Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

It's a little bit difficult to figure out if a home is offered for sale as a foreclosure flipper in Sacramento. Because when I examine the tax records to determine transfers and who is in title, it might be a mortgage company that acquired title through a trustee's deed. Such a transfer may lead an agent to believe it was foreclosed upon by the bank, but the opposite may be true. It may have been acquired by an investor.

Do you wonder where some of the shadow foreclosure inventory is hiding? Some of those homes are sold to investors who flip them.

When I find a title transfer on a foreclosure like this, I search the name of the entity that purchased the foreclosure home through the tax records and often discover the purchaser is an investor who is buying a lot of foreclosures, either at auction or through a private deal made by the bank. Agents can also get a clue if the listing notes: no FHA buyers, due to the 90-day seasoning requirement.

The nice thing about buying a Sacramento foreclosure from a flipper is the investor will often pay for a pest report, a home warranty and credit the buyer for closing costs or major repairs. Buying a foreclosure from the bank generally means the buyer is purchasing the home in "as is" condition and doesn't offer those types of benefits.

I ran the comparable sales for a Sacramento buyer who was contemplating making an offer on a foreclosure flipper. The comps clearly showed the listed price was under market value by at least 25%. The buyer made an offer, it was countered and he accepted the countered price, which was less than the list price.

Sure enough, when the appraisal came in, it showed the home was worth 20% more than the buyer paid for it. Appraisers are extremely conservative these days and, if they feel pressed, with no other option for value, most of the time the higher appraisals will come in 2% to 3% over the sales price, even if it's worth a lot more. Why rock the boat?

I was stunned to see the appraisal at 20% over the purchase price. Kinda weird to see my professional opinion of value substantiated for a change. This doesn't happen very often.

Elizabeth Weintraub is an author, home buying 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.

Photo: Big Stock Photo

One of the coolest birthday presents I have ever received was a wind chime made out of tiny, ceramic, hand-painted houses. Because my friends know that real estate is my passion.

I met a buyer last week who is the same age as me. Let's say her name is Patricia. She called to say she was looking at Lyon Real Estate's website and I was the first agent she called. Joking around I replied, "And lucky for you, I'll be the last agent you call."

Patricia had found a specific home that caught her eye and called the listing agent. He was rude, she said, and refused to show the home unless Patricia was prequalified through a lender. We talked about her search for a new home, the Sacramento neighborhood she wanted, why this particular home met her needs, and I referred her to a mortgage broker for loan preapproval.

The following day we met at the property, with preapproval in hand. Patricia is a bird lover, just like me, except I don't have birds tattooed on my legs. The home she wanted to buy was a flipper, bought by an investor either at auction or through a bulk REO purchase. I had researched this property for her because it's tough to pick a purchase price on flippers.

I ran the seller's name through the tax rolls and discovered this seller had purchased over the last year 37 foreclosure homes. Then, I printed out a report from MLS showing every home the listing agent had sold over the past 6 months for this seller, which were 9. Of the 9 sales, 7 were at 100% of list price. One sold at 102% and 9th at 97.8%. From those numbers I concluded that Patricia could most likely buy that home at 2% less than list price.

But to reach that price, I suggested that she offer 5% under list price. We were in a multiple-offer situation, too, because other buyers wanted that home as well. Sacramento home buyers don't always have to offer more than the listed sale price to win the home. Acceptance depends much on the seller's motivation and other factors.

The home had been recently updated, but it wasn't completely finished. There were minor things that still needed to be completed. Stuff like installing an exhaust fan, replacing a window sill, caulking around the tub, trimming out a window, reviving a dead lawn and attaching receptacle plate covers over outlets.

We sat on the living room floor under a ceiling fan to sign the offer. I showed Patricia the comparable sales, which were 15% more than the price I hoped she would get. I showed her the print-out of the seller's sold homes, too, so she could see the ratios of list prices to sold prices. But we also talked about a bunch of other stuff.

Patricia made the comment that I obviously was a lot younger than she. I laughed. She is 56. So am I. Until today, that is, because her birthday isn't until winter, which makes me older than Patricia.

She also said that she really did not like the listing agent because of his attitude. Hey, I pointed out, I told her the same thing, that she needed to be preapproved, but I must have conveyed that message in a different tone.

"This home needs so much work," she lamented, as we walked around the home for a final inspection. Patricia had not seen other homes in that price range, nor the horrible conditions of those homes. In comparison, this home was turnkey. She asked if it's unusual for a buyer to buy the first home a buyer sees.

Actually, it's not unusual at all. It's also not unusual to ask that question.  I'd say about 1/3 of my Sacramento home buyers pick one home to see and that's the home they buy. Probably because buyers are smarter these days and do a lot of their homework upfront. They pour over MLS listings online and know exactly what they want. Sometimes, they don't give themselves enough credit.

Later that afternoon, I emailed and faxed Patricia's offer to the listing agent. I included a note that pointed out the benefits of accepting Patricia's offer and mentioned that my buyer would take care of all the little unfinished items. I reasoned that other buyers would demand the finish work. And it was so minor. It could mean the difference between irritating the seller or getting the offer accepted. I explained my rationale to Patricia. She agreed.

