Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

The thing about being a Sacramento short sale agent is the surprises just keep coming. No matter that I've been in the business for more than 35 years, I still haven't heard it all. Even though I've been selling short sales pretty much exclusively going on 7 years. See, one of the reasons I write this blog is because there is an abundance of new stuff every single day to blog about. There's always something horrible happening. It's the way of the short sale, grasshopper.

For starters, all of my listings contain verbiage in MLS that discloses to buyer's agents the commission offered might be reduced by the bank. Nobody wants to work for peanuts. I get that. I don't want to work for peanuts, either. But the fact is regardless of how much compensation the seller and I agree on in the listing agreement, that commission still must be approved and authorized by the short sale bank.

Years ago, I used to ask for more than I thought the bank would approve. Because sometimes I would get it. But MetroList put a stop to that practice. MetroList said I could no longer ask my sellers to agree to pay a certain percentage unless I was assured that the bank would authorize it. I can't assure anybody of anything in a short sale, so MetroList knocked out that practice for me. I realize MetroList was trying to stop the crazy agents who were luring the innocent and unsuspecting through doubling or tripling commissions, but its ruling affected my listings instead. So, now I just say we will split the reduction if the lender reduces the commission, and everybody gets the short end of the stick if that happens. Fortunately, it doesn't happen very often.

But enough about money. In my world, the clients come first. The clients always come first. Even if I don't particularly like it, they come first. I have a fiduciary, and I take fiduciary relationships very seriously.

Imagine my shock yesterday when an agent threatened to tell his buyer to cancel the transaction if he had to cut his commission. I can't for the life of me imagine how that conversation would go down. Would he say, "Hey, we have short sale approval but my commission has been reduced so I want you to cancel the short sale?" Or, would he lie and say the short sale has not been approved? Once an agent writes an offer, an agent agrees to the possibility the compensation might be reduced, as stated in MLS.

I believe if an agent can't make an exception for a buyer and give a little now and then, that agent should not be showing short sales. Because nothing in short sales is cast in concrete. But that's just me. Some days you are the rabbit and some days you are the fox.

It seems that Wells Fargo has a newer practice in place regarding commissions. It applies to double Wells Fargo short sales, those with a first and a second Wells Fargo loan, and that second loan is negotiated in Iowa. Instead of cutting the commission on the front end and agreeing to pay more than $3,000 (or 6% of the second lender's unpaid balance), Wells Fargo has devised a plan to do it in reverse. It has something to do with their investor guidelines, I suspect, because I asked and the negotiator did not deny it.

What Wells Fargo has elected to do is pay full commissions on the front end and then take away part of it on the back end. The first will most likely agree to pay the amount stated in the listing agreement, whatever that is. But the second will then demand agent contributions to the second. Oh, they will cheerfully chirp that the buyer can pay it, but the buyers don't have any money. And because of SB 458, the seller can't pay it, either. So, buyers agents need to know that if they write an offer on a double Wells Fargo short sale, yeah, the bank will probably snatch part of their money.

But it's really not any different than snatching it on the front end. It's all the same money. Of course, a buyer's agent always have the right to say: No, I will not show that short sale to you, Mr. and Mrs Buyer. Because if we go into escrow, I won't make as much money as if you bought, say, a Fannie Mae short sale. I believe that Sacramento real estate agents are a lot more ethical than that. Don't you agree?

How do you know that short sale will close? I get asked that question from buyer's agents. Why? Because I'm a Sacramento short sale agent. I am not so full of myself that I would presume that every agent out there knows how much business I do. And even if they did know who I was, my success doesn't imply, necessarily, that I list short sales that won't close. We short sale agents can't always call 100% of the shots. But I come pretty darn close to it. My reputation depends on it.

I want a buyer's agent to feel secure that when an agent goes into escrow with me, we will close. You know why agents show homes? They want their buyers to close escrow. It's my job to make sure that the contract they enter into with my seller gets approved by the bank. I will move heaven and earth to do accomplish that, and I believe my track record proves it.

This is why I don't accept every short sale that comes my way. If I list a short sale, it's because a) I want to work with the seller and b) I believe it will close. Those are my two rules.

If a buyer's agent in Sacramento sees my withdrawn listing in MLS, which is a rarity, the odds are I no longer wanted to work with the seller. There are sellers who try to game the system. It's hard to tell the difference at inception sometimes, but as the listing goes on it often becomes apparent. That's not to say that every seller who hasn't made in payment in 2 years is gaming the system because that would not be a true statement, but some kinda get used to not paying.

