Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

As the number of foreclosures on the market in Sacramento continue to fall, banks are becomingly more demanding. It's not enough that they may want to see copies of the buyer's bank statements, a large earnest money deposit, a direct lender letter (which means some borrowers have to qualify twice) and proof of eye color before they'll look at an offer on a bank-owned home, but some reo lenders are insisting that the buyer's earnest money deposit become non-refundable upon offer acceptance.

Since turnaround time can be excruciatingly slow in many cases, that time lag can give a buyer the chance to quickly run over and conduct a home inspection, providing one can find a home inspector who will drop everything to do it.

The company I work for, Lyon Real Estate, has decided it will no longer collect earnest money deposits to place into trust on bank-owned homes. And that's a relief on several levels. First, banks routinely want to increase the deposit. For example, last week a first-time home buyer wrote an earnest money deposit for $3,000 on an under $200K home. The bank countered and insisted on a $5,000 earnest money deposit.

When the offer was accepted, the bank then directed the buyer to make a new earnest money deposit payable to XYZ escrow company in southern California. Which delights me to no end because escrows are handled differently in southern California than in northern California. I know this first hand because 30 years ago I was an escrow officer in southern California. The bank requested the new check late on Friday, which meant I had to FedEx the earnest money deposit on Saturday for a Monday delivery. But we got it there.

Yesterday, the buyer asked me why her bank charged her a fee for non-sufficient funds. She honestly did not realize that escrow would cash her check. She thought escrow would hold it until closing!  Although I had initially explained that her check would be held until offer acceptance, this buyer did not understand that upon offer acceptance it would be cashed -- because I didn't spell it out.

Which just goes to show that we, as agents, can rarely go wrong by taking nothing for granted.

Fortunately, she is able to wire the funds today.

The Short Sale Savior, by Elizabeth Weintraub, coming soon to a bookstore near you.

Photo: Big Stock Photo

Some short sale lenders are demanding unsecured promissory notes as a seller contribution to the short sale. Over the past few months, I've witnessed an uptick in this type of activity, specifically from such lenders as Countrywide and Bank of America. I've also received a lot of email from readers about the increase in this practice.

Three of my Sacramento short sales are in this position at the moment. Lenders are examining sellers' credit and cash flow very closely and, if the seller has good credit coupled with disposable income, the lenders are refusing to let the seller skate.

Fortunately, in California, most of the foreclosures are conducted through a trustee's sale, which means first loans that are purchase money are exempt from a deficiency judgment in a trustee's sale. Sellers who refuse to negotiate the unsecured promissory note may elect to go through foreclosure instead and deal with the fall-out and consequences as long as they won't have to pay the lender back. But this might not be the best choice in all situations.

In 3 of my recent short sales, the promissory notes are typically about $10,000 or less on a $150,000 or so debt forgiveness. They are interest free, payable at such rates as $85 a month for 10 years. If paid on time, we negotiate that they are not to be reported to the credit bureaus. For some sellers, that's a small price to pay to do the short sale, especially if the sellers are current on their payments. Being current may qualify a seller to immediately purchase another home under Fannie Mae guidelines.

Moreover, realize that the banks may sell those unsecured promissory notes to a third party after escrow closes. This third party will pay a discount and not "cash value" for the note. If the note is sold, sellers might want to contact the third party to negotiate a further discounted payoff in cash. I'm hearing that some of these notes are sold for 10 to 50 cents on the dollar. That would mean an investor might pay $1,000 to $5,000 for that $10,000 note and may be willing to take a few grand above that for payment in cash.

Something to consider if you're thinking about doing a short sale. If you're a short sale listing agent, prepare your client for this possibility.

The Short Sale Savior, by Elizabeth Weintraub, coming soon to a bookstore near you.

Photo: Elizabeth Weintraub

Almost every day a Trulia user posts a question in the Q&A section about a RealtyTrac home that isn't for sale. That's because RealtyTrac lists homes on Trulia that have received a foreclosure notice, which means the owners have fallen behind on their payments. It doesn't mean the home is on the market. With any luck, the Sacramento Metrolist MLS, which is a separate company from the Sacramento Board of REALTORS®, will put a stop to that practice.

A little birdie told me that Metrolist is finalizing a deal with Trulia to send listings directly to Trulia and that Trulia will no longer accept feeds from outside sources. Concerned that this new arrangement may affect our Lyon Real Estate branded listings on Trulia, I asked the PTB (powers that be) about it yesterday and was assured that our Lyon listings will not be affected by this. Which is great news.

