Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

As a Sacramento short sale agent, I am all about selling short sales. I know how it feels to be a rolling stone. I'm not talking about Mick Jagger. I'm talking about Bob Dylan. I am watching the Martin Scorsese 2005 documentary No Direction Home because it's a new release for the Netflix Instant Queue. The film is mostly about Dylan's life in the 1960s. I've seen the miniseries before, but watching it a second time gives me a different perspective.

I had a mad crush on Dylan as a teenager. One of the first songs I learned how to play on the guitar was Mr. Tambourine Man. I was not a very good guitarist and an even worse singer. No matter how hard I practiced, no matter how tough the calluses on my left hand, playing guitar was for my own enjoyment and nobody else's. I never got any better at it.

I took guitar lessons for a while and was forced to learn to play horrible songs like Old Black Joe or Red River Valley. It was a relief to play Bob Dylan songs. It was music I could relate to, feel and believe in. My teacher said if I could play a song six times in a row without a mistake, I would be the master of that song. But my teacher was wrong, and I never mastered anything. But it wasn't for lack of effort.

One thing I have mastered is how to sell real estate, more importantly, how to list and close a short sale. It comes to me naturally. And I think that's because I have a rebellious streak. Spunk, some people call it. I am a rectangle that does not fit into a round hole, which makes me a perfect candidate to do short sales. I am a rolling stone. I don't need a direction home. Wherever I happen to be is my home.

Bob Dylan was in the right place at the right time, and he said the right things. We should all be so lucky.

I am in such a Christmasy-mood today. I've already ordered my holiday cards, plus, I've bought my holiday gifts. Yup, I start the Christmas season in October. That's because I am moving to Hawaii for 3 weeks over the holidays. I think of it as moving rather than vacation because part of it will still be spent working. But not a big part. A small part. And that's where thinking ahead comes in. Please don't hate me because I'm organized.

I always plan ahead. As a Sacramento short sale agent, not only do I have a Plan B, but I have a Plan C and D as well. I plan most of my weeks in advance. When you're selling short sales, there is so much that is unpredictable that you've got to plan for it. If you don't have flexibility and movement in a schedule, you can't deal with the myriad of problems that pop up out of nowhere.

Basically, my schedule is 3 things. Get more business. Manage my existing business. Close escrows. I do also write articles for the New York Times-owned About.com. And yesterday I wrote my 100th short sale article. 100 articles about short sales. I can't believe it. Who knew I had that much to say about short sales, but I do. I have more to say about short sales every single day.

My 100th article is titled: What Does a Short Sale Listing Agent Do? I have no idea why it took me so long to write this one, but it's fitting for #100. In it, I also talk about what a buyer can do in a short sale to help to move it along.

I leave you with a photo from Harpers Ferry in West Virginia. This is from my husband, Adam, who is on the East Coast this week hiking through national parks with old college friends. You may recall, Harpers Ferry is the birthplace of that guy John Brown whose body lies a mouldering . . .

My phone rang off the hook over the weekend but it wasn't sellers looking for a Sacramento short sale agent to list and sell their home. It was sellers who already had listed with me and who had received an email from DocuSign. My transaction coordinator sent out the MARS disclosures on Saturday. I knew these forms would be difficult to explain the minute I laid eyes on them.

The MARS forms are meant to protect the public from ripoff schemes and scam artists, especially those who charge fees in advance for negotiating a loan modification or a short sale -- many of which never materialize. It's a shame that when you find people in trouble, the sharks come out of the woodwork, but that's what has been going on in California and across the nation. People in danger of losing their homes find themselves directly in the path of a tornado. It's like their home has a blinking neon overhead that screams out: victim, come and get me. Crooks are everywhere. I don't blame people for being afraid.

Because real estate agents and brokers deal in the short sale market, the government has decided that MARS disclosures apply to us as well. So, even though we don't charge fees in advance and are paid commission by the banks at closing, the government says we have to give these disclosures to our sellers. They don't contain anything I haven't already told them because our listing agreements for short sales are woefully inadequate as well.

I tell sellers that they have the right to approve the short sale letter we'll get from the bank. Doesn't even matter if they're under contract with a buyer -- the entire transaction is subject to the seller's approval of the terms and conditions contained in the short sale approval letter. I tell them nobody will make them sell their home. They can cancel the purchase contract and the listing agreement at any time.

