Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

I like to tell my clients that we shouldn't cross bridges twice, but sometimes, you've got to. Part of the service I provide for my clients is to anticipate problems before they happen and try to head them off at the pass. There are situations, though, over which I have no control. And that means preparing for the worst and hoping for the best.

One of my clients, whom I cherish to pieces partly because his mind operates the same way as mine, can work himself into a lather. He's very analytical, always questioning why people do the things that they do and trying to predict what they might do next. He sets up a number of imaginary scenarios in his mind and plots out options and outcomes.

I try to explain, drawing on my own experiences, that he'll drive himself nuts doing that. You can deal with only the situation at hand, and it might not present an option that you've considered, so why waste the energy?

I feel very badly for some of my clients right now who are unable to close escrow on schedule. Some are delayed because of the stinkin' HVCC process; others are postponed because escrow won't go that extra mile to get the HOA docs or the REO lender isn't signing the HUD in a timely manner. Other Sacramento buyers are up against the buy and bail situation and, even though their situation may be believable, lenders are rejecting their loans in underwriting.

And of course, there are the delayed short sale approval letters. Especially if they are coming from a short sale originating with Bank of America or Countrywide, but other short sale negotiators are experiencing backlogs due to volume.

My advice is if you're waiting for a Sacramento escrow to close, whether it's a short sale, foreclosure or even a regular transaction, have an alternate plan in place in case your escrow closing is delayed.

Photo: Elizabeth Weintraub, Blooming cactus in Land Park, Sacramento

Elizabeth Weintraub is an author, columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

The Short Sale Savior, by Elizabeth Weintraub, available in bookstores everywhere and at Amazon.com.

Sacramento Short Sale Agent, Elizabeth Weintraub, has the answers to your Sacramento short sale questions.

An agent who represents a Sacramento home buyer for one of my short sales called last week to say his buyer is facing a 5% pay cut and may no longer be able to afford the home he wants to buy. The agent wanted to give me advance notice so I could put a different buyer into back-up position on that home, which I truly appreciated. Many of my short sale listings have 5 to 20 offers each.

But it made me wonder about Sacramento state workers and whether some might be stretching themselves a bit too thin to get into a home. My heart goes out to the state workers in Sacramento and throughout California at this difficult time. We are facing more than a $24 billion budget deficit in California. State workers, it seems, are getting hit especially hard with layoffs and pay cuts. It must be awful to show up at work not knowing if you can depend on being employed next month.

However, those Sacramento state workers who are planning to buy a home can find themselves in the same situation as the buyer for the short sale if they're not careful with their budgets. Personally, I feel that if you can't afford a 20% pay decrease and still afford to own your home, maybe you shouldn't put yourself in that position in the first place, if you can help it. Nobody needs that kind of stress.

What are your thoughts about home affordability for Sacramento state workers? What kind of advice would you give?

Photo: Elizabeth Weintraub

Elizabeth Weintraub is an author, columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

The Short Sale Savior, by Elizabeth Weintraub, available in bookstores everywhere and at Amazon.com.

Sacramento Short Sale Agent, Elizabeth Weintraub, has the answers to your Sacramento short sale questions.

I pride myself on being honest with sellers and buyers, but sometimes I run into people who don't want to hear the truth. I'm not certain what it is they want to hear. I suppose it could be the sound of their own words echoing back to them.

Last night I received an email from a prospect concerning a Sacramento short sale that is shown online as an "active contingent" short sale, meaning we have offers. The email was short and to the point:

Is the home at XYZ Street still available?  Is it a short sale? Are there any current offers in on it?
 
How motivated are the sellers?  What is their situation?
 
We would be very interested if the price were right.

What this tells me is the prospect is confused as to whether this home is a short sale. The prospect also seemed confused about its status and didn't realize that active contingent means we have an accepted offer and, like with most short sales, dozens of back-ups. They could be just starting out in the home buying process and didn't know that every great Sacramento home -- and this one is fabulous -- receives multiple offers. The types of questions they asked are those that a person looking to lowball might ask.

Inquiring about seller's motivation and situation -- which I'm not about to disclose to anybody as it violates my fiduciary relationship to the seller -- tells me they are probing to see if the seller will accept a lower price. This home is already priced way below market value; it would appear these prospects expected to offer even less.

