Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

Real stories about real Sacramento short sales . . . brought to you by your Sacramento short sale agent, Elizabeth Weintraub.

There are home buyers in Sacramento who think short sale sellers are desperate. I don't know why or who feeds them this nonsense. But I have had buyer's agents send me offers that don't have a chance in a blue moon of ever being accepted, and I wonder why they do it.

I suspect some of the agents simply want to teach their buyers a lesson without being the bad guy. These agents have probably been in the business long enough to know that they risk losing the buyer all together if they come down too hard by expressing their professional opinion. It's a fine line we walk. Not every buyer cares about our professional opinions because, after all, they buy a home once or twice in their life and we do it every day, but they know more than us.

The fact is a short sale bank will get a BPO to establish value. The bank might even pay for an appraisal. Banks generally do not pluck numbers out of thin air. I tried to explain this to buyers via their agent. The buyers, we'll call them Buyers A, wanted to buy a pool home in Del Dayo, Sacramento. The sellers of this pool home had it listed with another real estate broker who could not close it.

When the sellers grew frustrated enough with that transaction, the sellers called me. They knew my reputation as a Sacramento short sale agent who gets the job done. I was confident I could close this. The sellers had already canceled their listing with the other short sale agent by the time they called me and were trying to decide between two short sale agents. I'm glad they chose me. They are very nice people who were stuck in a bad situation, like most short sale sellers. Their lender, Bank of America, was pretty clear about the price it wanted to allow this home to sell as a short sale.

We picked that price and put the home on the market. Buyers A and their agent called me and offered less than list price. The sellers rejected their offer. I suggested the buyers offer list price -- then, if Buyers' A's appraisal came in less, we would adjust. FHA appraisals are assigned a case number. This means the next buyer would get the same appraisal, so the bank would need to adjust the value or forget about selling for six months. No, Buyers A weren't that confident of their lowball offer. They didn't want to take the chance.

The thing is there is always another buyer in Sacramento who will buy the short sale.

Buyer B spotted this pool home and offered list price. She went into escrow. She paid for a home inspection and a pest inspection. Then, her appraisal arrived. The price on that appraisal was $20,000 less. We sent the request for a revised short sale approval letter to Bank of America, and the buyer's lender ordered her loan docs.

When docs arrived in escrow, the buyer canceled. Why? We will never know. Probably cold feet. At the 11th hour, Buyer B vanished. I chalk it up to the squirrelly market in Sacramento. Whatever was up with Buyer B, she still needed to live somewhere. The mortgage payment on this home was less than rent would be. But buyers aren't always sensible.

As a Sacramento short sale agent, I know that it's not unusual to have to sell some Sacramento short sales more than once. I'm in it for the long haul. I don't abandon my sellers. I called Buyers' A's agent. Before Buyers A could pop back into the game, Buyer C came along. The sellers had lowered the price to match the appraised value from Buyer B's appraisal. Buyer C offered the new list price and Buyer C closed escrow last Friday. Buyer C listened to her agent. Got a great deal on a pool home in Del Dayo. She bought Buyers A's home. Buyers A were there first. They could have bought that short sale home if they had followed their agent's advice.

A reporter named Whitney Mountain (real name, not making that one up) wrote a story for the Sacramento Bee this morning about auto theft. Whit that says our Central Valley is the worst in the nation for auto theft. California has the highest rates in the country. Sacramento moved from ranking at #11 to #6 this year.  Our rate zipped per 1,000 people up to 5.79. Think about it -- don't you know somebody (if it wasn't you) who has had his or her car stolen?

My husband had his Honda Civic stolen about 10 years ago. It was missing for several weeks before the police found it and, even then, they couldn't charge the little thug with stealing it because they didn't see him steal it. The thief was arrested for driving a stolen car. He disposed of my husband's CDs and replaced them with his own. My husband said he wanted to show up at his hearing and smash that guy's CDs on the table in front of him.

His car was never the same again. It always had a rank smell about it. Stuff rattled underneath. We eventually sold it and bought a Prius.

