elk grove short sale

A Ditech Short Sale in Elk Grove That Seterus Tried to Hijack

ditech short sale

Green Tree short sales are now Ditech short sales and not any easier.

In case you don’t know, Green Tree short sales are no more, and the company name has changed to Ditech. I predict this is not the last Ditech short sale I will see. Many real estate agents in Sacramento discovered Ditech when their borrowers dumped our local lenders and opted in for a sparkly shiny new mortgage company they found online, which on many occasions could not perform. I personally recall having several transactions held up because the Ditech mortgage guys were not familiar with our local appraisers nor how we do business in Sacramento, and it caused complications. Hopefully they are better now, but I haven’t run into a mortgage through Ditech for years.

This is a story of a short sale in Elk Grove that has so many bizarre twists, I hardly know where to start, so I will start at the beginning. I listed this home in November of 2014 and it took us 4 months to get an offer anywhere near the comparable sales. We received 4 or 5 offers, all around 80% of market value, which banks don’t take. I’ve been selling short sales for 10 years and have closed more short sales than any other agent in a 7-county area of Sacramento. That makes me the top short sale Realtor for Sacramento. I don’t know if it’s the buyer’s agents or the buyers themselves who don’t understand how short sales work, but I’ve been doing it long enough that I know better than to throw lowball offers at the bank and hope they will stick.

One Sacramento agent even admitted that’s his method of operation. Throwing crap at the wall to see if it sticks. He says he always takes the first lowball and sends it to the bank and then when it’s rejected, he know how much the bank wants, so he changes the price and puts the home back on the market. That seems so defeatist to me. Why not do your homework that you’re trained and paid to do, figure out market value (based on condition) and sell the home ONCE? That makes a lot more sense, doesn’t it?

We sent the offer and HUD to the first lender, which was good old’ Seterus, and the investor was Fannie Mae. In reviewing the file now, I see we received the payoff from Seterus a few days after we received the short sale approval letter, although the payoff was dated the day prior to the approval letter. This tells me that Seterus knew how much it was owed. Instead, it sent a short sale approval letter for $100,000 more than its payoff. Seriously. If it was owed $155,000, for example, it approved the short sale by accepting $255,000. If this makes your head hurt, it’s because the first mortgage was NOT short. I guess Seterus just found a way to collect an additional $100K or they can’t read, and I’d hate to think they can’t read their own payoff statements.

The seller had owned this property for more than 15 years. There were many refinances and a subordination refinance in the public records. The seller hadn’t made a payment in so long that we had no mortgage statements, and although requested from Seterus, we did not receive the payoff until after the short sale approval was issued. There was no way we could have accurately predicted the payoff was so low as to not make this a short sale unless we prematurely paid for a prelim, which we don’t do, and even then, we still need the beneficiary statement.

We told Seterus no thank you to the short sale and proceeded with Green Tree, which held the second loan. It took Green Tree from February to the end of July to issue the approval letter and it bumped up the price by $10,000, during which time the company morphed into Ditech and this became a Ditech short sale. Then, the buyer’s appraisal came in $10,000 less, right where the price should have been in the first place, which was the price we had originally submitted. We spent another month obtaining a revised approval from Ditech.

The Elk Grove short sale closed this week. This has been almost a year of hell for the seller but we got it done. The buyer waited almost 9 months to buy this Elk Grove short sale. They could have had a baby in that time. This is another reason to only sell the home once and to sell it to a committed buyer, if at all possible. And a listing agent’s odds and seller’s odds are increased if the buyer is willing to pay market value.

In closing, it’s interesting to note that Green Tree was fined $63 million for abusing customers. The Consumer Financial Protection Bureau and the FTC went after Green Tree for its deceptive business practices and harassment of borrowers. No joke, some of those negotiators at Green Tree would scream at us over the phone and threaten to cancel the short sale if we didn’t drop what we were doing and send in documents. My clients hated Green Tree with a passion. And now, they are Ditech.


How Are These Sacramento Real Estate Things Still a Thing?

how is this thing still a thingMy experience of working with agents over the past 40 years shows that you can’t change a narcissistic real estate agent, no matter how much that agent might desire to change, if the agent is clueless. It’s generally cluelessness that causes a self-centered agent to say silly things. After all, agents are not immune to ignorance in any greater numbers than any other person in the world. It’s the bell curve distribution. You’ve got bad doctors, bad politicians, bad school teachers, bad law enforcement officials, and bad real estate agents, along with the good.