But the last statement, saying they would be very interested if the price were right tells me they are not ready to conform to the marketplace. Buyers who refuse to conform aren't buyers. They are often delusional, people who think they are going to steal a gem of a home at a ridiculous price when homes are flying into escrow at prices over list.

I replied with a brief, succinct email, letting them know we have over-list offers, like any short sale, and dedicated buyers. I also said: "Please realize this is a seller’s market," hoping to enlighten and spare them future embarrassment.  And I apologized for not having time to go into greater depth and explanation.

This morning that prospect blasted off a reply, saying my response was "shockingly rude for a REALTOR®." Excuse me? Some people are weird. Every day I count my blessings that I am fortunate enough in this depressed market to choose my clients.

Elizabeth Weintraub is an author, columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

The Short Sale Savior, by Elizabeth Weintraub, available in bookstores everywhere and at Amazon.com.

Sacramento Short Sale Agent, Elizabeth Weintraub, has the answers to your Sacramento short sale questions.

My sister called yesterday from International Falls in Minnesota. She asked how to find Winnipeg in Manitoba, Canada -- whether Winnipeg was east of west of International Falls. I wanted to know what the heck was she doing in International Falls? She lives in Minneapolis. Seems she grabbed my niece's and her passports, jumped into the car and took off for Memorial Day weekend.

What kind of person drives 5 hours without any idea of how to get to her destination? Oh, wait, that's my sister we're talking about. The same person who installed a basement egress window without protection to prevent flooding.

Google maps gave me the directions to Winnipeg, which I repeated to my sister over the phone. Sadly, it's another 5 hours to Winnipeg from International Falls, and she was only halfway there. I suggested she spend the night in Kenora and make her way into Winnipeg in the morning.

See, to have a plan, it helps to have a Point A, a Point B and a map that shows how to get from one to the other.

This makes me wonder about Obama's foreclosure alternative plan that favors short sales over foreclosures. We're at Point A -- we have tons and tons of foreclosures, foreclosure activity was up 32% for April, according to RealtyTrac. We'd like to be at Point B -- where homes in default are quickly sold, without going through foreclosure and sitting vacant for months.

I don't see the map that gets us there.

The modifications to Obama's Making Homes Affordable plan asks for voluntary participation and the sets forth the following compensation for a short sale:

• Lenders can receive a $1,000 incentive from the Treasury to do a short sale
• Borrowers can receive up to $1,500 to relocate after a short sale.
• Junior lien holders can receive up to $1,000 from the Treasury to release the loan, facilitating the short sale.

If this plan will help Sacramento home sellers avoid foreclosure and complete a short sale, I'm all for it. But until I see a road map that clearly outlines how we will get from Point A to Point B, I have my doubts.

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com

Photo: Big Stock Photo

Elizabeth Weintraub is an author, columnist for The New York Times'-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

Sacramento short sale buyers, 2 months ago, wrote an offer for a property that is listed by an agent in southern California. This agent rarely answers his phone or returns phone calls. After offer submission, the agent told me that my buyers' offer was the highest offer submitted and promised to let me know if that ranking changed.

After day 30, I began calling the agent every week for an update, but never received an update, apart from the fact that "we're waiting." During one of our last conversations, I asked the agent if my buyers' offer was still the highest, as I noted the property had gone "pending" and was no longer in "active contingent status." Sometimes, even though they're not supposed to, some agents change the status to stop the phone calls. I reasoned if the status change was due to too many phone calls, there may be other offers.

At this point, the agent refused to tell me. He said it was unfair to the other buyers. Hey, I didn't ask how high the offers were or to name a price; I simply wanted to know if my buyers were still in first position. But he wouldn't budge. I always let buyer's agents know how they rank. But not everybody operates like me. The thing that bugged me the most about this was the agent had made a promise and then reneged.

I relayed this information to my buyers and, against my advice, they elected to withdraw their offer. I sent the withdrawal of offer to the listing agent with a note explaining that if only he would have disclosed their rank, they would have waited.

Low and behold, 2 weeks later the agent called to ask if the buyers would come back if their offer won short sale approval and whether it was all right for him to call me if that happened. I felt like saying, "Hey, knock yourself out," but I didn't. I said, "Sure."

You guessed it. By the time of short sale approval, all the other buyers had vanished. The bank issued a counter offer to my buyers, they countered (rescinding their cancellation) and we should receive short sale approval next week.

The lesson here is you never know what will happen on a short sale. It pays to have a little patience, even if the listing agent is uncooperative.

