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What Sort of Terms Make a Good Sacramento Short Sale Offer?
A good Sacramento short sale offer meets bank requirements.
Because agents rarely write a Sacramento short sale offer nowadays, especially if there is a similar home that can close escrow sooner, it is not unusual for an agent to overlook how a seller and her listing agent may view the terms submitted. In fact, now that I think about it, many agents, it seems, tend to ignore the other side of the transaction. They don’t always think ahead or consider how the offer might be received, you know, they seem incapable of predicting how the seller may react. They just know what they hope to accomplish when they barrel forward, guns blazing, and then wonder why their offers are continually rejected. Must be somebody else’s problem, not theirs.
Usually there is a little bit of give and take when negotiating, except for short sales. A Sacramento short sale offer is a whole different animal, yet some agents treat it like a regular sale. It is not a regular sale. Everything is subject to bank approval. The biggest mistake that buyers and their agents make is to think the bank gives a crap about them, and they apply all sorts of weird thoughts to the process like the bank is desperate or their offer is in the bank’s best interest, both of which are crazy. They think like Donald Trump and assume the world revolves around them.
We analyze every Sacramento short sale offer to try to predict the likelihood of the transaction closing. I share with buyer’s agents the fact no agent over a 7-county area during the past 10 years has more closed short sales than Elizabeth Weintraub. Not to brag about my track record, no, my point is to set aside any fears that the short sale could blow up or somehow not close. When I accept a short sale listing, I take it because it fits criteria to close. When I discuss a Sacramento short sale offer with my seller, we examine the buyer’s ability to stick with the transaction, rise to the occasion (if required) and to close.
The types of terms that make a good purchase offer for a Sacramento short sale agent are the buyers’ strong commitment to the short sale process and amount of flexibility. This means being willing to wait for approval, even if that approval will take 3 months or longer. Our reasoning lies with the fact the clock for foreclosure is almost always ticking. If the short sale buyer skips out on us, we might not have enough time to sell to another buyer. Banks won’t always postpone a trustee’s sale.
We also prefer buyers who can close within 30 days. Buyers who are strapped for cash, need down-payment assistance or closing cost assistance are not always a good candidate for a short sale because:
a) short sales are sold AS IS, meaning any lender-required conditions are generally satisfied by the buyer, and
b) not every short sale bank will give away a big chunk of its profit to the buyer as a closing cost credit, and
c) there are a number of fees many banks refuse to authorize, which means the buyer must pay those fees.
No money? The short sale cancels. Further, if the sales price is the top sales price the buyer can qualify for, that buyer will be hosed if the bank demands a higher price. Our seller’s market in Sacramento is appreciating. Due to the time lag for short sale approval and due to some banks’ inabilities to hire credible BPO agents who turn in screwed-up values, that sales price could increase. If the buyer has zero flexibility, that’s not a gold-standard Sacramento short sale offer.
You might wrongly presume after all of this that we don’t accept VA offers, but we do. We love VA buyers and will work with VA loans all day long, providing the buyers are committed and meet the criteria of a good Sacramento short sale offer.
Why You Need a Short Sale Agent to Buy a Short Sale
Top Short Sale Agent in 7 Counties in Sacramento Valley over 10 years.
Home buyers absolutely should hire an experienced Sacramento short sale agent to buy a short sale, there is no doubt about this fact in my mind. I don’t say this simply because I have listed (and therefore sold) more short sales over 7 counties than any other agent, which makes me the top Sacramento short sale agent in this area. By a wide margin. I say this because agents who don’t deal much with short sale banks and are not on top of the new laws, are placing their buyers in a disadvantaged position.
There is a huge difference between an agent who has sold 5 short sales, one every other year, and a short sale specialist who has amassed almost 400 sales in this arena over the past 10 years. I am constantly amazed when talking to buyer’s agents about the intricacies of short sales how little agents know as opposed to how much they THINK they know. Just because one bank in one short sale handled a situation in X manner has no bearing on a different short sale.
Yet, that doesn’t stop these guys from claiming to be an expert in an area in which they have almost no expertise. I call that a distorted reality, like the state of mind where Donald Trump resides.
