Club Chaos Agents - All Things Hollish, Wacked, and Jacked

I almost threw my wedding ring down the toilet yesterday. We all do doofus things from time to time, but most of us don't talk about it. That's because we don't like to put ourselves out there on the chopping block. Unlike me, who will share the doofus things I do in hopes that I can prevent someone else from making the same kind of stupid mistake.

At the moment, I have bandages on three fingers. That's because in a hurried moment I set my hot flat-iron in the wrong direction on my vanity. I grabbed my hairdryer in one hand and the flat-iron in the other. Instead of picking it up by the handle, I clutched the hot end. Yowsa. I immediately dropped it by instinctively flinging it, and my wedding ring flew across the room with it. This is why I'm pleased that I am one of those people who habitually not only puts down the toilet seat but closes the cover.

There is always a silver lining to any catastrophe when you're a Sacramento short sale agent. You've got to keep a positive outlook on things. Because when you look around, there really is a lot to be happy about.

I am very happy and pleased to introduce you to my new listing in the Riverlake Homeowner's Association of Stillwater in the Pocket of Sacramento. This is a beautiful one-story home, built in 1990, and located within a prestigious gated community. When you drive through the gates, you're greeted by a gorgeous lake. The home sits at the end of a private cul-de-sac.

It has high ceilings, a rotunda in the formal dining room, vaulted wood ceiling in the family room and an open floor plan with mostly hardwood floors. The home features 4 bedrooms and a home office: 3 bedrooms in one wing and a guest bedroom in another wing. It also has 3 baths. The master suite bath has a marble floor, dual vanities, a separate shower, and a sunken, jetted tub. Several other nice features are the giant walk-in closet in the master and its diagonal vaulted ceiling, plus outside access.

There is a breakfast nook in the kitchen, tiled counters and tons of cabinets and storage space. For your convenience, you will find a trash compactor, gas cooktop, built-in convection oven, dishwasher and built-in microwave, in addition to a breakfast bar. Two cooks could easily share space in this enormous space. The square footage in this home, according to the county records, is 2,820 square feet. It also has a 3-car tandem garage with a drive-through, which offers additional parking in the yard.

The yard is professionally landscaped with a water feature. Most of the patio area is covered and shaded. The fence is brick, and the lot size is .21 acres, according to the public records.

8 Water Reef Court, Sacramento, CA 95831 is exclusively offered by Lyon Real Estate as a short sale at $499,000. For more information, call your Sacramento short sale agent, Elizabeth Weintraub, at 916 233 6759.

Disclaimer: This home is listed in MLS on September 1, 2010. If you are reading this blog months from now, this home is most likely in escrow, waiting for short sale approval, or the home has closed escrow. It could also be listed with another brokerage or otherwise removed from the market. Lyon Real Estate and Elizabeth Weintraub make no representations or guarantees about this home beyond the term of listing. If you want to know the status of this home, you will need to call your real estate agent or Elizabeth Weintraub.

Photos: Elizabeth Weintraub

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

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I know what some of the people who regularly read my blog are probably gonna say when they read this -- which is "What the heck? Didn't you just take a weekend trip like 6 weeks ago?" Because I rarely go anywhere. I'm lucky if I get 2 weeks off a year, and usually that is around the holidays, when real estate typically slows down a little bit.

But it's my 11th wedding anniversary today. My husband has had to endure my long work hours, which seem to get longer every month; I thought it would be good for our sanity to take a quick getaway to the coast. That's one of the nice things about living in Sacramento. If you want to take a quick trip somewhere really special, you have so many choices. When we lived in Minneapolis, unless we considered going to Saint Paul a treat NOT, there was really no place close by to drive.

Of course, as I was trying to pack up my computer, camera, cellphone accessories, as luck would have it, offers kept arriving. So our trip out of town was delayed by a few hours, much to my husband's dismay. I can't leave my clients hanging. But it does go to prove my point that all a Sacramento short sale agent has to do is arrange to take a vacation, and offers pour in. I will most likely receive a few more today, which I'll deal with after hiking up the beach.

Ah, it's a crisp 40-some degrees this morning. Far cry from the temperature in Sacramento a few days ago of 108. Do you know want to guess where this photo was shot last night? No fair mousing over it. Crap, I'll just have to tell you because I know I can't trust anybody not to follow their impulse. Bodega Bay. As we drove through Cotati on our way here, suddenly my eyes lit up. Because I've never been to Cotati before. Oh. Cotati. Accordions, I said. My husband glanced sideways, eyebrows furled in confusion. Well, he doesn't bounce around Active Rain. So he doesn't read Cynthia Larsen's blog and would not know about the Accordion Festival in Cotati.

