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The Story of Closing the Northstead Short Sale in Natomas
The beginning of the story of closing the Northstead short sale in Natomas goes back to last summer. I received a frantic call from the mother of the owner (a veteran) of this home. Recently discharged from the military for medical reasons, the veteran’s mother held power of attorney to sell his house. Both mother and son lived in South Dakota. When the seller bought this home originally, his wife executed an interspousal transfer deed, and she moved into the home with their children.
What foresight, though. Like he almost knew the relationship would not last. The interspousal transfer deed meant the wife could not claim any community interest in the property. Ever.
Somewhere along the line, the two separated. Then, in the fall of 2016, the wife abandoned the property and allegedly stole all of the appliances. She left behind a lot of furniture and trash littered the floors. Somebody had punched a hole in an interior door. Still, the condition of the home appeared to be pretty good. Not to mention, when the seller bought the home, he used his VA eligibility, which meant it had to pass VA inspections and clear pest.
Nobody had any keys. So I called a locksmith and paid to have new keys made. We put this on the market as a regular sale with a buyer credit just to test whether the market would bear it. The answer to that was negative. The home was located across from a school, a bad location. No FHA buyers wanted to deal with no appliances and a trashed house.
OK, this was a short sale, and that typically means a long time in inventory. Reason, fewer and fewer buyers possess the patience anymore to wait for short sale approval. Between buying a home that can close in 30 days and another that could take 3 months, buyers tend to lose patience and steam halfway through.
Sure enough, we entered into 3 escrows that canceled. Which meant I sold this home 4 times, eventually to the buyer who made it to the closing of the Northstead short sale. Yes, yes, yes, we will wait, their earnest little faces cried out. But they failed. The third buyers refused to increase their loan by $5,000 to meet the minimum net requirements of the bank. It would have meant an increased payment of maybe 30 bucks.
I don’t argue with these kinds of people, better to just get them out of our hair and go on with a new buyer who will close. This is what closing so many short sales like I do can do to an agent. Makes her much more pragmatic and practical. Some call it hard-nosed. Don’t take no shit. Because the short sale in itself is enough shit for one day. Including the soon-to-be ex-wife calling to proclaim this would never close.
Still, I press on and do short sales because there is such a need. I consider it my pro bono work. I don’t make that much from them and short sales require excessive time on my part.
We went into our 4th escrow the second week of January with an investor. Normally I do not like to sell short sales to investors because they rarely will accommodate the bank’s wishes. They believe, for some odd reason, that banks are desperate and will give them a break, when banks won’t. Also, if the next shiny thing catches their eye, they’re gone. But this investor held in there.
He was a bit confused, I heard, about why he had to pay delinquent utilities, but those liens were attached to the property since his offer. Perhaps he held higher hopes the bank would pay it, but banks rarely do that. At the last minute, the bank also slammed the buyer with payment of the entire escrow fee, too. However, we still managed a successful closing of the Northstead short sale on Monday.
I do not quit. If there is a way to close that short sale, you can bet your booties I will do it.
3146 Northstead Drive, Sacramento, CA 95833 closed escrow 3/26/18 at $255K.
One Year to Close Chase FHA Short Sale in Carmichael
Chase FHA short sale in Carmichael closed 12 months from listing.
Whose problem is it when a Chase FHA short sale takes more than a year to close escrow? I get so many calls from home buyers wondering why is that Carmichael short sale still for sale month after month, and I feel like telling them to go look in the mirror. Yet, this home I only sold 3 times, so that’s about right, on average it works out to about 4 months for each buyer. I am one of the few agents in Sacramento who will handle a short sale, which is why I have sold more short sales than anybody over the past 10 years.
That’s because I don’t need it to close in 30 days or 60 days to pay my bills, like some agents. If the lender messes up, I can fix it; plus, I’ll still stay dedicated to the transaction. I don’t bail when the going gets rough. If the buyer cancels, I’ll find another buyer. I don’t give up. I don’t take no for an answer. There is always a way to close a transaction, even a Chase FHA short sale.
We listed this home a year ago. Got a buyer, all documents submitted to the lender right away, and we received the Approval to Participate in the FHA short sale program in record time. Things were looking up. We postponed the trustee’s auction a couple of times and were on the verge of getting the approval letter when the buyer suddenly canceled after 6 weeks. And that’s when the file started to go head downhill.
Sold again immediately to a set of investors represented by their mother, a real estate agent. We burned through 5 negotiators for this Chase FHA short sale when things became very twisted and convoluted. Just as we were about to receive approval, the negotiator at Chase realized the buyer’s agent was related to the buyer and she denied the file. The solution, of course, was for the buyer to be represented by another agent, but the mother said no way, Jose. If I can’t get paid, we’re not closing.
Yeah, way to win Mother of the Year award.