I can tell so much about a short sale just by analyzing public information. There are some short sales in Sacramento that are not short sales. Oh, yes, they might be listed in MLS as a short sale, but they are not, for a plethora of reasons. By calling the Elizabeth Weintraub Team, buyers can lessen the chances of going into escrow on a home that may not, under any circumstances, close.
In fact, just this morning a preapproved buyer called about a short sale in Sacramento after reading an article I wrote for The Balance about hiring a short sale agent to buy a short sale. I made excellent points about not hiring some Joe Schmo without short sale experience. And it’s a good thing he contacted me. The short sale he is considering has no photograph in MLS (which is a violation) no marketing comments, and the price is jacked up two hundred grand from last year’s canceled listing.
Which is only the tip of the iceberg. Without going into detail about the financing, and the subsequent short sale bank, we might very well save this buyer from disaster. It’s a good thing he called a short sale agent to buy a short sale. You can call, too; call Elizabeth Weintraub at 916.233.6759.
Chart: Trendgraphix, used with permission
How A Nationstar Short Sale with Freddie Mac Closed After 6 Months
Even small children are excited to close a Nationstar short sale © Big StockPhoto
You won’t find one Sacramento Realtor in town who wants to sell a short sale home three times, but every so often, despite precautionary measures on the part of the listing agent, it can happen, and definitely was the primary cause of yet another short sale home taking 6 months to close escrow. It’s generally not the short sale banks. It’s the crummy buyers and, yes, even their buyer’s agents are often to blame for failing to vet the buyers.
We put this Nationstar short sale home on the market in mid April, during the hottest time of the year in Sacramento that one can possibly sell a home. It still took 2 months to get a list-price offer. Idiots were submitting lowballs, pushing, demanding, when the comparable sales clearly supported a higher price. Finding the right buyer takes longer this year but eventually one shows up.
When we received a list-price offer, we discovered the mortgage had recently been sold to Freddie Mac, which meant we could no longer do a HAFA short sale, which was our first choice. But it was also good news in a way, because having Freddie Mac as the investor meant that this Nationstar short sale would not move to the auction process, which often can mess up things 10 ways from Sunday. We really dislike those Nationstar auction scenarios. Many delays and they never seem to work.
Freddie Mac asked for a slightly higher price and the buyer foolishly canceled. A month later, we found another buyer and went back into escrow. That buyer never deposited funds into escrow, for some reason. The seller gave the buyer a Notice to Perform and when the buyer failed to meet the terms, the seller canceled the buyer. It was during this negotiation with Freddie Mac when we discovered that although the sales price was fine, the net was not, which meant we had to reduce the amount the second lender would receive to meet the demand.
At this time, close to the end of September, we found our third buyer. This buyer was cash, fully vetted and invested in closing. The second lender let us know it needed to net more than our revised offer of $3,000. We added the small difference to the buyer’s contribution rather than raise the price, but the first lender rejected that idea, still we had to try to for the buyer’s sake. In the end, we added the difference to the sales price and everybody now seemed excited to close except, the day of closing, both banks rejected our final HUDs.
The new arm’s-length agreements that both banks produced allowed for a rent back from the seller, which is a new twist in short sales. Rent backs used to be prohibited. The sellers needed to rent for 30 days, had deposited funds into escrow and that’s what the banks objected to, primarily because the negotiators are not really trained in how to read HUDs. The Nationstar negotiator continued to insist that the rent was part of the proceeds, when it was a deposit from the seller.
Credits, debits, the process hurts their little heads.
Good thing this was a cash transaction, and we were not required to comply with RESPA, because we moved the rent deposit to a credit on the buyer’s side of the HUD. Both banks approved the HUD, with only 45 minutes left in the day to record. Which we met. Under the wire, successfully closed another Nationstar short sale.
Why Some Agents Hate Sacramento Short Sales
Agents are not always justified when they hate short sales.
Just because there is one bad apple in the bunch or an agent runs into a scheming short sale seller is no reason to decide that all Sacramento short sales are worthless and to not recommend short sales to their buyers — yet, there are many agents in Sacramento who do exactly that. There are agents who hate Sacramento short sales. An agent a while back told me he has listed 40 or 50 short sales. I thought, hmmm, I’ve never heard of him, and I looked up his production in MLS, which goes back to October of 2008. He’s listed and closed 24 short sales. At least I know what kind of agent I’m dealing with.