Photo: Elizabeth Weintraub

Lowballing a short sale can cost a buyer that home. Not so much because the lender will counter the offer -- although, that's pretty much a given -- but because some other short sale buyer might snatch that house away from the lowballer.

Depending on your state laws, a seller may or may not have the right to send all short sale offers to the bank. For example, in California, we use the short sale addendum. This document, which buyers willingly sign, gives the seller the right to accept and send other offers to the bank.

One of my Sacramento short sale sellers received a lowball offer last month. I let the agent know at inception that the offer was probably too low -- I don't know why so many agents don't show the comps to their buyers. But the seller wanted to accept the offer in hopes that she would receive a better one down the road. Sure enough, she did. Within a week, we received another offer for about 10% more.

The seller accepted that offer in back-up position and directed me to send that higher offer to the bank. The ethical thing to do was to cancel the existing escrow. Besides, if we didn't cancel the first escrow, we couldn't put the second buyer's earnest money deposit into that escrow. I called the first agent with the lowball offer. Her options were she could wait to see which offer the bank would take or her buyer could cancel the short sale. Her buyer wisely chose to cancel.

In an effort to deflect getting bumped out, I see some buyer's agents write into their purchase offers that the seller will only accept back-up offers. I swear. If The Three Stooges sold short sales, this is something Curly would do. I can see him twirling his forefinger at the contract and tapping that sentence, Nyuk, Nyuk, Nyuk, with a goofy grin on his face. What this does is it allows the seller to accept a back-up offer and bump out the first offer. At any point in a short sale a seller can tell the bank to stop processing and start over.

People can get so wrapped up in Sacramento short sales that they forget the seller still owns the home. The seller calls the shots. Of course, if the seller has hired an experienced short sale agent, that agent is unlikely to advise the seller to start over upon receipt of a higher offer. But it doesn't mean it couldn't happen.

Photo: Big Stock Photo

I admit that I do have this soft spot in my heart and I don't like to see people suffer. Chilean miners, people in Pakistan, even goofy Sarah Palin. Maybe that's why I excel at doing short sales, because I feel like I am doing something worthwhile and not just churning homes in Sacramento. Not that there's anything wrong with just selling a house or negotiating for a buyer, but when I'm working on Sacramento short sales, there's a lot more at play than the employment of my analytical nature.

Short sales are hyacinths under the snow.

A client recently choked up when she talked about reading my article, How to Write a Hardship Letter, because I acknowledged that writing the letter could very well be extremely difficult to write from an emotional point of view. I try to walk in my client's shoes, and I think about how they might feel. I have empathy. I also know that categorizing depressing events, one after another, is likely to be depressing in itself. I mean, how can you write a letter detailing all of the horrible things that have happened to you and not be affected by it?

I suspect most people tend to deal with catastrophes and downfalls by moving on, and how can a person move on if a person has to revisit these horrific events over and over and then list them in sequence? The total picture can be devastating when a bunch of isolated incidences are strung together. A hardship letter says, Welcome to: This is your life.

Another client teared up when we were discussing her short sale. She said that she takes 100% responsibility for her situation. She made the decision to buy that home, and she also decided to make improvements, which is why she took out a home equity loan. I almost felt like she was saying, Bless me, Father, for I have sinned.

How was losing a job her fault? Who can predict these things? It used to be that improving a home meant a person was increasing equity. Even without the home improvement loan, this seller's house was underwater. Throw into the mix lost income and you've got a recipe for financial ruin. It's not my job to hear confessions and absolve guilt, but I also could not sit there quietly and listen to this woman beat herself up.

So, I reached across the table, put my hand on her arm and said it was not her fault -- hoping that maybe when she sees that I believe it, she will, too.

There is a future for sellers who do a short sale. It's the first step toward recovery and regaining financial ground. It's a way to put the past behind. Two or three years from now, a short sale seller may be able to buy another home. If that home is in Sacramento, it will most likely still be very affordable. The unemployed will eventually find work. We will get through these uncertain times. Things will improve. And that's the hope to which we all cling.

Photo: Big Stock Photo

In the most exciting news since Pop Cap introduced Peggle, it's possible that California short sale sellers with a first mortgage may no longer have to worry about a deficiency judgment after a short sale. I've been following SB 931 with great interest and discovered it just passed the Senate on Thursday unopposed. It's already cleared the Assembly.

California sellers who are granted a short sale by a lender holding a first mortgage will now be exempt from a deficiency judgment, even if that first mortgage was a hard money loan, providing that Governor Schwarzenegger signs it. And why wouldn't he? Nobody at the Capitol seems to have opposed it.