However, I have, unfortunately, had sellers get short sale approval and then decide they want to continue living rent free. They did not want to accept the short sale. Nobody will make them do it, either. So, they go back to requesting a 4th or 6th loan modification that they won't get until they find another unsuspecting agent to list the home as a short sale. This can go on indefinitely because our mortgage system is totally messed up. But it's not fair to the agents who put in all of the work and who care about these sellers. Because these agents are working with a scam artist.

You Sacramento short sale agents -- look out for these scam artists. Don't get suckered by them. Qualify your sellers. If you're sitting at the kitchen table and your gut tells you something is wrong, listen to it. Get up and leave.

My second rule is if I don't believe a short sale has very high odds of closing, I also won't list it. A potential seller called me a few days ago to say she adopted 3 kids and needed a bigger house. So, she and her husband bought a new home and now want to short sale their existing home. Strike 1. They have a hard-money second loan. Strike 2. They have no hardship and can afford to own both homes. Strike 3.

While I understand the need for a larger home with 3 additional children, the bank will see that move as a lifestyle choice and not a hardship. I might even have been tempted if it was a Bank of America short sale, but it was not. The second lender, in their case, could go after them after a foreclosure and would be unlikely to grant a release of liability. No release, no short sale, not since SB 458. There is little incentive for the second to approve that short sale.

So, rest assured that if you spot a Sacramento short sale listing by Elizabeth Weintraub, that listing is probably going to close escrow. I do my homework. I don't work with deadbeats, and I work on the short sales that will close. If I say it's likely to get approved, you can pretty much take that to the bank. Not to mention, my short sale clients are some of the sweetest, nicest people you'd ever want to meet.

One of the biggest fears sellers often harbor about short sales is what if it doesn't sell? They have those fears because they are not in real estate. When you're in real estate, like this Sacramento short sale agent, you know that anything will sell if the price is right. Even a flooded-out house with mold the size of basketballs will sell. And yes, I've sold one of those, too.

There are a variety of reasons why a home might take longer than usual to sell, though. These are sometimes the reasons that some sellers don't want to hear because they are reasons the sellers should have thought of before they bought a home. I often tell people that the time to think about selling is when you buy a home.

Maybe it's in a bad location. You know, location, location, location is what drives real estate. Maybe there's something about it that other homes have and yours does not. I ask buyer's agents who show my listings to give me buyer feedback. From this I hear about things we can rectify. If we can't rectify those things, we can adjust the price to account for it.

Or, we can wait for the buyer who is just like the seller of this beautiful short sale. Because the seller bought this home for a reason. That is most likely the same reason a new buyer will buy it. Nobody is that unique.

There is a buyer for every one of my Sacramento short sales. If this agent is listing and selling that short sale, you can count on it.

Lyon Real Estate keeps its awards secret until its annual Awards Banquet. That is why I did not know which awards I would win until yesterday. Apart from being the Number 1 real estate company in Sacramento, Lyon Real Estate has more than 900 agents. To rank in the top 1% means an agent would have to have sold more than at least 891 other agents. It means an agent sells enough to be ranked with the top 9 agents in the company.

Yesterday, I received that honor. It's the first time that has ever happened to me. I know I did well last year because my bank account shows it and my numbers of closed sales reflect it. But I did not know that I earned the 2011 #5 position in the entire company. I am the #1 Agent in the Lyon Real Estate Downtown office for 2011, which is actually located in Midtown Sacramento. My peers assume my success happened because I specialize in short sales. As a Sacramento short sale agent, I surely do sell my fair share of short sales in town. That's no secret. But that's not necessarily why my production is so high.

My production is high because I do not deviate from the norm. I am focused. I am organized. I know how to close real estate, and I focus on closing. I've been in the business since the 1970s. If something works well for me, I do not change it. Because to change a method that works well would mean I have Twinkies for a brain, and let me assure you that I do not have Twinkies for a brain.

I analyze what works and what does not work. I discard the things that do not work. I use the things that do work. There, you have it.

Sometimes agents get ticked off. They expect me to make an exception. They might say, "I know this client and therefore yada yada." You know what? That doesn't work with me. I don't know you, most likely, and I certainly don't know your client. I have shared with you precisely what you need to do to get your short sale offer accepted. I spell it out in MLS. If you choose not to do it, you should look in the mirror because it holds the answer as to why your offer was rejected.

A buyer's agent yesterday lost out on a short sale because the agent did not submit the buyer's lender's paperwork as requested. While the agent waited for the buyer's mortgage broker to get around to it, another offer arrived. An identical offer with all of the requested documents. Guess which offer the seller signed?

