank
- United Guaranty
- Wachovia
- Wells Fargo Bank