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com

Photo: Elizabeth Weintraub

Elizabeth Weintraub is an author, columnist for The New York Times'-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

I can't think of any worse combination of lenders to be dealing with on a Sacramento short sale than having a first with Countrywide and a second loan with Bank of America. (Unless it's Bank of America on the first and Countrywide on the second.) No matter how you look at it, it's double hell.

A short sale transaction I'm working on right now has that "winning" combination. Although both lenders are technically Bank of America, the second lender wants 5% from the first. On top of that, Countrywide wants a $5,000 cash payment from the seller, which the seller has reluctantly agreed to pay. Countrywide scrutinized the seller's financial documents and sent me an email saying it was obvious the seller was transferring money into his account from somewhere, so he has access to cash and they wanted it.

However, the short sale approval letter we received from Bank of America very clearly outlines that it will release the mortgage but report that mortgage as a charge-off, as a collectible debt. Then its recovery department will contact the seller after closing to make arrangements to collect the balance. Can it get blood out of a beet?

I should note that this second mortgage is a hard-money loan. According to C.A.R., second loans that are wiped out in a foreclosure retain the right to pursue a deficiency judgment because the security for their loan is lost. The seller in this case is damned if he does the short sale and damned if he doesn't.

He asked me for advice, and the best I could legally do was suggest he contact a lawyer. I am not licensed to give legal advice. He wanted to know if his lawyer could get Bank of America to change its mind about the charge-off demand. Personally, I doubt it -- especially given Bank of America's policy and the time frame of 2 weeks before the short sale approval letter expires. But that's a question for his lawyer to answer. Oy.

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com

Photo: Elizabeth Weintraub

Elizabeth Weintraub is an author, columnist for The New York Times'-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

The home buyer sign calls I get in Sacramento start out like this:

"I was driving by your listing and would like to find out how much the seller is asking."

First, when you're an agent like me who is managing a couple dozen listings all over Sacramento, it helps to define which particular home the caller is inquiring about. Then I question whether the caller is a home buyer or an agent. Lots of agents don't identify themselves, for some reason.

After describing the property, I feel it is necessary to level with callers. I tell them upfront:

"The price this home is listed for and what it will sell for are two different things."

I realize they immediately jump to the conclusion that it's priced too high, but I point out that it is actually priced too low. I also explain that I have multiple offers but it doesn't mean they can't write a better offer. Then I refer them to one of my buyer's agents for follow up --  it's often not a dual agency situation that I want to jump into.

My sellers deliberately price their short sales below market value to attract multiple offers. So do other agents' sellers, btw. These lower-priced short sale listings -- and listings for Sacramento bank-owned homes -- get attention and do sell for much higher prices.

A buyer emailed me from Trulia yesterday asking me to let him know when the price of a certain short sale listing is reduced. It made me chuckle because I have 18 offers on that listing, all more than list price, some at 20% to 25% more than list price.

Another buyer called me on Mother's Day to ask if I'd write an offer for her on a home in Elk Grove. It was listed at $200,000. I ran the comps, which showed similar homes were selling between $330,000 and $350,000. She offered $305,000. The listing agent called me the following day to say he had received almost 50 offers and none but my buyer's offer had a chance in a blue moon of acceptance.

What I wonder is how is it that I was the only agent in that group to look at the comparable sales?

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com

Photo: Big Stock Photo

Elizabeth Weintraub is an author, columnist for The New York Times'-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

Everybody knows that short sales in Sacramento -- or anywhere in the country, for that matter -- can take a long time to close. That's happens mostly because some banks take forever to respond.

But most of my short sales get approval between 6 and 8 weeks. They all receive multiple offers. An unfortunate aspect for buyers, though, is when buyers have patiently waited for months to get approval on the short sale, some other buyer can sneak in and outbid them.

It happens. It just happened on one of my short sale listings. Now, you'll hear that all banks don't want multiple offers, but that's simply not true. You'll also hear that submitting more than one offer will hold up the short sale process, and that's a fallacy as well.

Here's a true story about how Sacramento Short Sale buyers lost their dream home at the 11th hour:

Let's say this Sacramento short sale home was listed for $300,000. We didn't receive a lot of offers, only two. One was, oh, $315,000 and the other, $318,000. We submitted both offers to the bank. Suddenly, after 3 months, we received another offer for $350,000 from a third buyer. This happened at the same time we received short sale approval on the $318,000 offer.