But a foreclosure or short sale house is a different story. Once a thief breaks into a vacant house and vandalizes it, the police aren't likely to bust the lawbreakers. Most of the time, a regular homeowner's insurance policy doesn't cover a vacant home. Vacant home insurance is expensive.

The thing many thieves are going after in Sacramento is the exterior AC unit. I've never much liked AC units on the roof because the installation can compromise the integrity of the roof, but right now those on the roof are probably in a safer place than the back yard. Several of my Sacramento short sales have been vandalized recently, and it seems to be happening on a more regular basis, or maybe i just have more listings so the percentage is skewed.

At a short sale home last week, they didn't even remove the unit. They trashed it, tore it into pieces, probably looking for copper, and left all of the pieces on the ground.

I went on a wild goose chase yesterday to meet with a seller from the Bay area who had called me on Sunday. At first I thought it was weird that a seller would call a real estate agent on a Sunday afternoon to ask for an appointment on Monday. I was right, she was weird. She kept saying the tenant just died, he just died, he just died on May 17th. Hey, May 17th was a month ago.

She couldn't get into the house because she had no keys. Her locksmith didn't show up, so she called another locksmith who couldn't get there for an hour at least. I knew she had a cellphone on her. I offered to call my locksmith who could probably be there in 15 minutes and charge her less, but she wasn't interested.

The yard was overgrown with thorns and weeds, but her AC unit was still intact. That was one thing she probably doesn't have to worry about, I assured her. Because my other listing 2 doors down had its AC unit ripped to shreds. If they wanted hers, they probably would have taken it when the iron was hot. I could see that she wanted to get back to eating lunch in the driveway with her companion. She urged me to leave and promised to call me.

Then she added another agent was due to arrive. Oh, really? Who? She couldn't remember his name but it was Doug something. Why she didn't call me when she knew we couldn't gain access was a primary question on my mind. Why? Because she had no regard for my time. I was expendable in her eyes. We're all expendable. We're just real estate agents.

Doug can have this listing.

But still, I hope they don't come back and swipe her AC unit.

Lyon Real Estate sponsored a luncheon yesterday for its top producers from our office in Midtown. This is an annual event that I've missed the last 4 or 5 years because of schedule conflicts, but yesterday, come hell or high water, I planned to attend. Turns out it was high water. The rain and flooding did not let up. Awful weather.

The wind turned my umbrella inside out, twice. That's how bad it was, and I only had to walk a block from my dentist's office on 22nd through the alley to 21st. We had lunch at Kupros Bistro, which is located on 21st Street between Capitol and L Streets on the alley. It's a 100-year fully restored and updated Craftsman -- a beautiful historic structure with stained glass accents, polished wood paneling and beams. It's a joy just to sit inside this building and soak up the vintage architecture.

I ordered a beet salad, made with fresh spring greens, red and yellow beets, and deep-fried goat cheese balls that melted on my tongue. Followed that delight with a beer-cheese macaroni dusted with crispy crumbs browned in the oven. I ordered it simply because I liked the name of the ale-cheese: Arrogant Bastard. But I could eat this for lunch every single day of my life and gain so much weight I couldn't fit through the door, it's that good. Decadent. The pan-fried mahi-mahi was just OK but cooked to perfection.

I sat across the table from an agent who works out of our office but is never there, sort of like me. Well, I do show up for office meetings on Wednesday but I rarely see this guy ever. He was telling me that he handles a lot of bank-owned homes and how the banks are not willing to promote their REO agents as short sale agents. No joke. And thank goodness for that. Being a Sacramento short sale agent is a lot more than knowing how to sell a property or rollover a mold-infested bank-owned piece of crap.

You don't just wake up one day and decide to become a Sacramento short sale agent because you've sold bank-owned homes in the past. Short sales are a specialty. They are complicated. And yes, in some situations, they are almost rocket science. The success of a short sale depends on so many different variables that all need to come together in one place. It's like blowing up a balloon -- if you squeeze one end, the other end gets big. You don't want to pop it. Short sales are delicate transactions.

