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Not All Short Sale Homes in Elk Grove Should Sell as a Short Sale
The number of Elk Grove short sales are declining
Why would a homeowner in Sacramento or Elk Grove do a short sale if the homeowner didn’t have to? That’s a question that’s been plaguing me because from a logical point of view it just doesn’t make any sense. What kind of real estate agent would railroad a seller into short sale status if that seller could sell as a regular traditional sale and not take the hit to her credit report, much less her emotional state of mind? As a Sacramento REALTOR, we are all required by the Code of Ethics to do what is in the best interests of our sellers.
To be fair, railroad might be a strong word. An agent might be completely clueless, I suppose, or an agent might be tempted to take the path of least resistance, that which seems easiest to her. Selling a home on the edge of a short sale as a regular sale can be tricky and complicated, but it can be done because I do it. Fast appreciation from spring of 2013 has turned many would-be Sacramento short sales into equity sales. It makes my heart break when I see a home sold as a short sale within a few dollars of being a traditional equity sale. It makes me wonder why a little more money could not have been squeezed from the sale, and why nobody tried to do it. It is laziness? Ignorance? Or, does the term railroad apply?
Take this homeowner in Elk Grove, for example. This is a guy who wanted to put his home on the market last fall because his wife was losing her job — a typical story in today’s real estate market. They called because they wanted to hire the best Sacramento short sale agent they could find. The problem was the home was cluttered, not that it needed to sell as a short sale. OK, every room was filled to the brim just about. Bedrooms filled with boxes. It was like a person came home from the grocery store to unpack the bags and just never put anything away except stuff that needed refrigeration.
The sellers were told to move out and into their rental property. Once the home in Elk Grove was vacated and the carpets were shampooed, it would show very well. The sellers were fairly well positioned to salvage credit and make a tidy profit. Instead, shortly thereafter, the sellers hired a “friend of a friend” and sold the home as a short sale . . . and a fixer, to boot. Later, the sellers sheepishly apologized to their first real estate agent and admitted they had probably done the wrong thing; they had panicked.
What’s done is done. No need to say anything negative about their present real estate agent.
My mother always said if you can’t say anything nice, don’t say anything at all. Of course, our REALTOR Code of Ethics requires it, too.
Your Sacramento Home Might Be Worth More Than You Think
Talk about a home that might be worth more than you think. Although I sold a ton of short sales last year — more than 100 — I also sold a bunch of regular equity sales in Sacramento, too. This year, I am selling more equity sales, which is a good sign. It’s probably not so much that the homes are necessarily worth a lot more than they were last year as it is buyers are willing to pay more for them. You see, what a home is worth and what a buyer will pay are really two different things. A smart Sacramento real estate agent spots these opportunities and capitalizes on them.
Why, I just sold a home for $65,000 more than it would probably appraise for. This is just one example of a home that might be worth more than you think; I have plenty more. When I first talked to the sellers of this particular home, which we will leave unnamed, it was apparent they needed to do a short sale. I collected the usual paperwork, their tax returns, bank statements, payroll stubs and we worked on the hardship letter together. Tweaked it, refined it, cleaned it up a little bit until the hardship letter was perfect. They had the property management company send me the keys.
When they had initially called, they said they were undecided about either listing with me or perhaps listing with their property management company. Now, this property management had admitted it had little experience in real estate and none whatsoever in negotiating a short sale, but for some reason, perhaps loyalty, the sellers felt that they should consider listing with the property management company. I simply pointed out the error with that kind of thinking and showed them what life could be like if they listed with an experienced short sale agent. So, they chose me, and may I say they made a wise choice.
I figured the home was worth, maybe $130,000. I studied the comps within a 1/4 mile. The street was known as a busy street, so that suppressed the price a bit more as well. But when I got out to the house and looked at it, I could not believe that such a structure would be worth only $130,000. My gut said it didn’t seem right. I don’t care what the comps reflected; it wasn’t a true picture. We have a hot market, and a three bedroom, two bath, two story with all kinds of updates should not be selling for $130,000. Plus, the street was a lot quieter at that end of town. Why, an investor would pay a lot more than $130,000. In fact, an investor might pay, say, $195,000.
I looked at the payoff to the lender on the seller’s first mortgage. After paying all the costs of sale, including commission, plus late fees, several months of interest, the seller would net about $500. But it would mean no short sale. No ding on the credit from a short sale. The mortgage would be paid in full. I quickly called the seller and asked if they wanted to try it. I suspect they thought I was nuts, but they agreed and we listed the home at, say, $195,000.
It closed at $195,000. What a long shot that paid off.
This isn’t my only story like this in Sacramento. If you are wondering whether your home might be worth more than you think, and if you’d like to avoid a short sale, call me. Even if the sold comps don’t support your value, this Sacramento real estate agent might be able to sell it anyway without doing a short sale. Call Elizabeth Weintraub at 916.233.6759. Put almost 40 years of experience to work for you!