You would have thought that NAR could have made the forms a little more explicit. For example, the second disclosure says the commission paid is the same as the number in the first disclosure, but it's often not. Didn't NAR talk to any short sale agents before coming up with these forms? Sellers have a hard enough time understanding that they don't really pay the commission, but leave it to NAR to make it even more confusing.

Now I hear that the government thinks it might have made a mistake by forcing agents to send out the MARS disclosures. Within a few weeks, we'll find out if the government will exempt us from giving a disclosure to sellers that make us look like crooks when we're not.

My friend and associate Jim Kimmons, who writes the real estate business website for About.com, posted a blog last week talking about whether falling real estate prices are the fault of real estate agents who list short sale properties. His position is agents don't control the real estate market, and we don't. Real estate agents can only react to the real estate market.

But buyers react to how they perceive the market. Even if their perceptions are flat-out wrong. And part of the problem with the way some home buyers perceive the market is they are looking only at the homes available for sale. They generally don't study the comparables sales and their buyer's agents rarely give them the comparable sales. I don't know why. Makes no sense. How can a buyer make an informed opinion of how much to pay for a home if they don't know how much homes sell for?

But they do. Every day. They make their decision on sales price based on the homes they see for sale. Which means nothing. Because sellers can ask any price they want -- the only thing that matters is how much they actually get.

Unless the price of that short sale is based on the comps or accepted by the bank, the price of a short sale is a fabrication.

The more serious problem that occurs is when a bunch of short sales are on the market at ridiculous prices that those short sale banks will never accept. It paints a false impression of the market for home buyers. Because home buyers don't know any better or how homes are priced, they falsely assume they can negotiate on those prices, and they offer even less!

Unfortunately, their agents let them lowball the short sales. That's who I blame. The buyer's agents.  I don't blame the buyers because they are relying on their buyer's agent for advice and direction to buy that short sale. Yet, it's their agent who leads them astray by not explaining how short sales work. They wimp out.

You might think I'd blame the listing agent, but I don't. That's because sometimes a seller and his Sacramento short sale agent have no choice but to lower the price of that short sale to be placed competitively among the other homes for sale. But a buyer's agent who is educated, knowledgable and experienced in short sales should know enough to understand that banks accept short sales when those purchase offers are based around market value. To do otherwise leads to insanity, because it's doing the same thing over and over and expecting different results.

Photo: Big Stock Photo

The public seems to think that we real estate agents spend a lot of time in our offices, and nothing could be further from the truth. There are only 2 reasons for me to go to the office. Either I'm meeting with a client for a closing or I am attending a weekly office meeting. While I am at my Midtown office, I pick up my mail, but mail alone is not a reason to go into the office.

I primarily work from my home office. I've got couple of computers going at all times, a big screen monitor, a printer, a mobile scanning device, a fax machine, several phones and a BlackBerry, an iPad, an iPod and 2 cats running amuck. What else could I possibly need? If I'm in front of my computer, I'm generally writing an email or a contract. (OK, I could be playing Angry Birds.) But most of the real work is done out in the field in front of real live people. And you just can't get that done in a physical or virtual office.

Because I'm an agent who sells a ton of short sales in Sacramento as well as the occasional traditional sale, I keep a pretty tight schedule. I can afford to spend about 2 hours in the office every week, attending a meeting or talking with other agents. I wish I had more time to socialize, but I don't. Yesterday, however, I had a chance to chit chat for a while.

My office is holding a listing contest and our 90-some agents are expected to split up into teams of 6 or 7 people each. I don't recall all the terms of the contest, but I agreed to be on a team as long as I didn't need to lead it. There was some discussion about a mascot and team title, so I suggested Tank Girls. That's because I am twisted, and I thought it was very amusing. One agent asked if that meant we all had to wear tank tops. Another thought it was about Nemo or fish tanks.

They looked at me funny when I said the mascot is an army tank. I think they're gonna stick with that name. What can I say? Lori Petty was a pretty good role model in the mid-'90s. Sort of defined that period for me. And I really liked that movie. Tank Girl, rated R. (Hide the DVD from your kids.) Maybe I've been a Sacramento short sale agent for too long and have fought too many corporations to have a different outlook. The real estate market in Sacramento is definitely a battlefield, and has been for a while now. I'd say that's an excellent description. Yup, Tank Girl.