I had a seller call me last week to say that Bank of America suggested she get in touch with me because I am a certified HAFA specialist.  Luckily, this seller has received preapproval for a HAFA short sale. Another seller called and said Wells Fargo recommended that she call me. Wells Fargo? And I've said so many awful things about Wells Fargo short sales, too. But I don't take any of it back. Wells Fargo needs some help in its short sale department. But all the banks do.

At least Bank of America is smart enough to figure out that it can sell those short sales at higher prices if it streamlines the short sale process to entice a buyer to make an offer. Buyers offer lower prices when they have to wait forever for that short sale approval. They'll pay more if the turnaround time is faster. Plus, B of A wants control over pricing, which is one of the reasons it rolled out its cooperative short sale program and evaluates every seller for HAFA. I love Bank of America short sales. And I recommend Kupros for lunch or dinner, too. Fabulous restaurant.

It seems that home buyers in Sacramento sometimes believe that dealing with a short sale bank is identical to dealing with a bank that has foreclosed upon a home, when the two types of escrows are actually quite different. There are different departments of the bank that handle these two types of transactions and different procedures for the escrow.

In a short sale, the bank is not required to let the seller sell the home. It is at the bank's option when it allows a buyer to purchase the home from a seller at a negotiated price. Banks that elect to sell their foreclosure inventory have made the financial decision to sell those bank-owned homes. Although banks are not supposed to be in the business of real estate, we all know they have ways of hanging on to shadow inventory. But generally speaking, banks do want to sell their foreclosure homes and are only open to discussing approval of a potential short sale.

Sometimes I hear buyers and their agents spout the mistaken belief that "banks are so stupid because they should take that short sale offer or the home will go to foreclosure." They complain: "don't the banks know that it's better to do a short sale than a foreclosure" -- and that's pretty presumptuous and arrogant thinking. Because no, it's not always better to do a short sale. It actually can be better for the bank to foreclose. The bank is doing the buyer a favor by allowing the short sale, not the other way around.

Yet, still, some buyers believe they can continue to negotiate with the bank after they receive the short sale approval letter. Unless the appraisal is lower, I've yet to see a bank renegotiate after short sale approval. As a Sacramento short sale agent, I close a lot of short sales in Sacramento. In a short sale, the home is sold "as is" which means no repairs, no credits, no price reductions, and the condition of the home is the condition of the home. If you don't want to buy it, don't. But don't ask the bank to reduce the price because the bank is likely to tell you to take a flying hike. The bank doesn't care that a buyer forgot to budget for new carpeting or that the roof is leaking.

When I receive short sale approval, I try to explain to buyer's agents that now they might want to remind their buyers the sale is "as is."  Negotiations are over. The sale is contingent upon inspections, and a buyer is free to cancel for just about any reason. But a buyer is not free to try to renegotiate because it ain't gonna happen. What a renegotiation is likely to do is to set the stage for that next buyer who's standing in line behind you. But it's not gonna help you.

Photo: Big Stock Photo

Pricing a short sale is an art. Although I try to explain to sellers how I arrived at the suggested sales price, most of them don't really care. As one seller put it, she's just the Monopoly piece. Because it's the bank that decides on the short sale price. The bank makes the decision based on the BPO. So logic would have it that if a Sacramento short sale agent would examine the comparable sales the same way a BPO agent does it, the acceptable sales price should be near the list price.

Earlier in the year, a list price could be under market and buyers would bid it up. In our Autumn real estate market, after the first-time home buyer tax credit has vanished, my list prices are inching up because offers are coming in lower. It's a always a juggling game, trying to stay one step ahead of the market in Sacramento. Sellers may now need to leave a little bit of room for negotiation.

I mention this because buyer's agents often help their buyers figure out how much to offer. Because buyers don't know. Some of them know beyond a shadow of a doubt that if a home is listed at $300,000, the seller will take $200,000 and so will the bank. It's a buyer's market. Everything is in foreclosure or it's a short sale. However, they are wrong. And here is how they find out they are wrong:

The home goes to foreclosure just when the buyer was expecting a short sale approval letter.