Another buyer's agent submitted an offer with a $500 earnest money deposit. The buyer had previously been informed that $500 was too low. When countered to deposit more, the buyer decided she would not release any money at all until the bank formally approved the already preapproved short sale. This reminds me of that scene in the street from Bridesmaids. Experience has shown that buyers who do not want to deposit funds or who try to deposit pennies are not committed. Non-committed buyers are those who are unlikely to close. No short sale for you. Sorry.

I represent the seller. I never lose sight of that. I truly believe that closing the short sale for the seller is in the seller's best interest. That's my goal every single day. To get closer to closing for my sellers . . . and to eventually close. If buyer's agents and their buyers don't wanna get on that train, they can hop off. Preferably before the train leaves the station.

Some people think you don't have to do anything to sell a short sale, much less to sell a fixer upper. I believe that every home deserves a chance to shine and show off its best characteristics. It doesn't matter if it's a short sale or a regular home in which the seller has equity. Because a buyer doesn't really care. A buyer is not buying the previous mortgage. The buyer is purchasing a home. The condition of that home's existing financing is not really important.

As a Sacramento short sale agent, I try to make suggestions to my sellers of ways they can improve the way their home appears. Even fixer uppers. I have a fixer listing in a beautiful neighborhood of well manicured lawns, and it needs a lot of work. It needs work because there are no updates and the home has not been maintained. It's a grandma's house.

I'm not one of those agents who believes 100% in remodeling a home. My husband would disagree with that assessment because he knows I have a passion for home improvement projects. But not every home needs to be remodeled and, in fact, removing some of its original characteristics can permanently damage a home by altering its architectural style.

However, one thing a seller can do without much trouble is remove old carpeting, especially if the floors are hardwood underneath. People are reluctant to do it because they think the floors will need too much work. But that's not always true. On the plus side, it shows the true condition of the wood floors, so buyers are somewhat relieved. They don't have to guess.

I asked sellers to tear up carpeting from a home in Sacramento. I explained how to dispose of it, and that they should remove the tack strips along the perimeter too. But they did not need to refinish the floors.

What a difference. I just saw photos this morning, and the floors are random plank, in beautiful gleaming condition. Not to mention, grandma was a smoker, so the carpeting smelled like cigarettes, most likely. Getting rid of it should greatly improve the scent of that home.

Bad odors and old carpeting do not sell a home, and a short sale home's price could suffer because of it. That's because a BPO agent will not discount the home's price for that condition. But a buyer might not buy it at all. Don't be afraid to tear out the carpeting before selling a home.

Check out these before and after photos of the living room, by Elizabeth Weintraub:

The unfortunate odds are 9 to 1 that I will receive a short sale offer my sellers cannot accept. That's because buyer's agents are unfamiliar with the C.A.R. short sale addendum. I don't know of any training classes for them regarding the S.S.A, so I am going to provide 2 valuable tips for buyers and their agents at the end of this blog.

First, realize that C.A.R. designed the short sale addendum in such a manner that it is misleading. They did it because they did not want to frighten away buyers. Section 1A refers to the amount of time a buyer is willing to wait for short sale approval. If an agent does not enter a date or the number of days into this section, the default is 45. The likelihood of short sale approval in 45 days is pretty much slim to none.

There are exceptions but they are rare. The average days to approval is closer to 60, and some run 90 or more. We recommend that buyer's agents insert 90 days into Section 1A of the short sale addendum. That way, if we get approval in 60, we are a hero. If you do not change the number of days in Section 1A, after 45 days you are OUT OF CONTRACT and on the street. Oh, sure, an agent might say you could draw an addendum to extend the time at that point, but that's like saying let's have a trial marriage. A buyer is either committed or not.

A bill was drafted last year to require banks to respond within 45 days. That was so ridiculous and idiotic that it never made if off the Floor. It never even came up for debate before a House committee. This tells you how stupid it is to expect short sale approval in 45 days. It just ain't gonna happen. But C.A.R. doesn't want to scare fragile buyers, so it leaves 45 days in the contract and doesn't explain to agents how to change that time frame.

A new bill introduced February 17th requires a bank to respond within 75 days from receipt of a buyer's offer. It's called the Prompt Notification of Short Sale Act. This is further proof that short sales are not getting approved, on average, within 45 days anywhere in the country. Otherwise, we would not need this legislation. I wish C.A.R. would man up over this and support this legislation by changing its short sale addendum.

C.A.R. contracts are designed so the important fields are auto-populated by software. This removes the necessity for an agent to have to think about filling in a form. Agents obtain signatures. They don't prepare legal documents. Too much liability. However, an agent should know the verbiage in a contract.