We sent the new offer to the seller and the bank. The bank ignored the offer. The seller was livid. Her rationale was why should she have to pay taxes to the state of California on a higher mortgage debt relief balance when she was offered a better price! I explained that the decision was hers, and if she wanted the bank to consider the other offer, she should call the negotiator, as would I.

Turned out the bank approved the $318,000 offer because the BPO was $295,000. The bank was worried the home would not appraise at $350,000. (Shows you how much those BPOs are worth, especially when calculated by an inexperienced appraiser.)

The question was did the seller want to take the short sale approval of $318,000 in hand or did she want the bank to reconsider the $350,000 offer? Time was of essence. We were scheduled to close in 4 weeks. A new approval could delay the process. The buyer's appraisal may be an issue.

In the end, the seller chose the higher offer and directed the bank to consider it. We resubmitted the higher offer to the bank on a Friday. Three days later we had the new short sale approval at the higher price.

During this time, I notified the agent who had submitted the offer for $318,000, to give her advance warning. I didn't want her to find out that her buyers were kicked out of the deal days or weeks later. That's not how I do business. The agent immediately submitted an addendum, increasing her buyer's price, but it wasn't enough to beat the other offer.

Sacramento short sale buyers, please be aware that this can happen to you. You can wait months and months for approval and, lacking specific language to the contrary in your contract, some other buyer can kick you out at the very last minute. 

The Short Sale Savior, by Elizabeth Weintraub, now available at Amazon.com.

Photo: Big Stock Photo

If you're looking for a Sacramento short sale agent, call Elizabeth Weintraub at 916.233.6759.

The biggest concern of many upside-down Sacramento sellers is whether they will owe taxes to the state of California on a short sale. It matters not whether the home goes all the way through foreclosure, reverting to the bank, or whether the seller elects to do a short sale, mortgage debt relief may trigger a state tax bill.

Some sellers have enough losses to offset the tax consequences, and some sellers qualify for insolvency, which can make them exempt from paying taxes. There are other exclusions. My advice is always the same: talk to a tax accountant, preferably a certified public accountant (CPA), because I am not licensed to give tax advice.

The tax liability from a short sale is the main reason short sellers want to get the highest price possible for their home, and it's the reason they want me to push for multiple offers and to continue sending offers to the bank even after seller's acceptance. Contrary to popular belief, continuing to send offers to the bank does not delay the short sale, unless, of course, the bank is Countrywide (and a handful of others).

I get short sale approval typically within 6 to 8 weeks, regardless of how many offers the bank receives. My job is not to dump the home in the lap of the first buyer who comes along. My job is to get the seller as much as possible, which may lessen the sellers' tax liability. Not every Sacramento short sale agent shares this sentiment.

If you're contemplating a short sale in Sacramento, you may want to follow Senate Bill 97 in the legislature. It was introduced January 26, 2009, by Senator Calderon, to amend Section 17144.5 of the California Revenue and Taxation Code. Senate Bill 97 is an attempt to conform to the federal Mortgage Forgiveness Debt Relief Act of 2007, which excludes mortgage debt forgiveness taxation on a personal residence. The bill extends those provisions from January 1, 2007 to January 1, 2010.

The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.

Photo: Big Stock Photo

If you're looking for an experienced short sale agent in Sacramento, call Elizabeth Weintraub at 916.233.6759.

It's true that FHA buyers in Sacramento sometimes get the bum rap, if you know what I mean. Especially when trying to buy Sacramento short sales. That's because many listing agents believe conventional buyers are better for the following reasons:

• The credit score requirements -- FICO scores -- are higher than those for FHA
• Buyers put down more cash
• Appraisers rarely call for minor repairs

However, the fact remains that on a short sale, much of the time by the time short sale approval is received, the buyer has gone south. That's such a funny expression: gone south. I hope it's not discriminatory and, if you think it is, I apologize.

So, I ask you, which buyer is likely to hang in there for the long haul? The FHA buyer -- with an offer that often contains a closing cost credit -- or a conventional buyer? Conventional buyers get the edge 9 times out of 10 and can qualify to buy anything they want. Are conventional buyers more or less likely to wait through the short sale?

I propose that FHA buyers may be more loyal if, for no other reason, than their options are limited. It's all cash in the end.

The Short Sale Savior, by Elizabeth Weintraub, coming May 15th

Photo: Big Stock Photo