If the listing agent tells you how much the bank will take -- because either the agent figured it out or the bank shared its BPO results -- and a buyer decides to pluck some other number from thin air, that short sale is probably not going to close.

Sometimes, buyer's agents are astounded when my seller counters their offer. They can't believe it. Even though I try to explain that our goal is to close escrow, the words seem to fall on deaf ears. Maybe their real estate practice is based on throwing offers at the bank to see if any of them stick but my practice is based on closing escrow. Call me silly, but it just seems to make financial sense to close.

If your short sale goes to foreclosure, it's probably because your offer was too low and unacceptable. I hate to say this, but you weren't buying a short sale. You were waiting for foreclosure. There is a difference.

Photo: Big Stock Photo

It sort of surprises me that I close, on average, more than one real estate transaction per week in the Sacramento four-county area -- knock on wood. Times are tough in this industry. CAR Chief Economist Leslie Appleton-Young says home sales will shrink 10% this year, and predicts median home sale prices will increase only 2% in 2011. So why am I selling when other agents are leaving the business?

You know, I didn't wake up one morning and decide that I should challenge myself more. That I needed more adversity in my life. Like, I should sell every one of my listings at least 4 times. Yeah, that's the ticket. If I can sell a home once, I can sell it another 3 times. And maybe I should learn to appreciate elevator music because I should sit on hold, waiting for a bank's negotiator to pick up the phone. An hour on hold isn't that long. It might even be preferable to get used to being hit over the head with a sledge hammer, thrown into a tank full of sharks and repeatedly stabbed in the eyes with red-hot pokers every single day.

Because that's what being a Sacramento short sale agent is like. You take the good with the bad.

But I do look at what's happening in real estate in Sacramento. I try to keep my finger on the pulse and figure out trends; I look at where the market is moving and what is selling in the real estate market. When I hear bad news, it's upsetting, of course, but it doesn't mean that I will be out of business, regardless of the news. Well, if we had a nuclear war or that supervolcano at Yellowstone erupts, I'd be out of business, but short of that, it doesn't really matter to me what happens to the real estate market in Sacramento. I will adjust accordingly. I have a survivor instinct.

In August of 2005, when values started to fall, it was pretty obvious to me that buyers who purchased a home with 100% financing were up a creek. I was right, unfortunately. Right then, I decided to learn everything I could about selling a short sale. Over the past 5 years, I've acquired a wealth of knowledge, and it continues to change daily. What was true yesterday isn't necessarily true today. I decided that if I wanted to continue to sell real estate in a falling market, I needed to focus on short sales. I may joke about it, but I don't regret that decision.

If you're a real estate agent who is struggling, look around you. Somebody is selling something. What is it? Can you spot a trend? How can you get that business? If nobody is buying a new home because builders are dropping like flies, go into resale. Think about your marketplace. If financing dries up due to interest rate increases or FHA loans vanish, maybe you could learn about owner financing. There's always a ying to the yang. And if the real estate market has come to a screeching halt in your area, deader than a door nail, maybe you could move to where homes are selling? There's always something going on in real estate.

Photo: Big Stock Photo

It seems that every business is always trying to find a way to make a buck. One of the ways to make a buck is to maximize profit -- increase the amount of money that's already pouring into a business. For example, let's say you sell pencils for $1.00 each. If you increase that price to $1.01 and sell 50 million pencils a year, you've made an extra $500,000. But if you break that pencil in half and package it as 2 pencils at $1.25 per package, you've pumped another $1,250,000 into your business.

Don't get me wrong, I'm not against capitalism -- not like my mother, who passed away in 2002. I'm all for capitalism. My mother was a Marxist, which doesn't mean she was a communist, btw, but she wasn't exactly fond of capitalism. But there are some aspects of capitalism that I sometimes find exploitative, which I'll get back to in a moment. Let's just say that I don't worship a dollar bill. I'm not that kind of person.