For the public, however, this is phenomenal news. It would mean Sacramento home buyers and sellers will have access to every listing in MLS in one place, information that was previously privy only to real estate agents. True, they can now search on the Sacramento Bee's web site, but that information is managed in a different manner. The Trulia site offers Sacramento home buyers a larger mix of data and information already.

It makes me wonder, though, how many other MLS companies across the U.S. are working out a similar arrangement with Trulia? I suspect Sacramento is not alone in this venture. I may have my finger on the pulse of real estate activity in Sacramento, but I don't know what is going on in other parts of the country. It would make sense for Trulia to feature all multiple listing service properties in America.

This move is likely to make Trulia a giant.

The Short Sale Savior, by Elizabeth Weintraub, coming soon to a bookstore near you.

Photo: Big Stock Photo

A reader from my homebuying forum on About.com asked me why there isn't more transparency in real estate. This buyer was in escrow on a short sale when the seller received another offer from an all-cash buyer. That second buyer offered to sell the home to the first set of buyers at a higher price. The reader put the blame of the housing bubble on agents pushing multiple offers that drove up prices, and implied that listing and selling agents are working together behind the scenes, devising secret plans to get higher prices so the agents can earn more money.

In all fairness, I can see how consumers might believe that, but it's not really true. As I pointed out to that reader, a $10,000 increase in price means the agent might pocket another 100 to 200 bucks. To somebody who earns $15 an hour, that might seem plausible. But to an agent who earns thousands on a transaction, it's not an incentive.

Second, I don't care how long a home has languished on the market, there's a mysterious rule in real estate that says the minute a buyer wants to write an offer on that passed-over house, so will another. I have witnessed this phenomenon over and over.

I believe the reason is buyers aren't always all that different from each other. Many home buyers are looking in the same price ranges and in the same neighborhoods at the same time. Where I work in Sacramento, a buyer who wants to look at homes in Land Park may also want to consider homes in East Sacramento or Midtown or Curtis Park. Especially first-time home buyers who can't exceed a certain price point.

In areas of falling inventory such as Sacramento, home buyers may find themselves becoming increasingly desperate to find that right home. It's not unusual for buyers to compromise on their lists of wants and needs, either. When we have many buyers out looking at homes, the odds that two buyers will want the same home are extremely high.

That's why I tell my buyers: When you find a home you want, don't sleep on it; don't ask Tom, Dick and Harry what they think about it; examine the comparable sales and immediately make an offer. Then cross your fingers and hope that another buyer doesn't beat you to it.

The Short Sale Savior, by Elizabeth Weintraub, coming soon to a bookstore near you.

Photo: Big Stock Photo

I received a very disturbing email from an agent I'm in escrow with. Her husband threw her a 30th birthday party at The MoMo Lounge, a block away from my midtown Lyon real estate office at 27th and J Streets. According to my friend, her husband was assured there would be security provided for this very important and private party.

In the middle of this special occasion over the weekend, the agent saw three people she did not know standing by the handbags. She walked over to question them, asking if they were friends of her husband. The man spat in her face, then punched her in face and he pushed her to the ground. Then his two female companions held her on the ground, pulled out huge chunks of her hair, while the man continued to kick and stomp on her.

Please be careful if you plan private parties with public access in Midtown. And please, get a guarantee on security. This is so dreadful, I hardly know what to say about it except that I am feeling very worried and anxious about this agent. Fortunately, she went to see her family physician. She has bruises, is sore and has a mild concussion. The victim's husband is distraught and blaming himself because security was not in force.

She's filing a police report today. Crime can happen anywhere. Not just in Midtown.

The Short Sale Savior, by Elizabeth Weintraub, coming soon to a bookstore near you.

Ever since the 1980s, I've been dining on sushi and sashimi at least once a week or so. I'm like an addict who needs a fix. After a week without sushi, I begin to feel a strong craving for raw fish. I don't want to turn into a walking thermometer like Jeremy Piven, but if I find hamachi in the vicinity of my mouth, in it goes.

A Japanese restaurant opened in Sacramento a couple years ago down Freeport, just south of Sutterville from Land Park called Akebono II. I think the first Akebono is in Granite Bay. It's a strange location for such a wonderful restaurant. The place is sandwiched between Rite Aid and Hollywood Video on the west side of Freeport, next to where Filco's used to be (I think) and a stone's throw from Raley's. Not your ideal setting, but what the hey.

The food is superb. It's a bit more expensive than, say, Sushi Cafe or Ricksha, but the fish seems fresher, lighter, cut with precise care, and the presentation is lovely.