Section 3 has a box that can be left unchecked or an agent can check it. It requires action on agent's behalf, so most agents do not check it. However, my sellers prefer the buyers act like buyers and that means they should release their earnest money deposit to escrow, just like they would for any other transaction. We would like that box checked. It says the deposit will be handled in accordance with the purchase contract.

So there you have it. Two things to do.

Put 90 days in Section 1A.

Check the box in Section 3.

OK, I'd like to answer that question by saying never. But that wouldn't be true. Sometimes we take a lowball offer on a Sacramento short sale. But not often. The reason is the market is so hot some buyer somewhere is likely to pay market value . . . or close enough to it for government work.

Agents are all over the board right now. The other day I had a buyer's agent give me peculiar advice about a Bank of America short sale. He swore that he closed a Bank of America short sale in which the bank didn't care what fees were paid because the only thing the bank examined was its bottom line. He swore up and down, "as a Christian man" -- right after he raised his voice an octave, exclaiming that I was forcing him "to go against his God" by signing a promise to not write other offers -- that Bank of America sees everything between the sales price and its net as a slush fund.

What the? That's nonsense; it's absurd. Bank of America examines the worksheet with a fine tooth comb. It routinely knocks out a $40 courier fee and a $125 notary fee. We're lucky if the investor's guidelines allow doc prep or recording fees.

What do you say to somebody who is upset and believes the wrong thing? I'll tell you what you say. You try to have compassion. You try to respect another's beliefs, and you don't mock his God. You say thank you; I appreciate your support, but I do things differently.

Because you can't change people.

Somedays, it doesn't seem to matter what we list a property at, a buyer will come in at 80% of list price or less. They think the banks are desperate without stopping to realize the bank doesn't own the property. They think all negotiations in a short sale are between them and the bank and the seller is merely an accessory after the fact. People think all kinds of strange things. Who are the brain police?

We might entertain a lowball offer, but that's just before an auction. In fact, I pulled one such home out of an auction yesterday with a lowball. It's not easy to postpone a trustee's auction. But a few days or weeks on the market? Nope, no lowballs, so don't send 'em.

Remember, I don't deviate from the norm. Learned my lesson that way years ago. When I find a tactic that works, I stick to it. That's my secret. I realize this sounds overly simplistic but it's true. If you're catching fish, you don't move the boat. Oh, they're biting here, so let's go somewhere else -- I had an ex tell me that once, and that's why he is an ex. I also focus on closing my Sacramento short sales. That's what a successful Sacramento short sale agent does -- she closes short sales. Those lowballs ain't closing, folks.

As usual, the answer is found in the words. I get a lot of emails from people asking me questions about their purchase contracts. They want to know how to cancel, fire, enforce -- an explanation of the rights of a buyer or seller in a short sale, and much of the time the answer is right under their nose. It's in the paperwork. But nobody wants to read the paperwork because that's like, oh, I dunno, being responsible, choosing the smart path and everybody wants the easy way out.

Because I'm a Sacramento short sale agent, I have to stay abreast of changes in law and practices across the board in short sales. Clients look to me for answers. I am a short sale expert. It's my business. Even though I cannot and do not give them legal advice, I sometimes do need to grab them by the shoulders and point them in the right direction.

For example, I might advise a client to avoid a HAFA short sale if I didn't think it was right for them. I can think of a combination that is almost impossible to do -- a HAFA Freddie Mac Citimortgage short sale. I tried for months to get my client's lawyer and Citimortgage together on a Freddie Mac HAFA, and finally realized it just wasn't gonna happen. Citimortgage did not know how to do a Freddie Mac HAFA. Citi -- which is now One Main Financial -- refused to understand that Freddie Mac would not accept an offer because it does not use the ARASS. Citi simply refused to open the HAFA upfront. So, we couldn't do it. Thanks, Congress.

Just this week I discovered that the new HAFA Supplemental from August of 2011 won't allow payment of delinquent utility liens. But wait, you may say, the supplemental does allow the seller to pay utilities from the HAFA relocation incentive. That's only because you didn't read the entire supplemental. It states HAFA does not allow payment of non-mortgage recorded liens. This is a clear example of the government screwing up.

On the one hand, HAFA says the seller can pay a utility bill through the relocation. However, if that utility bill is recorded as a delinquent lien against the property, the seller cannot pay it from the relocation. Now, I ask you -- who would volunteer to pay a utility bill if it wasn't recorded against the property? Argh. Why don't you just shoot me between the eyeballs? See, there is no incentive for a seller to pay it prior to closing unless nonpayment prevents the closing. And if nonpayment prevents the closing, HAFA won't let you do it.