Several of my closings this week are, of course, short sales. One particular transaction had been very troublesome. It involved Bank of America as a first lender and CITI as a second lender. Citimortgage pulls some pretty sneaky maneuvers. It's not unusual for CITI to issue a short sale approval letter giving the buyer 30 days to close but then CITI might also charge the seller a per-diem charge for every day over 20 that it takes the buyer to close. In other words, it gives the parties a 20-day escrow period and adds on a 10-day per-diem bonus to itself by demanding an additional seller contribution.

If you need an extension, well, that will cost extra, too. And then you've got Bank of America, which might not let the seller pay the per diem. In this Sacramento short sale, CITI was charging the seller $3,000 plus an additional $400 for a 3-day extension. Bank of America would not let the seller pay the $400, so the agents offered to split it. The seller offered to pay the agents back. Nope, no can do. I value my license. That's short sale mortgage fraud. Besides, it's worth it to me to cough up two hundred bucks to get the deal closed and over. The buyer was short on funds to close, so we paid some of those, too. You do what it takes.

That doesn't really tick me off. What ticks me off is United Airlines and some of the other transportation carriers. United Airlines has removed seating, shrunk it, and is now selling those seats back to consumers at a higher price. It is no longer comfortable to fly standard coach on United Airlines. Unless you enjoy being totally miserable, and you don't mind having your knees crammed up against the seat in front of you and in your face. Some people will call this brilliant strategy, but I think it totally sucks.

As a solution, United will sell you an upgrade to premium seating, which means you can get an extra 7 inches of leg room. You're still in coach, though. But you can move up to rows 1 to 12. Those rows are spaced further apart. For an extra $100 or whatever, you can fly in premium class, a class that United just pulled out of its butt. When I asked the ticket counter guy about upgrading to first class, he told me it wasn't worth it. What? Does he hate United Airlines, too? I'm not so sure that guy should be biting the hand that feeds him.

Photo: Big Stock Photo

The Sacramento Bee's real estate reporter, Jim Wasserman, checks in with me every now and then to ask questions about the market, and lately we've been discussing short sales. I mean, who hasn't been talking about short sales, especially in Sacramento where short sales make up more than half of the real estate market. I really like Mr. Wasserman. He's smart, witty and a darned good journalist. My husband is a journalist; my late mother was a journalist; my late father-in-law was a journalist; I've had my fair share of newspaper assignments, so I'm intimately familiar with the occupation.

Mr. Wasserman wrote a very entertaining and truthful article yesterday about Sacramento short sales. Of course, most of the comments that follow that article are political, with conservatives bashing liberals and vice versa. But Mr. Wasserman also included a link, with my assistance, to the short sale path. It accurately describes the steps to a short sale. But it doesn't ease the pain many buyers feel when they are trying to buy a short sale.

For some buyers, short sales are indeed a nightmare. It's even worse if their agents don't understand what's going on. I get a lot of calls from buyers throughout the country who feel that there is something they should be able to do to speed up the process. They ask if they can call the bank or speak with a supervisor at the bank. I understand. I empathize. I know first-hand the frustration. However, there is little that a buyer can do. The buyer, as Mr. Wasserman so aptly notes, is just along for the roller-coaster ride.

But, let's face it, if the buyer isn't on the ride when it comes to a stop, the ride was for naught. Because typically that short sale process will start over. It's important to keep buyers engaged in the transaction and informed. A Sacramento short sale agent, like myself, will be successful if that agent develops systems to involve the buyer. On my website, buyers can follow the progress of their short sale. I give them Sacramento Short Sale Listing Status.

Every time something happens on a file, bam, I post it. When a negotiator is assigned, the buyer is informed. When a BPO is performed, it's noted. If I feel that we are close to short sale approval, I indicate that. If the lender requests updated financials from the seller, the buyer knows about it. If a short sale buyer is searching my listings and sees a short sale is still on the market after six months and rightfully wonders what is wrong the home, that buyer can look at the entire history and know exactly what happened. The length of that listing is probably due to a buyer who flaked. Fortunately, that situation is becoming less likely to happen these days as short sales are getting approved much faster this year than over the past 4 or 5 years. Still, a buyer has gotta have patience and nerves of steel. It's a bumpy ride for most.

