While I was researching short sales in Sacramento for a client this morning, I noticed my MLS profile needed an update. So, I clicked on it to make the change. At the very bottom is a place for additional languages. I typed in Klingon. Well, I don't really know any Klingon words, so I erased it and typed Pig Latin. Hit the Save button. Apparently, Pig Latin is not a recognized language because MLS would not let me save it. Those MLS programmers, always looking out for practical jokers, I guess.
The listing my client asked about is a short sale home in East Sacramento. It is listed for, let's say, $399,000. This buyer can't go above $350,000. He wanted to know if he could buy that short sale for $350,000. Lots of buyers these days seem to think we are in a buyer's market. I suppose they have difficulty interpreting the market because newspapers and TV yak constantly about foreclosures and short sales. But with falling inventory (we've lost about 2/3rds of our inventory over the past couple of years) and rates below 5%, it's a seller's market in many Sacramento neighborhoods.
I researched this East Sacramento short sale. Looked up the owner's name, which sounded familiar, in Realist. Googled the owner. Yup, the owner is a real estate agent. And the owner / agent works at the same company as the agent who listed this short sale. I read the owner's blog. The owner / agent talked about not really understanding short sales nor believing that they close. Those are all bad signs.
Then I looked up the owner / agent's sales production in MLS for last year. The agent qualified for Master's Club. Doesn't appear to be hurting financially. I ran the name in the tax rolls. The owner / agent owns quite a few other homes in Sacramento. It would appear that the owner / agent may not have a hardship and may not understand that a hardship is generally required to do a short sale. I could be wrong, but I'm probably not.
Well, maybe the owner / agent's real estate buddy has short sale experience? I entered that name as a listing agent into a search for all sold properties from January of 2009. Not a short sale among them. I can tell by the DOM. If the listing agent has never closed a short sale, that's a red flag because the listing agent controls the entire transaction.
I have sold several homes in this particular three-block area, some of which were my own listings, so I know it pretty well. Well enough to know that the market value of that home is more than $399,000, so the bank will probably reject offers at list price. This means a lowball offer won't stand a chance.
I presented this information to my client and asked: "Do you really want to buy that East Sacramento short sale?" I have a feeling he's going to say Ixnay.
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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.
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Ootay Adbay. Onay Igpay Atinlay...and a seller without a clue. To be nixed on the Pig Latin and to have such a clear case of an agent/seller without a clue is a sad day indeed. It's sad that everyone in the industry isn't better informed about the hardship issue. This isn't the first case I've heard where the seller is affluent enough to take the loss themself.
Elizabeth, quite the sleuth, aren't you? Can't get away with anything? Love the pig latin - how about double dutch. Enjoyed your post. ;-)
Dave: Otay eckhay itay, is what the buyer will probably say. Although a hardship is not always necessary, and more often than not sellers are bringing cash to settlement these days, the price is unlikely to fly. That's the biggest problem with this scenario. I mean, I often list my short sales under market to attract multiple offers, but this client can't afford the list price.
Teri: Beats pounding the pavement on lost causes. I always do research for my buyers. Plus, it saves on buying new shoes, although you couldn't tell that by looking in my closet. I'm worse than Imelda Marcos.
I had to stop and laugh a while before reading the rest of your post. My mom used to speak fluent pig latin to mess with her younger brother and sisters. Of course she and my father also wrote love letters in morse code as well. (Can't wait to get my hands on those one day and translate them). And sounds like you will need to find another home for this buyer as the seller. because when the owner/agent talked about not really understanding short sales in their blog, I'd say your research proves them right, they don't understand them TAAY LLAAY!
Elizabeth, I was just thinking what Teri said when reading the blog. It shows your knowledge of the neighborhood, along with your keen instinct for when something just doesn't add up.
Elizabeth - LMAO! I actually read the first paragraph twice because it was so funny. You're such a great story teller Elizabeth. LOL at your buyer too. It's just amazing how many buyers still think they can low-ball below market priced homes. Around here, that is just what LA's do to generate bidding wars.
Elizabeth: I don't know why agents don't understand that short sales will need to be in the ball park of market value. The banks don't volunteer to take more of a bath than they are already taking. This sounds like a bad situation. Too bad the listing isn't yours. They would have a much better conclusion. As it sounds now, thye are gearing up to waste a lot of time.
Elizabeth - Those darned computer software programmers don't have much of a sense of humor do they:-) It would be interesting to watch that particular listing to see how it emerges out of an escrow.
All the time spent researching the property saved both you and the buyer a lot of time.
Nice job of researching the details of that deal. It pays to spend some time to save a whole lot of time later.