Some agent implied recently that she felt the REALTOR Code of Ethics is an over dramatization of the industry and appeared as though she preferred to pick and choose which Articles to adhere to and ignore the rest. Because this agent must operate in a vacuum, dancing alone to tunes in her head that only she can hear. Or, perhaps she is not a REALTOR because only REALTORS must adapt the REALTOR Code of Ethics. You can’t change agents like that. They don’t want education. How is it that some agents are not a REALTOR? How is that still a thing?

Earlier this week another agent said she was not submitting an offer for her buyers on a short sale listing because we would make her promise to stop writing offers for that buyer. Duh. It’s a good thing we avoided getting tangled up with that disaster, but how is this type of ignorance still a thing? After 10 years of Sacramento short sales, how are real estate agents still under the goofy impression that it’s a worthwhile endeavor to write a bunch of offers for a buyer when a buyer can purchase only one home? It’s a waste of time for everybody involved, including the buyer’s agent. And it’s considered against the law.

Let’s see, Ms. Shit for Brains . . . you want to write an offer on an Elk Grove short sale but you don’t want to commit to waiting for short sale approval? You want us to accept your buyer’s offer, remove the home from the market, submit the entire short sale package to the bank, advise you weekly on our activities, negotiate the short sale, resubmit endless financials and, after 8 to 12 weeks, while the foreclosure doomsday clock is still ticking for our sellers, finally produce a short sale approval letter only for your buyer to announce that she has purchased a different home?

You want to waste the time of all of these dedicated people: the Sacramento listing agent, her team members, transaction coordinator, escrow officer, title officer, the buyer’s lender and the sellers’ entire extended family on the off-chance that maybe your buyer will elect to perform at the 11th hour? What are you thinking? Where is your head? How is this still a thing?

Granted, some agents list short sales that they should not be listing because they did not qualify the sellers for the short sale or it’s priced inappropriately or they are using a third-party vendor for negotiation, but that’s not the case with this Sacramento Realtor. I have closed more short sales since 2006 than any other agent in a 7-county area. My short sales close. That’s because we choose to go into escrow with strong buyers who are committed to closing, and because it’s doubtful you will find a more qualified Realtor in Sacramento to negotiate your short sale.

But, seriously, after all these years, how is this attitude toward short sales still a thing?

Story of Selling a Damaged House in Elk Grove

The damaged house in Elk Grove was not this bad.

The damaged house in Elk Grove was not this bad.

There seems to be a lot of rehab investors, both in town and outside of Sacramento, who expect advance phone calls from listing agents, because they email me all the time about buying a damaged house. The worse, the better, they say. I wonder if they haven’t heard about MLS? You know, that place where all the listings go? Or, maybe they haven’t noticed that Zillow and Trulia are also pulling listings from MLS? Or, perhaps they think my supposed greedy little heart will seize the chance to smash my seller’s hopes and I’ll engage in some secret, behind-the-scenes deal with them to be the only buyer because all agents are money-grubbing fools? I’d say gag me but I’m recovering from the flu and don’t want to think about that reflex.

Take this damaged house in Elk Grove, for example. This was a short sale home that had been abandoned for a while — what we call a fixer. There were no utilities and, in fact, there were utility liens recorded against the property. It needed flooring, paint, a new roof, pest work, stucco repair and there was a minor plumbing leak in one of the upstairs’ bathrooms. The home was located in a popular neighborhood in Elk Grove. Even though it needed work, which meant few owner occupants would make an offer, it should have sold sooner than it did. The reason it didn’t is many rehab investors don’t want to go back to the old market of years gone by, it seems, they expect higher profit margins. Higher profit margins are typically not available in a short sale. Short sale banks typically won’t fund an investor’s bank account.

We put this on the market last May, and it sat for 3 months without a viable offer. We received a number of lowball offers but none high enough to where the comparable sales suggested the bank would accept the offer. See, guys don’t understand why we won’t take a low offer and send it to the bank. That’s because they’re not on the listing side, doing possibly a ton of work for zero results. I’m not completely alien to fixing up homes and flipping, as I did it myself for 10 years. I also know how to compute comparable sales and deduct for repairs.

