Sacramento Real Estate Views

Short Sale Hell In Sacramento Real Estate

Mission Impossible – Short Sales

Short sales.  What a mess.

Over the last few weeks, it’s been evident that short sales have recently become tougher than they were six months ago.  The banks are inundated, agents can’t keep up with the changes the banks are making to the process and the buyers are getting screwed in the process.

With an absence of bank owned homes to sell and the economy getting worse, short sales are now taking center stage as more appear for sale in the MLS.  Banks, who you’d think would want to sell short rather than going through a costly foreclosure process, are making it tougher to get a deal done and homes off their books.  It seems as if they would almost rather foreclose than sell at a higher price while avoiding the foreclosure process. (short sales typically sell for more than bank owned foreclosed homes)

There has to be some money on the backend for them to make it this tough.

“I’ve Got Approval On The Second, Trust Me”

I have a buyer I’ve been working with for almost a year.  We’ve made probably 50 or more offers on homes throughout the Antelope, Carmichael and Fair Oaks area.  The hitch with them is that they are VA borrowers, fully approved and ready to purchase but can’t get anything accepted.  This I understand.

50 days or so ago, we got one accepted.  The listing agent immediately sent me an approval letter from the 1st mortgage holder saying that the short sale was approved and here’s what they would take, what the commission would be and the break down.  The letter also approved an amount for the second mortgage holder as well.

But she didn’t have approval from the second mortgage holder in writing.  30 days later, we still didn’t have an approval in writing from the second.  “Their system is down, it’s Countrywide.”

Well, on the 35th day, the second comes back with an approval saying they will settle for $20,000.  Only a scant $17,000 higher than was originally agreed to.

AHEM!

Now my buyer doesn’t get the house, their family is still separated and the house will go into foreclosure..SWEET!

“Buyer Couldn’t Stick Around, Bank Looking For A Signature On The Addendum”

This is how the comments in the listing printout reads.  Sure it does!

I have a client from Alaska, a very savvy investor, who wants to make an offer on this fourplex in Sacramento, all cash, close in 30 days based on these comments.

I create the offer, send it over then call the listing agent to ask him if he received it. “You sent an offer over?” he says.  “Yes, yesterday, all cash, close in 30 days”  I say.  “Great, I’ll get it submitted, should be no problem.”

Yeah right.

I don’t hear anything for a couple days so I call the listing agent back to follow up.  He communicates so poorly that I have to ask him the same questions several times just to figure out what the heck is he trying to say.  Seems to be common for short sale agents I’ve dealt with.

Turns out, he’s already turned in an offer, lower than the one I submitted and won’t submit ours due to the confusion it causes with the bank.  I understand this completely but he could have told me that upfront and I wouldn’t have bothered.

I read him what the listing printout reads and he says, “oh yeah, I should change that”.  Wow…

“You Submitted An Offer In March, Is Your Client Still Interested?”

This isn’t as uncommon but the situation is.  I asked the listing agent if the short sale had been approved by the mortgage holder and she tells me that they won’t even look at the financial package until they have an agreement signed by both parties.

This scenario has you writing an offer for your client and sending it off into the black “short sale” hole without any idea if the lender will even allow the mortgagor to sell short.  This hasn’t been the case in the past.  In the past, the entire financial picture, hardship letter and associated documentation would be submitted, the short sale approved, or not, then offers would be sent up for review.  It goes through 3 stages of negotiation then, 10% of the time, closes escrow.

I advised my client to pass on this.  It’s just too much trouble.

So What’s The Short Sale Strategy?

Write, write and write more offers on as many of them as you can.  Don’t count on any of them and when one pops, hope for the best.  It’s like throwing darts in the dark.  Literally.

One piece of advice:  This market is bringing out the some of the worst performing agents I’ve ever dealt with.  NOW I know why Realtors/real estate agents get the disrespect they sometimes get.  I didn’t understand this when the market was “good”.

If you’re looking for an agent to help you get through this mess, knows what questions to ask and can save you months of time, please give me a call.  I’d be happy to work with you.

Thanks for visiting!

Related posts:

1. Rocklin Short Sale Statistics
2. Is It Available or Not!?
3. Short Sales Becoming Preferred To Foreclosure

Tags: short sales sacramento

This entry was posted on Sunday, July 19th, 2009 at 11:09 pm and is filed under Market Commentary, Short Sale Information. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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