We received a multiple-counter offer the following day. A multiple-counter offer means the seller has countered more than one buyer. The counter offers can be completely different from one another and, even if each buyer accepts the counter terms, the seller still reserves the right to select which offer will be accepted.

Sure enough, the multiple-counter offer was at 2% under list price. I tried to temper Patricia's excitement because it ain't over until the fat lady sings (meaning the seller accepts it). There was no guarantee that she would get this home, and I didn't want her to be overly disappointed.

I am happy to report, however, that Patricia got the home! The listing agent called to say that Patricia's offer was accepted, and he emailed the accepted multiple-counter offer and contract to me. I called Patricia to share the good news, who is still talking about "all the work." But she's thrilled.

And that's my birthday present to myself today. To win a home for a deserving home buyer that's priced 15% under the comparable sales, in excellent condition and to beat out other buyers in a multiple-offer situation.

It's funny, after all my years of selling real estate, I still get excited for my buyers. That's probably why I am still in this business.

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

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. 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.

Photo: Elizabeth Weintraub, 35 years ago on June 28, 1974.

The reporter made it sound like this would be a special edition to the news. I was expecting a 5- to 7-minute in-depth study of the real estate market in Sacramento. Especially since filming took a solid 45 minutes.

Not surprisingly, it turned out to be a 1:51 minute video. But at least he backed off from his original premise and ran with the real story of Sacramento foreclosures.

Here is the link to Cheap Homes for Sale in Sacramento. Look below and scroll down, and you'll find this clip somewhere. If you can't find it, then enter the keywords in the search box. One's 15-minutes of fame lasts about 3 hours online at a news web site.

The Short Sale Savior, by Elizabeth Weintraub, coming June 2009.

Video clip: Fox40 News, KTXL, Sacramento

If you're looking to buy a short sale or bank-owned home in Sacramento, call Elizabeth Weintraub at 916.233.6759.

Why is it that everybody but the Sacramento media seems to know that for homes under $300,000, the Sacramento real estate market is a seller's market with buyer's market pricing? When I talked to the reporter from FOXNews yesterday, he was appalled when I gave him the stats from Trendgraphix.

First he waved a newspaper ad at me that screamed Bank Foreclosures in the headline, listing 50 or so homes. A few homes were priced under $25,000. "What about these?" he asked. "Can anybody buy this home for $25,000?"

Most likely, I answered, somebody already did. By the time you read about it in the newspaper, that home is gone. Notwithstanding, many of the homes around it may be boarded up. That home may have the copper plumbing torn out, the Romex ripped from the walls and no appliances.

The biggest problem facing buyers in the under $300,000 market in Sacramento is no inventory. There is very little for sale. If an attractively priced home in a desirable location comes on the market, it will receive multiple offers. Pricing doesn't mean much because many of the list prices are below market value. Buyers bid up that price.

It's sort of like feeding the ducks at McKinley Park. You toss a few bread crumbs in the water and 30 ducks come swimming, pecking at each other, pushing the smaller ducks out of the way as the bigger ducks jockey for the food.

An agent in my office called on Sunday to ask if I was planning to write an offer on a house her buyer wanted. She saw my card at the house. She knew the home was underpriced. Trying to be helpful, I attempted to discourage her from making a bid for her FHA buyer because my buyer was paying cash. And cash wins. There were dozens of offers on that house, and my buyer did indeed win the offer.

Take a look at the chart above. It shows the REO Market in Sacramento over the past 15 months through February. Look at what happened in February: the pending sales have surpassed the homes for sale. Pending sales in February of bank-owned homes totaled 1,377. The homes for sale are 1,339. If you want to buy a bank-owned home in Sacramento, my advice is to jump into the pond and start fighting before all the bread crumbs are gone.

The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.

Image: Trendgraphix, licensed exclusively to Lyon Real Estate agents.

Today's Sacramento Business Journal reports that Sacramento ranks #10 in foreclosure filings in the U. S. In fact, eight of the top 10 metro foreclosures in the country are happening in cities in California. I just posted how Sacramento inventory has been continually dropping since early this year and, in fact, has fallen more than 35% since the same time last year.

So where are all those foreclosures you keep hearing about? Well, in truth, not every Notice of Default results in a foreclosure and the majority of those are reinstated. However, there is no inventory. By no inventory I mean we have fewer listings of attractive and well priced homes in desirable areas.  Almost every REO (bank-owned) home is receiving multiple offers. It's such a competitive market right now that some buyer's agents are saying to heck with running after REOs and are instead chasing the short sales, which attract less attention.

When I was at a closing this week, the signer who worked at a small bank shared with me that banks are sandbagging the REOs. They aren't releasing them all at once because they want top dollar. The REO lenders are hanging on to their inventory and slipping a few each week into MLS to continue to drive up the demand. That makes sense, when you think about it, doesn't it?

Photo: Big Stock Photo