Come August, we decided to take the highest offer we could get, which wasn’t enough to satisfy what we felt the bank would want, but since it involved a 203K loan, the buyer had room to move up, if necessary. It’s one thing if they pay cash and the bank wants more money. It’s quite another if the buyer plans to live there and is obtaining financing, so a $10,000 increase could mean a difference of only fifty bucks in a mortgage payment. Not surprising, the bank asked for a higher price, it demanded our original list price. See, I’m often right on the nose with how they think because I’ve been doing this for so long.

The buyer bailed. Fortunately, we found other buyers, several at one time. The seller chose the most committed buyer. I went back to the bank and negotiated a price somewhere between the lowball offer and the original list price. I know these are trouble, walking into these listings. It’s hard to show homes without electricity. It’s hard to get a loan without utilities. It’s almost impossible to get the bank to agree to allow payment of utility liens. And people are often afraid of abandoned homes with damage. These homes appeal to a small majority. Not to mention, the lowballers come crawling out of the woodwork looking for a steal, and it makes me feel like I should put on white socks so I can see the fleas jumping on me.

Throw on top of these situations, other individuals in title who won’t cooperate with a short sale, and a seller whose second mortgage was charged off but not reconveyed and therefore included in the short sale, all of which makes it a recipe for a whopping fun time.

Yet, it closed. They all eventually close. Because this Sacramento Realtor does not give up. If I can close a horrendous situation like this, imagine what I do with a beautiful home in Elk Grove that’s in pristine condition.

Replacing Drain Waste Pipes Under the House in Land Park

Sewer InspectionsOur home was built in 1948, and we live in an older community of homes in Land Park, Sacramento, the neighborhood of the famous Orangeburg sewer lines. Why in the world anybody would ever have thought it was a good idea to use tarpaper for a sewer line is beyond me. It was after the wars and a few years before I was born; at a time I imagine the country was under economic recovery and reeling from the then-pressing Korean War, but still. People, where were your heads? When we bought our home, the previous owners gave us photographs of the sewer line replacement in 2000. It was done by Trenchless, and it wasn’t a trenchless sewer line. It was a whole new sewer line.

On top of this, during our subsequent kitchen and bath remodels, we replaced our horizontal water pipes with copper. It never occurred to us that we could have problems with the cast iron drain waste pipes under our house. My husband was certain our washing machine line was plugged because a few weeks ago the water from our washer backed up into our kitchen sink. Then our shower began backing up. My husband poured Drano down the shower drain, which worked, but that is the lowest drain in the house, and should easily drain. Moreover, nobody should ever really use Drano. It is not a safe product for your drains.

Something was not right.

Being a Sacramento Realtor, I realize the value of sewer inspections, and we routinely advise our buyers to request plumbing inspections of varying sorts. I am familiar with sewer line inspections, too, and called Trenchless to come over. They’ve always done a good job for my clients, although they no longer provide the service as a pre-inspection for real estate agents. They’re right down the street on Broadway, and Max enjoys a pretty good reputation among my peers. He looked at my photos and identified the sewer clean-out. Good thing I had saved the photos. Hooray for Polaroid.

My husband did not really understand why I was so gung ho on doing a sewer inspection, but now I am very glad that we did. First, we discovered the doofus guy who poured the cement for our driveway covered up our sewer clean-out. He installed a cap over the sewer clean-out but he missed it by about a foot. Now we have to chop up part of our concrete work to dig out the old clean-out. Thanks, doofus cement dude. Thanks for walking around in the wet cement, too, and leaving your big fat ugly footprints, you moron.

We are also replacing 40 feet of the corroded and rusted cast-iron drain waste pipes under the house up to where it meets the new sewer line. I had a closing yesterday for a short sale home in Elk Grove, but that commission check is going to Trenchless, so it’s not like I made any money yesterday. I worked on the sale of that short sale since last April. Poof. Gone. Such is the life of a Sacramento Realtor.