The buyers canceled and we found new buyers and put them into escrow. Submitted all of the paperwork. Then, for some unknown reason out of the blue, Chase decided to approve the first set of buyers as long as the mother substituted a new buyer’s agent. The mother finally gave in, hired another agent, unwound the cancellation and we got approval. Eureka. The poor buyers whose offer we submitted was ignored by Chase. How do you like those apples? Chase approved the wrong file.
We moved through the home inspection and were getting ready to close when the investor buyers and their mom for unknown reasons abruptly canceled. Maybe their mother found them a deal she could get paid more on? Stranger things have happened. I went back to the second set of buyers who were shoved aside by Chase to ask if they were still interested. Their agent said far as he was concerned, they are still in contract. So we moved ahead with them.
Just as we were ready to fund, the negotiator at Chase noticed the buyer’s lender and the buyer’s agent had the same address. So he denied the closing. Conflict, he said. Chase gave the impression it did not want to approve the short sale, but I knew they would. The bank was just inept. So the buyers hired a new buyer’s agent and prepared again to close. This time the negotiator objected to the seller signing on the wrong line and asked to have the arm’s length resigned.
But you know, it closed yesterday. At the 11th hour. Just before the expiration. It closed at the same price we started at a year ago. So when you see a short sale has been on the market for a long time, this is probably what’s going on. If you need a Chase FHA short sale to sell, I’m the Sacramento Realtor who can get it done. Call Elizabeth Weintraub at 916.233.6759.
How a Sacramento Short Sale Goes to Foreclosure
The failure of a Sacramento short sale is often attributed to one party.
If a Sacramento short sale goes to foreclosure, odds are it is not the bank’s fault, like most people believe. When you spot that sign falling over in the yard of a short sale because that sign has been there for a year or longer, it’s probably not the bank that is keeping the sale from going through. Sure, there are situations in which banks swap out negotiators like flicking dead fleas off a dog, and that can delay the short sale process, but most of the time, it is not the bank.
The reason a Sacramento short sale goes to foreclosure is typically not the seller’s fault, either. Responsible sellers choose to do a short sale over a foreclosure because they want to do what is best for their family. I can think of zero situations in which a foreclosure beats a short sale for a homeowner. Foreclosures more severely affect credit ratings and hamper a person’s ability to buy another home.
Also, it is not the Sacramento short sale agent who is to blame, either. Although there are cases I’ve seen in which the seller was never qualified by the agent prior to taking the listing. Some agents think a short sale is easy: just list it, find a buyer and hire out a third-party negotiator, and magical fairy dust will get it closed — while that approach seems to be a recipe for disaster. If a seller has hired an experienced short sale agent who has closed hundreds of short sales, her short sale is likely to close.
So who is left in this scenario, you might ask? Out of the remaining parties to the transaction: title, escrow, buyer’s agent, mortgage lender and buyers, there are a few possible guilty individuals. Logic dictates we remove title and escrow because they carry zero culpability. That leaves us with a buyer’s agent, buyers and / or mortgage lender. Ultimately, however, it is the buyers who hire the mortgage lender and buyer’s agent, so I directly point the finger at the buyers and hope they don’t nip my nail polish like some rabid dog.
What are the buyers’ problems? They often can’t qualify for a loan, when the rubber meets the road, because their preapproval letters are meaningless. They don’t have the money, or they once had the money and spent it because they forgot they were buying a house. They have a foreclosure on their own record and can’t get a loan. Somebody lost a job. Or somebody never had a job to start with. They never really intended to buy the house. They found another property they like better, bailed and spaced out informing anyone.
Whatever. Nine times out of 10, when a short sale goes to foreclosure, it’s because of the buyers. The California Homeowner Bill of Rights law does not stop a foreclosure while a short sale is underway. Banks file a Notice of Default after a few months of non-payment and the process does not stop. The only way (prior to January of 2018) to stop a foreclosure is to receive a short sale approval letter. If the buyers can’t close, though, the short sale goes to foreclosure because there is generally not enough time left between the trustee’s auction and the new offer to prevent it.
This is why we put so much emphasis on the buyer’s agent committing and promising to not show any more homes to the buyer. This is why we call the mortgage lenders to verify they have run a credit report and taken a loan application before whipping out that letter. This is why we ask buyers to wait at least 90 days for approval, to deposit funds into escrow and to behave like a buyer should. Even so, ever so rarely, the buyers flake.
And it breaks my heart. I would not be surprised to see foreclosed-upon sellers take buyers to Sacramento Small Claims Court. To seek retribution. Especially if the sellers lose a $10,000 HAFA relocation allowance due to the buyers’ direct failure to perform. Small Claims Court allows $10,000 judgments, where judicial decisions can be based on extenuating circumstances.