I can't count the number of Bank of America short sales I have negotiated and closed in Sacramento in which sellers had refinanced into one loan at some point. Bank of America has been unrelenting in its short sale approval letter verbiage on refinances, saying it would follow state laws to pursue a deficiency judgment. Some California lawyers argue that even if the loan was purchase money and exempt from a deficiency, such language allowed the bank to pursue sellers after closing a short sale because the approval letter changed the status of the loan.

On a refinance, though, the law is jumbled. It says if the bank forecloses on a first mortgage under a Notice of Default, it waives the right to a deficiency. However, it doesn't address what happens after a short sale. Short sales are different from foreclosures. Lawyers say a bank would need to pursue action most likely through an appellate court, and it's too costly, but it doesn't mean a bank wouldn't do it.

Now that we have SB 931 on the horizon, all of that is likely to change. Change is good. As a Sacramento short sale agent, I have clients who can't sleep at night because they have refinanced and closed escrow on a short sale. They are always looking over their shoulder, wondering whether they will get served with a collection notice or lawsuit.

SB 931 applies to one to four-unit dwellings, non-owner or owner-occupied. You can thank Sen. Denise Ducheny, a San Diego Democrat, for SB 931.

Illustration: Big Stock Photo

Intuition is something you've either got or you don't. It doesn't seem to me like a person can learn to have intuition. It's sort of sizing up all that is on the surface and juggling it with what you know to be true to try to figure out if a given situation makes sense. It's somewhat, well, intuitive. You might not have all the answers, and probably don't, because part of intuition relies on realizing there is a missing ingredient. The trick, the key, is to listen to your intuition. If you ignore your intuition, then having intuition doesn't matter at all.

In our Sacramento real estate market, buyers are hitting sales prices pretty hard. Earlier this year, one would expect to receive offers for more than list price, but at the moment, prices are falling. So, when I receive an offer for one of my Sacramento short sale listings within minutes of hitting MLS and that offer is for more than list price -- which is probably at market -- my radar goes up. This could be the perfect home for a buyer who has been searching for months, or it could be a buyer who is fast on the draw but who has little intention of seeing the transaction through to closing.

I can question the buyer's agent until the cows come home, but sometimes agents will tell other agents what they think they want to hear. A buyer's agent who quickly responds in the affirmative and immediately returns every document thrown into her lap arouses my suspicions. First, you'd think an agent would need to discuss sensitive issues with the buyer and not make promises without consulting the buyer.

For example, many buyer's agents do not know how to fill out a short sale addendum. They don't realize that a date to wait for short sale approval is required. It provides the basis for the contract. I think they just fill in the property address and tell the buyer to sign it. So, for example, when I email an agent to say I need a date specified in paragraph A of the short sale addendum and it comes back 3 seconds later with a handwritten date, I am pretty confident that the agent filled it in. Above the buyer's signature. Without authorization. Which is appalling. And against the law.

As a Sacramento short sale agent, I don't always have a good feeling about some of the offers I receive. Sometimes, agents make promises their buyers can't keep. As a result, I get the agent's promise in writing. And I get the buyer's commitment in writing, sometimes above and beyond a normal contract. Forget what they say. Look at what they sign.

One of the reasons that my Sacramento short sales close -- often with the first buyer who made the initial offer -- is because I listen to my intuition. It has never steered me wrong. And I advise my sellers accordingly. They can trust me.

Photo: Big Stock Photo

There are short sale agents back East like Chris Ann Cleland who love to work with Wells Fargo on a short sale. But, here, in Sacramento, those short sales are typically a struggle. Doesn't mean I don't list them and sell them, though, because as a Sacramento short sale agent, I'm not in the practice of boycotting lenders. You work with what you get. But, still. Wells Fargo, spittooey.

When it's a Wells Fargo FHA loan, it can be even worse. Because FHA wants to set the list price, just like a regular HAFA short sale but it's not HAFA. I first listed this home in February at $189,000. We received several offers and accepted an offer of $200,000. It took Wells Fargo 30 days to close out the loan modification file and assign a negotiator. By the third week in April, we had a counter offer and a demand from Wells to change the price to $211,500.

The buyer flipped out and canceled, despite my assurances that I could make Wells Fargo understand the home should sell at our offer price of $200,000. So, this home went back on the market in early May at Wells Fargo's list price of $211,500. Because we were stuck with an overpriced home on the market, it took another 30 days to sell this in what was, due to the first-time home buyer tax credit, one of the hottest real estate markets of recent memory.

We received another offer for, you guessed it, $200,000. This was June 4th. I sent the comparable sales to Wells Fargo to justify this price, and the short sale process started over. We were a little bit ahead of the game since the BPO was still valid, but it took Wells Fargo another 7 weeks to process this file. Finally, on July 22nd, Wells Fargo promised we would have the short sale approval letter within 24 hours. But on July 23rd, a fire broke out in Milwaukee, so Wells Fargo sent everybody home.

