Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

A reporter at the Sacramento Bee asked me yesterday how I got started in short sales. The Bee is working on a piece about buying short sales and selling them. It's not like I woke up one morning and said I wanted to become the #1 Sacramento short sale agent. As I told him, you go where the money is, meaning you follow the market. No matter how much we might want to dictate our careers in real estate, our careers are pretty much formed by whether we conform to the market.

If you want to buck the norm, for example, and work with only move-up buyers, you might not have as much business. That's because the move-up market is not as active at the moment as the first-time home buyer market. The entry level market is on fire in Sacramento. Definitely a seller's market right now.

So, yeah, to make the same amount of money as I made when home prices were soaring, I have to sell twice as much and work twice as hard, but so what? I love what I do. I love selling real estate. I am not a real estate snob. I will sell a $30,000 condo or I will sell a $3,000,000 home on the river bluffs. Makes no difference to me.

In the old days, once we went into escrow, usually much of the work was over. Now, getting into escrow is just the beginning. With a short sale, I need to negotiate approval with the bank, manage a buyer's expectations and balance BPO values. Plus, there is never any guarantee that buyers will hang around, despite how tight the noose. Although, I probably have better luck than most at keeping buyers in escrow.

I remember that guy in my office backing me up against a wall and asking in all earnestness: "Why would you want to sell a short sale?" I laughed then and I laugh now at that recollection. That was many years ago. Because that's the market. That's what people need. They need an excellent Sacramento short sale agent who is obsessed with short sales and good at her job.

First, I wrote a book about short sales: The Short Sale Savior. Then I wrote more than 100 articles about short sales. All based on my experiences over the past 6 or 7 years of selling short sales. I learned stuff the hard way. For example, in August of 2005, the phones stopped ringing. I looked at those 80 / 20 combo loans and thought what will happen now? If prices fall, then what? Short sales were the answer. I threw myself feet first into short sales.

I predict that short sales will continue to be the answer far into 2015 and beyond.

Amidst all the noise and chatter, we don't have a turnaround in Sacramento. Not yet. And not as far as I can see. I see nothing but short sales and more short sales and more declining prices. It's a bit depressing. It's like the earthworm I flung by accident the other day. Ick. This fat worm crawling around on my garage floor. Too much rain. It was almost as big as a snake and a good 10 inches long. I felt sorry for it and grabbed a piece of cardboard to fling it out of the garage and into the yard. I kept flinging as I walked along and yikes. Next thing I knew I had impaled it on a pear cactus thorn. It dripped earthworm juice in a steady stream to the dirt.

I was all primed to write about investors who are buying short sales this morning when I received an email from a buyer's agent who is representing herself. She's trying to buy a short sale in Elk Grove. I have to share this. The agent said she was withdrawing an offer she made yesterday that was too low. I had asked her to bump it up to meet the comps. She said, "According to Zillow.com, it is worth $XXX." As a licensed real estate agent, she has world class tools at her disposal to help her to determine market value but this agent relies on a worthless website such as Zillow? See, this is part of what's wrong with the Sacramento real estate market.

The other part is our local real estate market is exploding at the moment. We've got investors and buyers fighting over the same Sacramento-area properties. The reason is simple. Investors can get positive cash flow because of today's prices and historically low interest rates. This means an investor can collect more in rent than she pays for a mortgage payment. Many renters should be home buyers because it's costing them more to rent than to own.

Much of the inventory available for sale is a short sale. As a Sacramento short sale agent, I carry a large inventory of short sale listings. My goal is to put that short sale into escrow and close it. To accomplish that goal, I help my sellers to choose the best short sale offer. Is that an offer from an investor or a home buyer, in other words, an owner occupant? Which is the best buyer?

Most of the time, sellers prefer to choose the offer from the owner occupant. Why would they do that when the investor can wait forever and the first-time home buyer typically cannot? Because there are problems with offers from investors. For starters, if the short sale home is occupied by the seller and a Notice of Default has been filed, investor buyers must comply with the Home Equity Sales Act. Many of them don't and have never heard of this law. But if they don't comply, the seller can rescind the transaction 2 years later -- after the seller restores credit from the short sale.

Another problem is some investors want to hold title as an LLC, and short sale banks don't like to accept offers from an LLC. Additionally, some investors want to flip the property. Many short sale approval letters restrict flipping for 90 to 120 days. If that's the goal, the buyer will cancel upon short sale approval. And not to mention, sometimes the buyer's agent is acting as principal and, when that happens, the banks don't always allow the agent to receive a commission. These types of offers magically vanish when agents discover they are stiffed.