Story of an Elk Grove Short Sale With Nationstar Auction

short sale and sold real estate signThis is an interesting allegory of an Elk Grove short sale that survived two auctions directed by Nationstar. First, let me say that the very nature of short sales can sometimes mean the listing agent will be forced to sell that home 2 or 3 times. The reason for multiple resales has nothing to do with the negotiations, sellers or listing agent. It is almost always caused by the buyers. They flake out. Cold feet. Change their minds. Find something else. Move away. Lose jobs. Indigestion. Whatever.

The first time I sold this home in Elk Grove, it was to a buyer who also had a home to sell and wanted to present a contingent offer. While there are ways to accomplish this feat, a contingent offer is not always your best bet because, if short sale banks catch wind, they tend to reject those arrangements. A smart Sacramento short sale agent realizes this. The agent found a buyer for the buyer’s home almost immediately, and this buyer entered into contract to buy the Elk Grove short sale.

Nationstar could not bring the home to auction for more than 3 months. Much of that time was spent arguing about the health of the sellers, which was dire, and their ability to survive that sort of thing. In the past, we’ve been successful with a strong defense against the Nationstar auction and could opt out, but not this time. We also had to escalate the short sale several times because of non-action on the part of Nationstar.

The buyer registered for the Nationstar auction, even though the buyer was under contract, because the buyer was worried about losing the home. Another buyer would need to pay a 5% premium to Nationstar, but a buyer under contract is exempt, so this buyer had nothing to lose by registering. Except by the time the auction rolled around, the buyer grew more anxious and nervous. Near the end of the auction period, Nationstar, we suspect, submitted a shill bid. This is a phony bid designed to encourage panic in the original buyer and result in a higher price. Until recently, this was a legal practice on behalf of Nationstar.

The shill bid by Nationstar caused the buyer to push up the price another 3% or so. The auction ended and our buyer won. We received short sale approval within a week. Shortly after entering escrow, the buyer canceled. Something about realizing the roof had to be replaced, which was always an existing issue and made clear. The buyer who was purchasing that buyer’s home was devastated and crushed because now that sale fell apart. We put the home back on the market.

See, the thing is this home was priced about $100K under its value, maybe more. It was in line with the comparable sales, which was how we could get it approved by the bank, but its actual value was considerably more. The neighborhood is high demand. End of a cul de sac, too, which is always a premium in Elk Grove. Sometimes I get these kinds of listings, but the pricing is typically geared toward what the bank will accept, which needs to match the comps.

Sure enough, an astute real estate agent came along who recognized this excellent value and put in an offer at list price for a cash investor client. While this happened, we also received a bunch of lowball offers from idiots. I don’t know why comps aren’t run at times but these are the guys whose M.O. is to throw offers at the wall to see what sticks. They don’t do their homework, so they miss out on good deals by just lowballing whatever the price seems to be.

Second time around with Nationstar took a month longer than the first time, and there was no argument about the auction. Nationstar held the auction and nobody bid. The buyer did not register for the auction. We were informed that because the buyer did not register nor bid, the short sale would start over and we would not receive an approval letter a few days later like we did the last time. Buyers should be aware that this happens. It takes longer for approval, so my suggestion is to register and bid, at a minimum, your purchase price contract amount to speed up the approval process.

On top of this, at the last minute, Nationstar decided to offer considerably less to the second lender, Bank of America, and the second bank would not budge from its demand. Bank of America said no to the offer. Ordinarily, in these situations, there are ways to bring the banks to an understanding. However, that procedure involved a lot more time and the sellers had already found a place to move. Anybody who knows me well knows my compassion but I am also astute. I don’t give away my paycheck. I work too hard. It is very rare for me to kick in cash to close a transaction, but every once in a blue moon it makes perfect sense, especially when the clients’ needs take precedence.

Many people don’t know it is against the Code of Ethics to ask a buyer’s agent to reduce the selling end commission. Yet, there are also ways to encourage a buyer’s agent to participate in a cash contribution without directly asking the agent to do it, but I decided just to pay the difference myself. It was expensive but worth it for my clients. Both of the banks allowed this hijacking. I absolutely will not pay a guy’s child support, however; and I’ve been asked, if you can believe it. But these sellers were unlikely to find another place to move that met their specific needs, the negotiator at Nationstar was not very cooperative and sometimes vanished for days, and this needed to end. It was in my power to make it end. So, I did.

Ten months of hell. Over. Clients: extremely grateful. That’s the silver lining.

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