Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

Because I receive so many phone calls throughout the day, it's sometimes difficult for me to answer my cell when it rings. This means callers often end up having to leave a message. I'm only one person and can't be on two phones at the same time. To deal with this situation, I have my team member's name and phone number listed first in MLS. This way she can talk to buyers and buyer's agents for me, freeing up my time to deal with other Sacramento short sale business.

However, every so often, I get a buyer's phone call. The first thing they ask is "How much is that home listed for?" Well, I have to answer them honestly. I know they expect me to throw out a number, but that number has variables to it, and I feel compelled to explain. Because list price and sales price can be two very different animals in a short sale.

That short sale can be listed under market value, at market value or even above market value. It depends on the type of property, location of home, whether it's a seller's, buyer's or neutral marketplace, the type of short sale: FHA, regular or HAFA short sale, among other factors.

In addition to all of that, I have a fiduciary duty to get the highest price possible for the seller. I can't tell a buyer to offer less. I have one short sale in Sacramento, for example, that is in escrow at more than $100,000 above list price. Another Elk Grove short sale received more than 15 offers.

While I would never discourage a buyer from writing an offer, sometimes I have to wonder where buyers get their prices. A buyer yesterday wanted to offer 50% of the sales price. Now, I realize that some of us come into life with all of our brain cells intact and some of us lose a few brain cells along the way; however, some of us should not be allowed to wander the streets alone unsupervised. But we can thank Ronald Reagan for that.

Photo: Big Stock Photo

People often don't pay attention to warnings. That's because sometimes we look at them in jest, like Lost in Space: Danger, Will Robinson. I can advise sellers that the price of their short sale is too low, but they ultimately set the price, not me. I can also tell buyer's agents that they need to pull the comparable sales, but that advice often falls on deaf ears.

As a result, sometimes I can end up with a short sale listing priced way too low to attract any type of decent offer. Agents who don't work in short sales don't understand that banks aren't giving away these homes. Buyers look to their agents for guidance but often those agents say, "Offer whatever you want."

I feel like I can argue until the cows come home but they don't listen. And of course, when the bank rejects the offer, you know who they look at.

All of Bank of America's short sale emails that contain a short sale approval letter arrive with this disclaimer:

* Counter offer acceptance is subject to senior management approval, mortgage insurance and /or investor approval

The only time I have ever had a short sale approval revoked is the one time that neither the sellers nor the buyers heeded my advice. Usually I can get one party to cooperate. But this time, neither of them would. And now I can see why Bank of America puts this disclaimer into its emails. Well, at least I learned something new.

Yup, Bank of America can approve a short sale and then withdraw that approval.

Photo: Big Stock Photo

Getting down to the final stretch in a short sale means the beginning of escrow. Sure, escrow was opened who knows how many weeks or months ago when the buyer deposited earnest money funds, but during the initial stages, mostly the buyer is waiting for short sale approval from the bank. As a Sacramento short sale agent, I do twice the work as a regular real estate agent because of all the upfront negotiating with the bank, document collection from the seller, multiple BPO visits and sometimes having to replace buyers who keel over in the middle of the road along the way.

For that reason, it's generally delightful news when the buyer's appraiser calls to gain access for the appraisal. It means we're almost to the finish line.

An appraiser called to make arrangements to gain access to a home in Sacramento on Wednesday. No problem, it's now vacant with a lockbox. He trucked on over and couldn't find the lockbox. He called back on Thursday, asking where else I would have put the lockbox. Now, I am absolutely positive that the home has a lockbox. I suggested he look in the usual spots. Shoot -- how am I supposed to recall when I manage in inventory more than 30 short sale listings at any given time, and I had listed this Bank of America short sale last August (pre-Equator.com days)?

Think. Think. OK, I conjured up an image of me standing in the kitchen, talking to the tenant, removing the bottom of the lockbox and testing the key in the door. Plus, I verified that the lockbox number had been recorded and attached to this listing in MLS. I know I put a lockbox on that home.