But aside from all of that, who is more motivated to wait for short sale approval? Who is more motivated to increase the sales price if the short sale bank demands it? Who is emotionally connected to the home, enough to jump through qualifying hoops the bank throws into the air? Which type of buyer does a seller feel attracted to? Mr. Money Banks who wants to rent out his home and retire with a big, fat, 401K? Or, Miss FHA first-time home buyer?

I'm not even going to talk about the investor who is trying to cancel one of my short sales because another came back on the market that caught his eye . . .

You know the scenario. You're driving along with the kids in the back seat who are poking and prodding each other, "Mooooommmm, he kicked me." Did not, did not. "Mooooommmm, he's touching me!" I'm sitting waaay over here. And then pretty soon you get the whine, "Are we there yet?"

You look out the window. The car is still moving. Your hands are on the wheel. Does it look like we're there yet? No, it doesn't. Because that would require the car to be parked.

I don't have any kids. But I used to be a kid, believe it or not. I remember what it's like.

Now, as a Sacramento short sale agent, I am also the gatekeeper. Buyer's agents check in with me sometimes daily to ask if we have short sale approval yet. Some of them send me an email reminding me that only 8 days ago they submitted an offer and asking where the hell is that darned approval letter.

Some buyer's agents think I am so busy that I do not notice when a short sale approval letter arrives. Why, it could be sitting in my email for days. Not. My email downloads every 2 minutes. Do you think for one minute if I had an approval letter that I would purposely withhold this information?

But they just don't know. They like to kick the back of my chair. Over and over. A guy in third grade used to do that to me. Kicked the back of my chair. Then, one day I turned around, grabbed a black magic marker and scribbled all over his desk. See, I would do it again. Even if I'm made to stand in the corner.

I tell all the buyer's agents that they can get updates from my website. The minute something happens, it's posted there. A good rule of thumb is to check in with a short sale listing agent every 2 weeks or so. Not every day. Not every two days, and not every week. But if you can't remember how to get to my website or how to navigate it, by all means, send me an email and ask me if we're there yet.

I'll respond. I always do.

Is it soup yet? Almost.

How do you break bad news? And when is the best time to break bad news? You learn how to handle this when you are in real estate, especially if you are a Sacramento short sale agent. Because not everything is hunky dory 100% of the time. Crap happens. And when it does, you've got to be able to predict it and deal with it.

I have a short sale closing today, among three of them. This particular closing would not be happening today if I hadn't requested an extension. When I asked for the extension, I was 98% certain it was closing yesterday, which was a day for which I did not need a short sale extension. But in the off-chance it rolled over to today, yup, I would need the extension. I'm a be-safe-than-sorry kinda person, so I requested it. I don't take a risk unless it is calculated and I absolutely must. Let me tell you, everybody is very happy with me right now.

But two days ago I received a worksheet counter in Equator from Bank of America. This is for a short sale in Sacramento valued at, oh, let's say $150,000. The counter offer was for $34,000 more, or, let's say, $184,000. I am so used to such nonsense in a short sale that I didn't even blink an eye. I was also confident enough of my estimated value that I went about setting up the buyer to get a full fledged FHA appraisal to prove Bank of America wrong. Then I thought, hey, let's just send the bank a CMA. I did that. Sure enough, following day, an apology and a request to resubmit the original offer. Bank of America made a mistake. Transposed the numbers.

I don't like to hit people between the eyes with bad news. It's unnecessary, and it's not polite. If I see something bad coming the pike, I try to break the news gently. I prefer to do it in the morning when people are unprepared more receptive, than in the afternoon after a rough day of building up defenses. You know that old joke: the cat on the roof?

I would rather prepare people for bad news and then deliver good news. It's better than smacking 'em with cancellation news from the get-go. In another file, we ran into a snag with a third hard-money loan. I had to tell the buyer's agent that the cat is on the roof and he won't come down. But by the second day, instead of having to say that cat is at the vet, I was able to say the sellers are clearing the third mortgage prior to approval.

I am a Sacramento short sale agent, and I am proud of what I do. The services provided are such that not every agent can or wants to do it. But I don't want to be hated for it. The thing is when a person is successful in the real estate business, automatically there are agents who build up an intense hatred because they, themselves, are not successful. It's the weirdest thing ever.

I know there are agents in Sacramento who are very unhappy when their seller fires them and hires me. I don't call these sellers; I don't solicit the business. The sellers are the ones who track me down by asking other people who they should hire. I enjoy a good reputation for short sales in Sacramento. When a seller calls me, the seller can be assured that I will put their interests above my own, and do everything in my power to sell and close that short sale.