I ordered the sushi and sashimi lunch box for $12.95. First course, of course, was miso soup dotted with tofu, which lets me play with my chopsticks while I'm waiting for the soup to cool down. I always pick out all the tofu and eat it before I drink the soup. Our waitress was friendly, efficient and fast. When I asked if I could take a photo of the sushi bar, her eyes light up, and she said, "Is this for your web page?" Then she told the sushi chefs to smile as I snapped away.

My husband requested ramen with pork and mushrooms. The bowl arrived, as big as your head, filled with plump chewy noodles and plenty of steam. I tasted the broth, which was rich and satisfying, as though it had been simmering all day, and perhaps it had.

Usually the place is packed, but yesterday there weren't very many diners there. I hope it was the weather that kept people away and not the downturn in the economy. Maybe they were watching football. Which reminds me, the big screen TVs on the walls were picking up a satellite show of Sumo wrestlers, dressed, naturally, in loincloths. I've never given much thought about sumo wrestling, but even without sound, the show was fascinating. I found myself glancing up to watch the matches, which didn't last more than a minute, wondering what would happen if one of their thongs slid the wrong way.

Just the program to watch while dipping my tuna in wasabi and soy sauce. I highly recommend Akebono II. I give it five stars for food, quality, service but 3 for location and ambiance. If you go there, you'll most likely agree that the sushi is the best in Sacramento.

The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you.

Photos: Elizabeth Weintraub, Sacramento Real Estate Broker

A drawback to being a short sale listing agent in Sacramento is the fact that the inventory stays on the market a minimum of three months before closing, which means my lockboxes can't be reassigned every 6 to 8 weeks. In a faster selling market, an agent can take 20 listings and use 10 lockboxes, because as they sell, lockboxes can be removed and reassigned to another home. Not so with short sale listings.

I had no choice yesterday but to sit in the slow moving traffic on Business 80 crossing the American River and hope I could make it in time to the Sacramento Board of REALTORS® store. As I inched along, staring at the back of a Toyota pickup -- I really dislike having the butt-end of SUVs and pickup trucks slammed up in my face -- I wondered what I would do if, when I got to the store, all the lockboxes were gone. I tried to find used lockboxes among the agents at my Lyon office in Midtown, but nobody had any extras to sell.

How do those REO agents do it? Some list more than 100 foreclosure homes, and each must, according to board rules, have a Supra lockbox. Those things cost $115 each, and Metrolist doesn't give discounts for buying in bulk. Those agents spend more than $10,000 on lockbox inventory. That thought made me feel better about the cost of those lockboxes.

I finally arrived at the REALTOR® store 40 minutes later. Just as I yanked open the door and entered the store, my phone rang. I went back into the parking lot. It was the seller of one of my short sale listings. He wanted to know why several buyer's agents who showed his home thought it had a pool. Oh, yeah. His next-door neighbor has a pool, and I had included a photograph on MLS, which showed that view from his balcony. I was very impressed by the beautiful landscaping, pool and spa. It gave one a feeling of being on vacation, surrounded by palm trees and water features.

Of course, I noted in the caption that the photo captured the yard next door. Just for giggles, I added that if the new buyers got to know those neighbors, maybe the neighbors would let them use their pool and spa. And if not, it was a nice view, regardless.

You know what's coming next, right? The next-door neighbor had called me the day the listing went into MLS. She was furious. She was "appalled" that I would suggest she would let anybody use her pool and spa. She doesn't know my sellers and, in fact, doesn't care to. I listened to her rant for a while, wondering if I should tell her that Google has placed a photograph of her back yard online. It also occurred to me that because the homes in this subdivision were built about 4 to 5 years ago, unless every home owner put down substantial amounts of cash, most are upside down right now, mortgage-wise.

Perhaps this was what pushed that neighbor over the edge? You'd think she'd be more concerned about her equity position, but to keep the peace, I promised her I would remove the photograph from MLS. I don't need the neighbor feeling resentful toward me nor my seller. And I shared this story with my seller. Yup, the photograph in MLS was gone, so now agents can't get confused because they don't read the captions. Problem solved.

I walked back into the real estate store. Ordered my lockboxes and stood at the front desk, pondering a rather large sign on the cash register. It informed customers that the clerks cannot offer proper assistance if customers are talking on their cell phones. As I waited, a guy strolled in the store, yakking his fool head off on his cell. He stood about 3 feet away from me. Yak. Yak. Yak.  I caught the eye of the clerk and said, "I don't think that guy read your sign."