Well, the buyer's agent had shown the home several times before writing an offer. Maybe she recalls where that lockbox is hidden? That idea led to a dead end. The agent said the tenant was always home and had let her in.

I tracked down the tenant who had since moved out. Oh, she forgot to tell me. The lockbox was on the front door, but the front door had been broken for some reason (man, I hope nobody kicked it in . . . like the police) so her husband had replaced the door. Well, criminy. The tenant returned the new key and the lockbox in time for the appraiser to finish his job.

The lesson learned here is next time an appraiser can't find the lockbox, I'll ask if the door looks new.

Photo: Big Stock Photo

What's worse? Stumbling out of bed in the morning and stepping into cat puke or finding out the preapproved buyer for your short sale is not really preapproved? I tell you what, I'll take the cat puke between my toes.

You might ask how something like this can happen when the listing agent is holding a preapproval letter from Wells Fargo, and I'll tell you what every agent knows. Many preapproval letters aren't worth dirt.

Five months ago, I received an second offer on one of my Sacramento short sale listings. We had previously been in escrow with a buyer who walked away a few weeks before we received the short sale approval letters, so I had put the home back on the market. Along comes buyer #2. This buyer is a real estate agent who had been waiting for this particular model to come on the market. It was the buyer's dream home.

When I received the offer, I had to rewrite it in the form of a counter offer for the buyer because it was totally messed up. The buyer put down a sizable earnest money deposit, and we went into escrow. This short sale took a long time to approve because we had to negotiate out a seller contribution to the second lender. Two loans on a short sale typically mean more work and delays.

We received the short sale approval letters last week. This is when the buyer confessed to losing a co-signer. You know, when something just doesn't feel right, I always listen to my intuition. In this case, I was right. I asked the buyer to speak with my mortgage broker.

Come to find out, the buyer has a back-end debt ratio of 76% and also owns a home that is under water. This buyer can't afford to put food on the table much less buy a new home. You'd think that the first thing a loan rep from Wells Fargo would check, beyond the FICO score, is the debt ratio. How much do you earn and how much do you owe are 2 standard questions. How much the borrower's home is worth is the next question.

There are just so many ways from Sunday that this buyer should not have been approved by Wells Fargo. Just goes to show that there is a reason that agents prefer to work with certain mortgage brokers. We can trust those preapproval docs.

Excuse me, I've gotta go clean up some cat puke.

Photo: Big Stock Photo

As a Sacramento short sale agent, I realize that just when I'm about to think I've heard it all, another challenge will present itself, practically daily. Selling short sales is a complicated business -- anybody who claims otherwise doesn't sell short sales.

After working with Flagstar Bank on a Sacramento short sale for 45 days, we were suddenly informed that the file was being outsourced to Sterling. Upon calling Sterling, we were told that National Quick Sale would be handling the file.

This particular short sale involves a Fannie Mae loan, which means the lender cannot discount our commission any less than 6%.

The next thing I know, a negotiator from National Quick Sale, based in Jacksonville, Florida, called me. She acknowledged the Flagstar loan was held by Fannie Mae, verified that we would receive full commission and then informed me that National Quick Sale would collect 1% of the purchase price, in addition to an admin fee.

National Quick Sale's fee structure is as follows:

"1)     Technology fee - This fee is 1% of the purchase price and is to be reflected on the HUD1 in the commission breakdown.  This fee is only payable at closing, if the property does not close then no fee is due.

 2)    Administrative fee - This fee is $250.00 and is also to be reflected in the HUD1 in the commission breakdown.  Again, this fee is not required if it does not close."

What is a technology fee? It's not a commission. Seems as though this may violate RESPA. Moreover, a recent court ruling determined that charging an administration fee is prohibited because it's paying the same fee twice.

Does anybody have any information on National Quick Sale or comments about its policies?

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: Elizabeth Weintraub, Sacramento short sale home