My managing broker asked me over the weekend if I ever call on the expired listings. You know, there are agents in the business who eke out an excellent living by calling sellers whose listings have expired or been withdrawn. Generally, they put down the listing agent because that's what they were taught to do by their trainers. I'm not singling out any one agent in this process -- I simply know this happens because I hear it when I take a home off the market and put it back on. Agents call my sellers and slam my work.

But it really ticks off agents when I take over their short sale listing, sell it and close it because they could not. And you know what, it's not my fault they couldn't close that short sale. I did not try to take their seller away. Their seller called me and asked me to do the job for them. I'm not in the business of swiping clients. In fact, if I know a seller has a relationship with another agent, I will call that agent and give the agent a heads up.

So, no, I do not call expired listings. They will eventually call me. The only thing I wish is they had called me in the first place and saved themselves the misery of listing with an agent who could not perform.

A buyer's agent did ask me to contact an expired listing a few days ago. She has a buyer who wants to buy a certain home in Roseville. The home had been on the market as a short sale several times and eventually canceled. I tracked down the seller to ask if she wanted to sell. She said she couldn't because she has a third mortgage through a lender that would not cooperate. Funny, I've closed several of those types of short sales with that particular lender lately -- hard-money loans, too.

The seller made it clear she had no incentive to sell as a short sale. She already has a foreclosure on her record, what's one more? She told me she is a real estate agent yet there is no license of record for her at the Department of Real Estate. This is why I don't call expireds. There is a good reason why some of those are expireds.

The sellers who do want the help will call me. Agents shouldn't hate me for it, though. They should look in the mirror at the person to blame and try to figure out what they can do to improve their own performance.

A client called me about his short sale on Friday, to talk about the chances of success our third time around with his bank and to thank me for continuing the fight for him. You see, sometimes banks say no, but they will say yes with the next offer. I think it depends on their menstrual cycle. Sometimes, buyers say no to a bank's request, but the next buyer says yes. This is why I never give up. As long as I can see the other side of the river bank, I'm swimming over there.

Speaking of water, I could hear what I thought was a faucet running while I was talking with this guy. But I was paying more attention to the numbers he tossed in my direction as possible seller contribution amounts than I was to superfluous background noise. We'd already received short sale approval on his property twice from the bank. The two approval amounts formed a wide gap from each other. The latest offer was pretty low, and our new strategy was to bridge that gap, rather than look for a new offer. After all, the bank was releasing the seller from personal liability.

Suddenly, I heard FLUSH.

The seller continued to talk over the sound. I was speechless. My first thought was wow, he can zip with one hand. My second thought was the sound was too loud to come from a neighboring stall, but then how would I know? I can't recall having a conversation under these circumstances.

That Elizabeth Weintraub. You can talk to her anywhere.

I mean, what would you say?

Why don't you call me back when you're not so busy? (Oh, I'm all done now)

When I woke up this morning, I did not know what day it was. It was still dark and my husband was out of bed. That meant even though I thought it might be Saturday, it wasn't. Was it Monday then? Have you ever had those days when you have absolutely no handle on time reference? It wasn't Monday because that would have meant yesterday was Sunday and yesterday was . . . Tuesday! Aha. Today is Wednesday.

Now that I have solved the biggest obstacle of the day, here is a photo of my kitten, Jackson. There's a big difference between him at 8 weeks and this photo at almost 11 weeks -- he has developed confidence and a bit of an attitude. He's just so freakin' adorable, little terror that he is.

Tuesday was fairly hectic in Sacramento short-sale land. I spoke with a few potential short sale sellers yesterday, gave an interview to Atlantic Monthly, set up a couple of short sale closings for this week, put 2 more short sales into escrow, managed showings and delivered feedback to sellers, negotiated a couple of contracts, discussed a home inspection for a buyer in Land Park, sent short sale packages to several banks, and fixed a photo that MetroList managed to screw up. I have no idea why it happened, either.

I routinely look through my listings to double check whether status is correct and whether I need to tweak verbiage or otherwise update something in the listing. I noticed a home in Rocklin had the front photo altered. At first, I thought it there was a monitor problem, but no, it was clearly labeled MetroList. For some reason, MetroList drove out to Rocklin, snapped a photo in the dark and slapped it on my listing. You could hardly make out the outline of the home. It was awful.

I checked my listing. Sure enough, the box was checked for agent to supply photo. I never let MetroList take my photos. Never. I had uploaded all of my photos the day the listing went live. There was no logical reason for MetroList to change my photo, but change my photo it did.

It pays to take out time every now and then and scroll through my Sacramento short sale listings. Mistakes happen. People screw up. Kittens on the other hand, they never screw up. Just ask Jax.