On July 26th, we received the approval letter at $200,000, stipulating a closing date of August 20th, not quite 30 days. The real nail-biting session began when the title company sent the final HUD to Wells Fargo for approval. The days ticked by and no such approval arrived. We called and called and called. Then, the day before closing, the negotiator emailed title to say a closing fee needed to be moved from the HUD and placed on line 1101, but title could not comply because it would violate HUD regulations.

We then exchanged several emails explaining the new Good Faith Estimate requirements to Wells Fargo. Still, no approval. Yesterday was the deadline. The lender funded. Title was ready to release docs for recording but Wells Fargo would not approve the HUD unless title moved the closing fee. The negotiator left for vacation. The clock ticked. By 1:00 p.m, we had escalated the file to a supervisor. It went to management review. We needed the approval by 2:30 to record.

The title company literally grabbed the minute hand on the clock and turned it backward. At 2:40, the HUD approval arrived, docs were released and we recorded, with permission to wire funds to Wells Fargo on Monday. You know, I'm lucky that I have any finger nails left at all after this.

I hear a lot of agents bellyaching about the real estate business in Sacramento. They ask where all the home buyers have gone and wonder if they should quit selling real estate. Well, with an attitude like that, it sounds to me like they have already quit selling real estate, they just haven't made a formal announcement yet.

There will always be home buyers and there will always be home sellers in Sacramento. The real estate business doesn't come to screeching halt just because the economy tanks or inventory rises. It just changes shape. More than half of the sales in Sacramento are foreclosures and short sales, with short sales taking the lead.

Because I list and sell a lot of short sales in Sacramento, I often prepare a comparative market analysis for a wide spectrum of neighborhoods. As a Sacramento short sale agent, I sell from Lincoln to Cameron Park to Galt. I put a cap on how far I am willing to drive this week when a caller asked if I would list a short sale in Rescue. I thought to myself, hmm, that's pretty darn close to Cameron Park -- nope, not gonna do it because before I know it I could be driving to Lake Tahoe.

But my point is I study snapshots of various real estate markets from an analytical viewpoint that other agents might not see in a such a wide scope. I am picking up a repetitive theme. List prices and pending prices are less than the sold comparable sales. We had a slide in Sacramento in early 2008, and I predict there's another dip coming up. It won't compare to the big drop between 2005 and 2007, but I don't see appreciation lurking anywhere within my sight line.

The market is what it is and no single agent is going to change it. I didn't make it. All I can do is adapt how I do business to make sure that I stay in business. By the time a recovery arrives, for most of us, it will be a huge relief; even if it slides in sideways. We have two eyes, we can see it coming. But it ain't here yet. Not by a long shot. Recovery is not around the corner. There's just no way to sugar coat what's going on, nor do I even want to.

I am including several charts here that show you sales are down 33% from last year and inventory is up by almost 45% over last year. We have more homes coming on the market and there are fewer buyers. This is now a buyer's market. Throw in interest rates at 4.5%, and you've got an excellent time to buy, which means buyers are less likely to do it. Don't get me started on why but buyers tend to buy in seller's markets.

If you want to buy or sell a home in Sacramento, give me a ring. I'll still be here.

Data supplied by Trendgraphix.

I have very few regrets in life. I don't regret my past marriages because I learned something from all of them and, obviously, at the time they seemed like a good idea or I wouldn't have done it. But I do regret not attending Woodstock. Participating in the March on Washington that fall or hitchhiking to the Kickapoo Creek Rock Festival the following spring (the Midwest's answer) doesn't make up for not going to Woodstock. Even though I was only 17, I could have hit the road and almost did, but I didn't.

I know what you're thinking. Oh, just grow up and get over it. But it's not that easy. Some regrets linger.

Some regrets pop up all of a sudden. Yesterday, a short sale buyer for a home on the Sacramento river canceled her escrow. She had regrets. This was a remarkable opportunity to buy a riverfront home for $299,000. Sure, it needs updates but it is livable, boasts great square footage, and OK the way it is. Her reasons for canceling were the process would take too long and the home needed too much work. But she knew that when she signed the purchase contract, and we were only about 30 days into the short sale process.

Something else was at play. That little thing called regret. For whatever reason. See, this is the thing about short sales. They take too long. They give buyers too much time to regret a decision.

This home on the river is not one of my short sale listings, but I can tell you, I wish I had the time to invest in buying this home for myself. It's a good buy. If you're interested in hearing more about it and would like a Sacramento short sale agent to represent you in the purchase, give me a ring.

Photo: Big Stock Photo