I met the sellers of this new short sale in Fair Oaks about 4 years ago, back when they were first-time home buyers. I had purchased a rather expensive item from an establishment the seller managed and mentioned I was in real estate. A year later, the buyers remembered me and called. We looked at homes. We wrote 13 offers. Count them, 13 offers. More than I've had ever had to write in my life for a buyer.

Then we found this home in Fair Oaks. The then-seller of that home paid for a brand new roof and gutters. I remember shooting a photograph of the ecstatic buyers standing in front of the JUST SOLD sign. They gave me a succulent plant that has grown to over 5 feet in my Land Park cactus garden.

And today, they are selling this home in Fair Oaks as a short sale. Their loss is not as substantial as most of my Sacramento short sales, but like most short sales, the sellers' circumstances have changed. This is my first short sale in 5 years that is a previous client's home, so this is a bit difficult for me. It's worse for them, I assure you.

This is a 3-bedroom, 2-bath, ranch-style home. It has a formal living room and dining / family room combination. The kitchen counters are tiled, and you'll find beams in the family room with a Roman brick fireplace. The home was built in 1959 and has mostly hardwood floors throughout.

The washer and dryer are in the garage, and they stay with the home. There is also a separate room in the garage that can be used as a den or a hobby room. It has a gigantic yard at .23 acres with an uncovered patio.

Best of all, this is a preapproved price from Wells Fargo, and all the paperwork has been submitted. The only thing we need to move forward is an offer from a qualified buyer. I'd expect short sale approval in fewer than 30 days.

8814 Mohawk Way, Fair Oaks, CA 95628 is offered exclusively by Lyon Real Estate as a short sale at $180,000. For more information, call your Sacramento short sale agent, Elizabeth Weintraub, at 916 233 6759.

Photos: Elizabeth Weintraub

Not all of the time, of course, but every so often in one of my Sacramento short sales, I get stuck with a negotiator who has a bug up her butt. I use the feminine sense because it's generally a woman who is underpaid, undervalued and overworked at the bank, but it could just as well be a man, too. Although, English may be his second language. Because it's no secret that women and minorities often get the short end of the stick. But I digress.

The point is sometimes a Sacramento short sale agent may find that it's best to let go to win. Bank negotiators are famous for uttering those scary words: If you don't do X by X deadline, I will close the file. If I were in their shoes, I'd probably say the same thing. Who wouldn't want to reduce that pile of 500 files down to 499?

It's difficult to juggle a short sale file when you've got one or more sellers, a buyer's agent, one or more buyers and, if it involves fees or financing, an escrow officer who needs to prepare a new HUD. If one of those parties is computer deficient or unavailable for some reason, you're hosed. You might not get 4-hour turnaround for an addendum or other newly signed document.

I have an active contingent short sale at the moment that had 3 IRS liens filed against it. We managed to get 2 of the liens released. The third IRS lien needs a release so we can get approval from Wells Fargo. We sent the appraisal completed by Wells Fargo to the IRS. However, the IRS wants the signature page of the appraisal. Wells Fargo won't give it to them. It won't release the document the IRS requires to give Wells Fargo the document it wants. It's a Catch-22. On top of that, Wells Fargo is insisting that we produce the release in two days or it will close the file.

The icing on the cake is the IRS won't issue an opinion. The seller and title both have called the IRS. The response received from the IRS is it will look at the file when it's good and ready to look at it. There is no priority at the IRS. Well, you expect that kind of attitude from a government with a mind-boggling budget deficit that has spun out of control but not from a struggling banking institution that is accountable to stockholders like Wells Fargo.

Go ahead. We'll open a new file and the seller will pay for an independent appraisal, which will contain a signature page for the IRS. And we'll get a new negotiator assigned at Wells Fargo who will work with us to get this short sale closed.

Photo: Big Stock Photo