Photo: Elizabeth Weintraub

I'm not saying any of what I'm about to talk about happened this week, but it happens often enough that I thought perhaps it would be a good idea to just lay it out in the open. It's the thought process that goes through some buyer's minds when they think they can effect change in a short sale if they just yell loud enough or make enough threats.

For example, I might tell a buyer's agent that the file is in review at management, and we should have an answer within 10 business days, which is generally the norm. A buyer's agent might get hammered in the meanwhile by his or her buyer. The buyer might threaten to cancel if the file is not approved sooner.

Threats don't work. Negotiators don't care. I may care but I can't help you. If you want to cancel, then cancel. Better yet, don't enter into a short sale if you can't or won't wait for approval. Because short sale buyers are at the mercy of the short sale bank. Period. You can do a raindance in front of the bank, toss firecrackers into the boardroom, yell, scream, stomp, write scathing letters to your state senators and yank out your hair, but the process is not going to move any faster for you.

What happens when you cancel is you look around and everything else you can afford or want to buy is a short sale, too. Not every home buyer has what it takes to buy a short sale. People ask why we qualify the buyers for our Sacramento short sales. This is why. Unrealistic expectations.

Staying positive while going through a short sale can be a real struggle for some people. Short sales, whether they are taking place in Sacramento or Pocatello, are about the same anywhere in that they can take their toll. Some agents, after attempting a short sale, swear off and say they will never touch another short sale again. I've seen these guys hanging garlic over their desks and thrusting wooden crosses in the air when they so much as hear the word short sale mentioned.

Sometimes, sellers ask me to describe all the things that could happen in a short sale, all the likely scenarios. Why? For one thing, short sale sellers have enough on their plates. They need only to know what pertains to them. For example, if they don't have a hard money loan, then they don't need to hear about those consequences; we'll just focus on their situation. If they are doing a Wachovia short sale, then there is no reason to weigh the various possible outcomes of a Bank of America short sale.

While I try to prepare my sellers for worst case scenarios, most of the information I deliver is not doom and gloom. It is tailored to each seller's unique situation. Each short sale is different. As a Sacramento short sale agent, I've closed a bunch of short sales ever since this epic in 2006 seized Sacramento by the throat. I make it my business to anticipate tragedy and to try to head it off before it happens.

But I cannot accurately predict how much the short sale bank will ask as a seller contribution. That part is impossible. All investors have different requirements. It's not the bank that demands the contribution, it's generally the investors. They use a variety of measuring tools as well to calculate their loss and the predictability of how much a seller will pay.

I can tell you this. If you have not much of a hardship, lots of assets and disposable income, perhaps coupled with the potential for an even greater revenue stream down the road, the bank ain't letting you walk away. You'll have to give something. Maybe it's only a couple of months of payments; maybe it's paying on promissory note for the next 15 years. There is no free lunch in a short sale without hardship and with assets. But your short sale agent is your advocate and should have experience negotiating those settlements.

Hey, ask Jackson, my new ragdoll kitty. He says, "Shut up about short sales and talk about me." This is Jackson's 3rd day in the Weintraub household. He purred this morning when I picked him up. First purr! Today will be a good day:

Photos: Elizabeth Weintraub

They say the numbers don't lie. But numbers lie all the time. Look at 'em, just sitting there on the page. Lies, all lies. Can't you hear 'em squawking, making promises they can't keep? Why, I'll never leave you, say the zeros. And then they skip town. You can count on me, say the fives, as you watch their backbones crumble and morph into squiggly threes.

The thing is there are a dozen ways to manipulate interpret just about any real estate market report. What do you want it to say? Whether real estate prices in Sacramento are going up or going down depends on who is looking at the numbers. Most consumers don't devour every word in an article. They skim. They read headlines. If a headline says, "Foreclosures falling," people might think the market is recovering. But it could mean that fewer foreclosures closed escrow last month over the previous month; however, more foreclosures were filed, which could result in higher numbers down the road.

There seems to be a mental disconnect between charts and words. You need both, though, to figure out what's going on. In Sacramento, we have the optimists who see a silver lining everywhere they turn, the future is bright and sunny, the market is on rebound. And you've got the pessimists, the guys who believe the market is falling into a big, black hole, never to see the light of day ever again. There are not very many people in the middle.

Well, except for those pesky buyers who are out there driving around in circles. They are trying to figure out who can help them to buy a home and wondering where they should buy. Don't bug me, says an agent. He is too busy trying to predict where the Sacramento market is moving and when all these short sales will stop.

You know what? Buyers still need our help. Buyers want a nice home at a decent price in a good neighborhood. That's all. They have good FICO scores and are motivated. So, you can sit around the office all day chatting about charts, and color glossy photographs with circles and arrows and a paragraph on the back of each one, or you can get in the car and go show homes.