Does that make sense to you? The government gives it to you with the right hand and takes it away with the left.

Investor is such a dirty word in media. Look at how media is treated on the courthouse steps in Sacramento, trying to film investors buying foreclosures at a trustee's auction. Some of those investors are real estate agents and they act like barbarians. In some ways, the term investor is misleading, too. It infers that these are people who are making money. But an investor doesn't always make money. Just ask those retirees who invested in mutual funds.

When I hear the term investor, I have mixed feelings. Because when a buyer calls me to say he or she is an investor, it means something totally different to me than it might mean to another agent. For one thing, it means we are generally at odds with each other. I am a Sacramento short sale agent who represents sellers. I refer buyers to my team members as buyers' agents. That doesn't mean that I don't close escrows with investors as buyers because I do. But those are the reasonable guys. The ones who don't have to crank every dime outta the deal and stomp on your head to do it.

The thing with an investor buying a short sale is it sends a signal to the bank. It says that the bank probably could have made more money if the bank sold the property to an owner occupant. On the other hand, it's investors who are going to pull us out of the declining market.

One of my team members received an email from a so-called investor yesterday. He told her it didn't matter what the list price was because the bank would counter it. Oh, really? That tells me he's been working on short sales listed by inexperienced agents because that is not my experience. He also said there is no such thing as fair market value. There's no explanation for that attitude except perhaps the fact that this guy has not yet bought anything, despite claims to the contrary.

But it was his last statement that I found amusing:

"I'm giving you an opportunity to get the dual commission by sending in an offer that is easy for you to do. If you don't want to do it that's fine, agents and short sales are expendable."

Gee, Mr. Investor, really makes us want to work with you, doesn't it? Such a smart guy. Your words have wooed me. Bowled me over. See, it's the guys who think that they know what they are doing who you have to look out for. They're the dangerous ones because they are so clueless. Not only do we not expect to earn a dual commission, we prefer to work on transactions that will close. They close because the offer is reasonable. We don't throw offers at the bank. We close short sales. That's the business we're in -- closing short sales; we're not in the business of entertaining investors.

If you're trying to buy a short sale in Sacramento and keep losing out to investors, call or email me. I'll refer you to an agent who will help you to buy a short sale -- to an experienced agent who is a short sale specialist. Many of my sellers prefer to sell a short sale to buyers who want to live in the property. To a person just like them. Owner occupants are also less likely to bail on a short sale when the next shiny object is waved in their face. First-time home buyers are always welcome on my doorsteps.

If you ask me, it's a coincidence that my mother was a writer. You can't ask her because she's dead. But if you could, she'd probably say she encouraged me to write. Yeah, right, that's why I have a piece of pencil lead in my left arm. It's where my brother stabbed me with a sharp pencil. He stabbed me because my mother made us all sit down after a family trip, all 4 kids, and we had to write an essay about our trip to Duluth, Minnesota. The person who wrote the best story got a prize.

My brother won the prize. My mother told me in confidence that she gave the prize to my brother because he needed the encouragement and I did not. My brother gloated. Ticked me off, so I told the gloating monkey what she said. Then, he stabbed me with a pencil. This is where I learned how to keep my big, fat mouth shut.

I don't believe today that most kids want to walk in their parents' shoes. It's not like the old days when if your dad was a milkman, you grew up to work in the dairy business.  If your mom was in real estate, that's what you did, too; and my mom was not. She worked at the University of Minnesota as an adviser, and was a journalist and an activist. In my world growing up, doctors sent their kids to medical school to become doctors and lawyers sent their kids to law school. It makes you wonder if the talent is in the genes or if it's developed. I mean, how many Judy Garlands and Liza Minnellis can we have?

Well, you've got Frank Zappa and his kid Dweezil. My husband says Moon Unit got the rawer end of the stick in the naming department, but I would not want to be called Dweezil. Kids would kick your butt. That which doesn't kill ya makes you stronger, I suppose. We went to the Crest Theatre last night to see Zappa Plays Zappa. Dweezil was fabulous in his own right but his bass player was amazing. However, the show had nothing to do with Suzy Creamcheese, which brings me to the point Robin Williams made years ago: if you can remember the '60s, you weren't there.

Still, it's nice to get a break now and then from concentrating on Sacramento short sales. Not to mention, we all could do much worse than to segue into Frank Zappa.

Photo below: Zappa Plays Zappa, Elizabeth Weintraub