"They don't care," she shrugged. "None of them care." What's worse, she says, is when she's ringing up a sale for an agent and the agent answers his phone. Then agents stand at the cash register talking on their cell while other agents are lined up behind, she complained, inferring that real estate agents are a rude lot.

For once I was glad that I had walked outside to take my phone call.

The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you.

Photograph: Pool at Cabo San Lucas and not a short sale listing, by Elizabeth Weintraub

The president of the Land Park Community Association described in an email the "turbulent beginning" of the LPCA meeting held last Wednesday. She reported "tedious discussion" and much "interruption," concluding that the rival group within LPCA was trying to "take over the community forum agenda," adding that residents of Land Park supported following her initial agenda.

The Land Park Community Association will hold an Emergency LPCA meeting this Sunday, January 25, 7 PM, at the Eskaton Monroe Lodge on Freeport in Land Park to discuss petitions for bylaw amendments.

I wish somebody would videotape this and put it on YouTube.

The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you in February.

Photo: Elizabeth Weintraub, Land Park, Sacramento

Sacramento's real estate market -- Is it a buyer's market or a seller's market? -- a client asked yesterday. The answer is, for those buying short sales and foreclosures, it's a buyer's market behaving like a seller's market. That's because inventory is low, which is one of the signs of a seller's market. On the other hand, prices have declined, which is one of the signs of a buyer's market.

Sales are rising, which is a sign of a seller's market. But the homes that are selling are mostly foreclosures and short sales, which is a sign of a buyer's market. Are you with me so far?

Throw into the mix low interest rates in the range of 4.5% to 5.5%, and you've got a lot of buyers vying for the same inventory, which results in multiple offers, especially when that inventory is superficially priced way below comparable sales.

Every deal is different. Depending on the circumstances -- which can vary from the bank wanting only the highest and best offer to banks who want to see every offer or only those offers within a specific time frame, to agents who sandbag offers to agents who try to double-end their own transactions, to clueless agents, clueless sellers and clueless buyers, the combination possibilities are too many for me to type this morning -- trying to buy a home is like entering a war zone.

A home buyer's best defense is to hire a knowledgeable agent with REO / short sale experience. This is not the time to hire your Cousin Louie to help you out.

Hiring Cousin Louie is like throwing a live mouse into a snake pit. Sacramento home buyers -- if you find yourselves writing offer after offer and all those offers are rejected, I can almost guarantee you that you're not working with an experienced short sale / reo buyer's agent. It might be time for a change.

I wonder about this because when my buyer's offers are accepted, it often means that 12 or so competing buyer's offers were rejected. That's a dozen home buyers and investors who are told no. Where do those buyers go? Who ends up helping them buy a home or do they simply give up?

The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you in February.

Photo: Big Stock Photo

Every real estate agent in Sacramento is aware that the market is red-hot for buyers and multiple offers are the norm, unless they're at the movies with their kids mostly every day like one agent admitted to me. Which means in some cases, it's better to be a listing agent right now than a buyer's agent. All my short sale listings have multiple offers -- some double digits.

Last night I received an offer from an agent at list price on a listing priced below comparable sales. She spent a lot of time writing the offer, putting together the additionally required paperwork, including the buyer's preapproval and earnest money deposit, scanning it and emailing it to me. Her offer, at the moment, is in fourth position.

I asked the agent why she didn't call me for guidance on the offer. She replied, "I was told that there were other offers.  My buyer really likes the home.  He still wanted me to go ahead and submit [sic] offer anyway."

I have to ask myself why. If the buyer truly wanted the home, why wouldn't the buyer write an offer that is likely to win the home? True, sometimes the first blush of buyers disappear by the time an offer is accepted, but not all of them, and generally not the buyers who offer higher prices.

What the agent is actually saying is:

• Her buyer has a passing fancy
• Her buyer could be writing offers on other homes and submitting simultaneously
• Her buyer doesn't care if she wastes her time

When I write offers for my buyers, I turn over every rock and look under it. I want my buyers' offers to be accepted. As a result, it's rare that my buyers' offers are rejected. But I also give my buyers enough information about the market and the home so the buyers can make an intelligent offer.

You can't throw a dart and hope to hit the bulls-eye blindfolded. Well, you can, but you're just as likely to blind somebody in the process.

I've also got to find out why my sellers are telling buyer's agents that we have multiple offers.

But first, I should pop over to BuzzFeed to see the "Aretha hat" photoshopped on Dick Cheney in a wheelchair. It's important to maintain proper focus.

The Short Sale Savior, by Elizabeth Weintraub, coming to a bookstore near you in February.

Photo: Big Stock Photo