I advise my sellers to talk to a real estate lawyer before putting that Sacramento short sale on the market. Especially if their grant deed reflects non-owner occupants in title. Because when the prelim is issued, all owners of record may be required to participate in the short sale. The lender may require it and / or escrow may require it.
Some sellers don't remember the details of when they bought their home or how they acquired title. This is why I always check title before taking a listing. In California, for example, all parties need to convey their interests to sell a home but the signature of all parties is not required for the listing agreement.
About 10% of my short sale listings involve multiple owners on record who don't live at the property. These people are either family members, who probably helped the owners qualify for a loan when they bought the home; friends who became roommates to make the mortgage payment more affordable and then moved out, or even significant others who have long since parted. A short sale is much easier if these people get off title.
It's not difficult to record a quitclaim deed in Sacramento. It needs to be prepared correctly, but a title company, escrow officer or lawyer can draw a quitclaim deed, obtain signatures and record the quitclaim deed in the public records for a very small out-of-pocket fee.
If you do this upfront, before signing a purchase offer, it may relieve you of a possible headache at closing. I was able to push through to short sale approval a situation where two people are on title without the second person's cooperation. This is a Bank of America short sale involving 2 original Countrywide loans, the worst kind of short sale nightmare possible.
Both of the sellers were not speaking to each other throughout the transaction. It was a bit of a struggle to clean up all the paperwork at closing and juggle the two signings. There is also possible liability that could transfer to the individual who is still in title but not in possession, but I had no contact with the second party.
The good news is this is scheduled to close next week. Providing the Bank of America representative stops yelling at the poor escrow officer and returns the stinkin' HUD on time.
For comparison, I closed two other Sacramento short sales this week. Both of those were relatively fast, from listing to closing, about 60 days. But neither of those short sales involved title problems. This Bank of America short sale, however, has been presenting challenges since April. As a Sacramento short sale agent, I think President Obama should give me and every other short sale agent out there a Purple Heart for surviving Bank of America short sales.
Photo: Elizabeth Weintraub
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Certified HAFA Specialist
My Sacramento Real Estate Listings
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 the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
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Elizabeth: There is something extra special about settling a BOA short sale. They are what my Mom would call *** draggers.
You deserve a standing ovation. Great Job Elizabeth! Now go and celebrate!
Elizabeth - This is precisely why we did NOT take a short sale listing this week. When we spoke with the seller, we found out her husband left 10 months ago and she didn't know where he'd gone to. Since he's on title, we'd have one heck of a time completing the short sale. With only 45 days to go before the courthouse steps sale date, there were just too many 'what if's in her scenario, and the best we could recommend was a deed in lieu.
Not too long ago I had a couple contact me about selling their home, as it turns out when I did my research it wasn't their home. They had quit claim deeded it to their children. Of course the children could sell it, but until I told them to contact an attorney and CPA they were all unaware the children would then have to pay capital gains on the profit. How title is taken and handled is SO important.
Elizabeth,
Purple heart is a very interesting idea. We are working on a closing with Bank of America, and it is so difficult. They squeeze every penny, cutting everything. Not more than this amount for Title search, not more than this amount in commissions, nothing for the Attorney, and the list goes on. Plus they want extra $10K from the Buyer for a home listed at $140K and the BPO supports it.
Talking about Purple Heart (LOL)
Bank of America has no idea how to be a seller they think everyone will just wait until they are ready to allow us to close.
Hi Chrisianne: I might have offered to track down her husband. You can find just about anybody.
Hi Tammy: So I take you had the kids sign the listing agreement? LOL.
Hi Jon: Been there and done that. You should get 10 Purple Hearts!
To everybody else: Doesn't it sort of annoy you that the CEO of Bank America, Ken Lewis, is getting a $53 million-dollar pension when he retires at the end of the year?
Good advice. All my short sales are coordinated with an attorney.
Elizabeth - Having title pulled initially is a great idea. It is also encouraging to hear that you are having success with a 60 day contract to close on other transactions with different banks!