Photo: Big Stock Photo

It doesn't astonish me how many scams are being run in Sacramento short sales these days. From agents trying to double-end and double-escrow short sales to those who collect huge front-end fees that are against the law, the scammers come out of the woodwork when people are hurting -- seems to be a law of the universe. You've got to be careful when you select a Sacramento short sale agent.

But here's a story about a guy buying a short sale who cut out the listing agent. He went directly to the bank. I couldn't tell from the article why the listing agent refused to present his offer, but it sounds like it's possible the agent was flipping the home.

Just for the record, I always try to get my Sacramento short sale sellers the highest and best price. If I receive a second offer after the first offer has been accepted and submitted, I send that offer to the seller and ask for direction -- should I send it to the bank or not? If the accepted offer contains no verbiage prohibiting the submission of a second offer, the seller is generally permitted to submit a second offer, if the seller so elects.

You've got to ask yourself if such an approach would work on a Sacramento short sale? Cutting out the short sale listing agent? First, the buyer's agent couldn't do it. That would be interfering in another agent's transaction and against the Code of Ethics if a buyer's agent sent an offer to the bank, around the listing agent. But could a buyer do it? Hey, there is a place in Equator to submit multiple offers for Bank of America short sales. Just sayin'. Short sale buyers might have more power than they think.

Photo: Big Stock Photo

Because today is Dec 31, 2010, most County Recorder's offices are closed throughout California, although, I can't imagine any Sacramento short sale seller wanting to close at the end of December with SB 931 positioned on the horizon. SB 931 is the anti-deficiency law passed in California that says when a lender in first position agrees to a short sale, it cannot pursue the seller for a deficiency judgment. It does not apply to foreclosures.

I'm working on 3 Bank of America short sales at the moment, all of which were scheduled to close this week. In 2 of these short sales, the bank has refused to submit a letter releasing liability. In the 3rd Sacramento short sale, Bank of America issued an amendment to the original short sale letter releasing the seller from liability by removing the deficiency language from its approval letter, but then failed to mention this release in a subsequent extension.

The answer? Roll all 3 into January. Get extensions from Bank of America. Yeah, it's a little disappointing for the buyers who had hoped to be in their new homes by New Year's Eve, but it's better this way, most likely, for everybody.

One of my sellers scoffed when I suggested that Bank of America may have given us the extension because it might not realize that SB 931 is going into effect on January 1. But then I received an email this morning from Bank of America that confirmed my suspicions. SB 931 is probably not yet a priority to Bank of America. But it will be.

Some lawyers have argued that SB 931 is unconstitutional and will be challenged. But at the moment, any seller who has only a first mortgage (hard money or purchase money, makes no difference) and who petitions the bank for a short sale in California next month, should fall under the protection of SB 931, if the bank approves the short sale.

2011 will surely be a bumpy ride. Check out my real estate predictions for 2011.

Happy New Year from your Sacramento short sale agent. While everybody else is toasting with champagne to the New Year, I'll be toasting to SB 931.

Photo: Big Stock Photo

My mother used to tell me that if some guy told me he was no good for me, I should believe him. I like to think that much of my success in life, I owe to my mother. She was a smart woman. I was fortunate to be raised by her.

But why are some people so darned gullible? I ask myself that question all the time but don't have any good answers. Even after a person is informed that the person is getting ripped off, a person will still glom onto a shred of hope that it might not be true. I realize they are desperate, and desperate people will go to desperate measures, but still. Where is that little voice in their heads that the rest of us listen to?

A guy somewhere in California (but not in Sacramento) emailed me this week. He sent me a link to a website, asking if the company was legitimate. This guy, like many others in today's economy, is underwater. His home is worth less than he owes. He considered doing a short sale but then found this company that promised to refinance his home through a principal reduction program, which would knock down his mortgage by 50%.

Well, that doesn't happen in the real world. There are a few government underwater refinance programs available but, for the most part, very few homeowners qualify for them, and they typically don't reduce a principal balance by that huge amount. They also do not charge upfront fees apart from an appraisal.

The website did not contain any contact information. No list of company directors, no street address, no affiliate information apart from other websites that the scammers probably owned -- there was not one shred of identification. Just a toll free number. It also made promises that are virtually impossible to guarantee such as:

• any loan qualifies
• will report the payoff as Paid in Full
• new mortgage set at current value of your home

I Googled the name. Sure enough, found damaging evidence and sent it to the guy who emailed me. He admitted that he had already paid these hucksters $1,200. They promised him they were receiving funds from TARP and would refinance his loan through a hedge fund if he would just wait until February of next year. So, he was planning to wait. You know, I can't save this guy. But I did report the company to the Attorney General of California and the California Department of Real Estate.

