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Sacramento Short Sale Approval From US Bank
Sellers ask me if it’s impossible to get short sale approval for a US Bank short sale because so many Sacramento short sale agents seem to encounter difficulties working with US Bank. I would not say that US Bank is harder to work with than any other short sale bank, but the US Bank short sale process is not as streamlined, per se, as other banks. A short sale that might take 4 weeks through Bank of America can easily take 4 months with US Bank. You’ve just got to have patience.
Take my recent US Bank short sale, for which I have been working with two loans, both at US Bank. This short sale has been in short sale negotiations for 2 years now. Two long years! Most of the time when a short sale takes this long, it’s because the buyers bailed. The buyers might hang in to wait 3 months or so and then they cancel the contract, just when approval is about to arrive. I’ve personally witnessed this phenomena over and over. They lose faith. They give up. Just when they should not.
We try to engage buyers, keep them informed and updated every single week, but no matter how hard we can try to nail them to the front door, they wiggle away. When the buyer cancels, the short sale starts over.
Having said all of this, most of the trouble in this particular transaction has been a denial issued by US Bank. I generally don’t let denials dampen my enthusiasm. A denial just means we are one less negotiator away from approval. One less person to deal with and one less obstacle to overcome. After a revised analysis, I repackage the short sale and resubmit. My philosophy is somebody is not listening to us or we did not present the facts in a light the negotiator can accept.
I can’t recall offhand how many rejections and denials we were issued on this particular US Bank short sale. US Bank rejected the sellers a few times. But we finally received that golden letter of short sale approval and release of personal liability. Two years later. You have no idea how ecstatic the sellers are right now. If there’s a way to get that short sale approval letter, this Sacramento real estate agent will get it. Just like if there’s a way to sell your home in Sacramento, I will do it. It’s called perseverance and determination.
Why Sacramento Listings Are Withdrawn, Canceled or Expired From MLS
Not to have a single withdrawn, canceled or expired real estate listing in today’s Sacramento real estate market is completely impossible among top producers, yet some websites rank agents by percentage of listings sold. If a Sacramento real estate agent had only two listings a year — and that’s about the number of listings that most agents list — and she sold one and the other seller canceled, the agent would show a 50% ratio, which is really bad.
There are many reasons why a home listing in Sacramento might not see its way to closing, and most of those reasons are out of the agent’s control. Let’s take a look at withdrawn or canceled listings, for example. This is excluding a canceled listing that comes back on the market with a new MLS number to reset the days on market, or is off the market for a spell during a winter vacation or improvement project. Typically, 3 things cause a canceled listing:
- Insanity
- Exhaustion
- Overpriced
Insanity. When an agent deals with a large cross section of the population, she is likely to encounter a few sellers who suffer from sort of mental incapacity. They could be completely psychotic or simply bipolar but not every seller is balanced. Is it the agent’s fault that she doesn’t have time to administer the Minnesota Multiphasic Personality Inventory test prior to accepting the listing?
Exhaustion. This happens more frequently during short sales because these types of transactions take much longer than other types of home sales. If the buyer, for example, drops dead or buys another home (same thing to the seller, basically), thereby canceling, the short sale can start over. There are many reasons for short sale rejection, and sellers need patience to eventually close. Some sellers give up the fight and choose foreclosure.
Overpriced. This is the most common reason for a withdrawn, canceled or expired listing. It is the worst mistake a seller can make, but sellers choose the sales price. When a home doesn’t sell due to price, sellers become angry at themselves and some of that anger ends up hurled in the agent’s direction, too, because who wants to squirm in their own hostility all by themselves? Misery loves company.
There is a guy in my real estate office who makes a very good living by working with withdrawn, canceled and expired listings. He spends all day in a space about the size of a phone booth calling these sellers. Can you imagine his phone conversations? The guy has got to be an armadillo in disguise or a saint, I’m not sure which.
In any case, all of these canceled listings can affect an agent’s percentage performance on some websites, and percentage of listings sold is not an accurate indicator of the agent’s actual performance.
A Perfect Storm Short Sale Denied
With the exception of an FHA short sale, I can’t recall the last time this Sacramento short sale agent lost a short sale. Every short sale I do in Sacramento pretty much closes as long as the seller doesn’t give up. It is extremely unusual and rare for a bank to deny a short sale these days. I’ve been selling and negotiating short sales since 2006, so that’s about 8 years, and back when short sales started, maybe half were accepted. Not so today.
Today, it’s about 100% that close, and I’ve closed hundreds of short sales. Because banks generally prefer a short sale vs foreclosure. Properties are most likely in better condition, which helps them sell for more money; and there is a pool of buyers who believe a short sale is a good deal even when it’s not.
To close a short sale, the transaction needs to be a round peg that fits into a round hole. Follow the rules and the short sale is approved.
To over simplify, the basic rules are this:
- Seller must qualify
- Sales price is market value
Sellers often ask me how I know their short sale will be approved, and it’s based on those two factors. But sometimes the investor guidelines stipulate that the bank cannot do a short sale. PSA agreements can make it more profitable for the bank to foreclose. We don’t have access to the PSA agreements as mere real estate agents, so we won’t know for certain whether the PSA will kick out the short sale until a package has been submitted and reviewed.
We can get around that problem by submitting for a HAFA short sale. Most of the banks participate in the HAFA short sale program, as long as the investor is not a government entity. Government-sponsored entities have revamped their own program versions. But when a bank does not participate in HAFA in 2013, that is probably a red flag.
You would think the bank could disclose upfront. You know, read the guidelines and say nope, don’t bother submitting. That would be too intelligent and logical. Two words that don’t describe the American banking system. Instead, they put everybody through the song and dance before slamming hopes.
When the Short Sale Bank Says No
You know the people I have empathy for? Is it my inlaws stuck in Chicago or my sister and niece in Minnesota who are enjoying those not-so-balmy temperatures? Or, is it the house sitters who are taking care of our home in Land Park? Nope, it’s those buyer’s agents in Sacramento who emailed some 20 offers yesterday for a home in Elk Grove. I answered email after email late last night after we landed in Tahiti. Explaining how many offers we received and how the seller is leaning toward accepting a cash offer. But the best news I got was not the short sale approval on yet another short sale in Elk Grove (which also arrived via email), it was the fact we received an extension from CCO Mortgage for my seller who is dying.
Short sale bank CCO at first said it would issue no such extension and would, in fact, start the short sale over if we could not close by December 20th. Sometimes it does not pay to take NO for an answer. I wrote a letter to the negotiator, set forth a plea for an extension, and the “absolutely no extension declaration” turned into a yes, here is your extension!
My Elk Grove seller is not a short sale though, which is another reason that buyers are climbing all over each other to buy that home. The dilemma is should the seller take a cash offer without an appraisal contingency or a financing offer? That’s a decision she needs to make. A cash offer will probably not yield as much cash as a financed offer as buyers who choose financing will pay more. They’re not forking out hard cold cash; they are financing that price increase. Of course, if the home doesn’t appraise for a ridiculous price, it doesn’t matter what a buyer offers to pay if it won’t close due to a low appraisal.
But how many offers does a seller need? Excuse me, there seems to be a large pelican-like bird on my deck that I need to check out. This is the view I woke up to this morning. Helps to put some of these dilemmas into perspective. All I have to say is Thank You, RBS Citizens Bank . . . and I hope my Elk Grove seller makes her decision soon.