Some people do fuzzy math. Even so, that works out to about 3 1/2 short sales a year. Enough to know better. Not enough to know anything, though. His attitude seemed to be that short sale sellers are liars and cheats, and they try to squeeze every free day they can out of the lender without paying a mortgage. He tells his buyers to avoid short sales. I imagine lots of other agents tell their buyers the same untruths and perpetuate the same misperceptions. They harbor a lot of anger and they hate short sales.
My experience, on the other hand, has been incredibly the opposite. Since October of 2008, I’ve listed and closed 295 short sales. My total production exceeds 295 because I’ve been negotiating and closing short sales since late 2005. I have the dubious honor of being the top Sacramento short sale agent. But just to keep the numbers simple, let’s run with the 295, which is just my sellers, not my buyers. That breaks down to an average closing of almost one short sale a week for 7 years straight.
Never in all of my short sale experience have I had a seller refuse to cooperate. Only once did a seller elect to accept a bank’s offer of a loan modification (he later went to foreclosure). Yes, sometimes banks offer loan modifications when they realize the seller wants to short sale, but if that loan modification does not involve a principle reduction, it’s pretty much worthless, and most loan modifications do not.
Besides, I ask my sellers qualifying questions. We discuss what will happen during the short sale so there are no surprises. I generally collect all of my paperwork upfront, and we contact the bank at least twice a week. Nothing falls through the cracks. My sellers do not leave the home a giant mess when they move out. They clean it up. Because my sellers are conscientious, which is why they are doing a short sale in the first place and not walking away. There is no reason to hate Sacramento short sales.
A buyer’s agent needs to do a little homework on a short sale before suggesting the buyer write an offer. The agent should check out the track record of the listing agent. It’s easy to do, just put the agent’s ID into MLS, check the sold tab and click submit. Find out from the listing agent if the seller has some place to go, whether all the financials are collected, and exactly how long the negotiation might take. Don’t just throw your buyer into a situation that is likely to cause all of you heartache. True, not every short sale is a short sale. But the qualified short sales are and an agent should learn the difference.
If an agent tells a buyer to disregard a short sale that is perfect for that buyer and all but guaranteed to close, whose interest is that agent best serving? Some agents don’t want to wait for a paycheck. That’s the thing they don’t tell you. They want a 30-day closing so they can get paid in 30 days, and I say shame on those agents. That’s despicable.
Allowing Your Sacramento Short Sale Home to Become a Dump is Stupid
The only thing worse than not being able to show a home, from a Sacramento Realtor point of view, is when a buyer’s agent opens the door with an eager buyer in tow to discover the occupants of the home are slumped toward the TV, half-dressed on the sofa, slurping Big Gulps and chomping on Cheez-Its, slopping orangey bits everywhere. The zombies don’t even look up nor acknowledge there is another presence in the room. Stuff scattered everywhere, dog poop on the floor, not to mention flies buzzing the stack of dishes dumped into the kitchen sink. Not a pretty sight. And not an easy way to sell a short sale home in Sacramento.
Yet, we deal with these situations every day. Sometimes, Sacramento short sale sellers will rationalize the condition of the home by nodding: “it’s a short sale,” as though that explains it, and it doesn’t. Just because a home is a short sale does not mean the condition can go to hell in a hand basket. Because the bank will definitely still demand market value. And a buyer won’t offer market value when the house is in a shambles. Big disconnect. Huge problem.
Where is the dignity? You can sell your home as a short sale and still maintain your dignity. In fact, that’s the reason most people want to do a Sacramento short sale, because they want to sell with integrity intact. They prefer to witness a final solution and know that they are selling the home, not abandoning it.
If you want to abandon your home, then you might want to consider doing what so many before you have chosen to do and walk away from your home. Just let the home go to foreclosure. Let the bank deal with the repercussions. That’s sticking it to the bank and ruining your credit as well, but that’s a choice some people make.
Just don’t ask an agent to sell your home as a short sale to a precious buyer who is willing to wait 2 to 3 months for the bank to approve your short sale at market value while maintaining the home in a condition unfit for human habitation. The only entity you’re sticking it to in that situation is yourself.