Listen, if some company promises you a principal reduction program and you don't know whether they are legit, check them out. Ask a lawyer to check them out. Ask a nonprofit loan counselor to check them out. Ask your teenager to Google them, for crying out loud. And don't send them any money!

When clients come to me to do a short sale in Sacramento, the first thing I do is arm them with information from the California Association of Realtors and suggest they get legal and tax advice. If you're not getting this kind of service from your Sacramento short sale agent or you have doubts about whether your proposed agent has actually closed any short sales, call me. I'll give you the straight scoop. But don't get ripped off through a principal reduction program that is a scam.

Photo: Big Stock Photo

If a seller in Sacramento, -- or anywhere in California for that matter -- ever needed a good reason to do a short sale over a foreclosure, the fact that SB 931 was signed into law by Governor Schwarzenegger on Sept. 30th should be reason enough. First lenders can no longer go after a short sale seller of one to four units. Of course, the protection against a deficiency judgment is only for a first trust deed, but it no longer matters whether that first loan was purchase money (non-recourse) or hard money (recourse). It does not apply to subsequent or junior encumbrances.

The provisions of SB 931, which is now added as Section 580e to California Civil Code, prohibits a first lender from pursuing a seller after a short sale. It does not protect those who go through foreclosure. Although purchase money loans are non-recourse, some lawyers have argued that doing a short sale gives a bank certain rights to pursue a seller after a short sale, regardless.

I have received short sale approval letters that address this right and letters that do not. Sellers are not automatically exempt from a deficiency simply because the short sale letter does not address the issue.  SB 931 clears up that confusion.

However, here is the kicker. It applies only to short sales that close on or after January 1, 2011. This could possibly mean that many sellers with only one loan may elect to postpone closing their short sale until January. Of course, sellers  facing an auction really don't have that luxury. They may have to close or go to foreclosure.

The new anti-deficiency law applies only to one to four units, and the sellers must not have committed fraud or be a corporation or political subdivision of the state.

See previous post about SB 931.

Photo: Big Stock Photo

I admit that I do have this soft spot in my heart and I don't like to see people suffer. Chilean miners, people in Pakistan, even goofy Sarah Palin. Maybe that's why I excel at doing short sales, because I feel like I am doing something worthwhile and not just churning homes in Sacramento. Not that there's anything wrong with just selling a house or negotiating for a buyer, but when I'm working on Sacramento short sales, there's a lot more at play than the employment of my analytical nature.

Short sales are hyacinths under the snow.

A client recently choked up when she talked about reading my article, How to Write a Hardship Letter, because I acknowledged that writing the letter could very well be extremely difficult to write from an emotional point of view. I try to walk in my client's shoes, and I think about how they might feel. I have empathy. I also know that categorizing depressing events, one after another, is likely to be depressing in itself. I mean, how can you write a letter detailing all of the horrible things that have happened to you and not be affected by it?

I suspect most people tend to deal with catastrophes and downfalls by moving on, and how can a person move on if a person has to revisit these horrific events over and over and then list them in sequence? The total picture can be devastating when a bunch of isolated incidences are strung together. A hardship letter says, Welcome to: This is your life.

Another client teared up when we were discussing her short sale. She said that she takes 100% responsibility for her situation. She made the decision to buy that home, and she also decided to make improvements, which is why she took out a home equity loan. I almost felt like she was saying, Bless me, Father, for I have sinned.

How was losing a job her fault? Who can predict these things? It used to be that improving a home meant a person was increasing equity. Even without the home improvement loan, this seller's house was underwater. Throw into the mix lost income and you've got a recipe for financial ruin. It's not my job to hear confessions and absolve guilt, but I also could not sit there quietly and listen to this woman beat herself up.

So, I reached across the table, put my hand on her arm and said it was not her fault -- hoping that maybe when she sees that I believe it, she will, too.

There is a future for sellers who do a short sale. It's the first step toward recovery and regaining financial ground. It's a way to put the past behind. Two or three years from now, a short sale seller may be able to buy another home. If that home is in Sacramento, it will most likely still be very affordable. The unemployed will eventually find work. We will get through these uncertain times. Things will improve. And that's the hope to which we all cling.

Photo: Big Stock Photo