Sacramento Expert Short Sale Real Estate Agent

Archive for June, 2009

I received a call from someone on Friday asking if a short sale  is still possible after a Notice of Default has been filed on the property.  Of course it can be done, but time is of the essence here.  At this point this means that you only have a limited time to get offers on the property submitted to the bank ( lien holder) and accepted before the home goes to foreclosure sale at the court house. 

I have actually had short sale listings submitted to the bank and passing through the hands of negotiator after negotiator awaiting an acceptance right upon until 3 days before auction sale date.  The banks want you to wait to ask for an extension on the sale date up until 3-5 days before they will extend the date, because they usually only will grant extensions up until 30 days at a time. On all of my extensions requested I have had them actually extended  ( postponed )out because of the offers submitted to them were to the point of acceptance and approval.  

The banks sometimes want to see the activity of the listing from the beginning up until an offer is submitted.  The sooner you get the Hardship Package together with the offer and submitted to the bank, the better.  Remember you only have 3 months 2o days  ( after NOD has been filed) to get the bank to accept a short sale offer before going to auction sale.

Definition of an Notice of Default:

•  Notice of Default is an instrument (legal document) filed in the public records (county records) giving constructive notice to the public that a seller is behind on their mortgage. If the payments are not made up, then the bank will foreclose on the property.
• NODs ( notice of default ) are public record for 90 days, then a notice of trustee’s sale is published in a newspaper once weekly for 20 days and on the 21st day, the property goes to auction.

If you are behind in payments and know for certain that you are unable to catch up on those payments, then I would suggest talking with an attorney to discuss your situation and what would be the best choice to make at that time to best fit your situation.  These are a few choices you should discuss with an Attorney.

• Modification of current loan
• Short Sale
• Sign over the Deed to the bank
• Foreclosure
• Bankruptcy

Again speak with someone that knows the law as Real Estate Agents do not and should not give advise pretending that they do.

Terri Wisecarver

Sacramento Real Estate

There are many issues that some agents take into consideration when obtaining or doing Short Sales. One of them is that some agents have never done them so they dont know how to. This comes with changing times in the economy and agents now have to take listings anyway they can. Some agents refuse to do them at all and this includes showing short sales to buyers because of the length of time and effort that goes into them.

This is an example of what I have seen in this market with other agents and the handling of Short Sales.

• I personally have learned to handle them myself because I want to know everything about the discussions with the lien holders. I want to be involved to the point that I know everything is getting done exactly to their demand.  I have learned how to communicate with the banks and know exactly what they require upfront so that when the package and offer is submitted to them it is complete.  This makes the transaction push through the banks hands more efficiently.

• Now do not get me wrong on this point, but there are companies out there that offer a service at a price to handle the paperwork and to do the negotiations with the banks for agents, in order to free them up giving them more time to handle more business.  But sometimes you need to be careful with these companies as they charge a price for this service to the Listing Agent at 20% - 30% of their commission.  I hope that the agents do their clients a good service when choosing these companies, and I can only speak from my own experience on this matter.

When I started doing Short Sales I decided to outsource to a company claiming that they had a 99% acceptance rate with negotiations with the banks.  They made me sign an agreement to to pay them 25% of my commission upon the completion of the transaction.  I decided at this point allow this and provided them with the whole package reequired by the bank to them.  After I had tried to contact them after the offer was submitted to them, they would just state that they were in process of working with the bank.  This went on for months.  Sometimes I could not get a phone call back from them with any updates on my file.  Other times they would say that they were doing all they could and the bank was not cooperating with them.  I told them that I wanted more information as to what the bank (lien holder) was really wanting and that I had concerns as the foreclosure process had already been started on this home.  Needless to say, they did nothing on this file. The home ended up going to foreclosure and I had lost the listing.  The bank ended up getting less than the offer I had submitted at the beginning.

• Now there are other independent people out there that are not even agents doing these negotiations for agents also.  They do not have a license and really do not know real estate at all.  They learn also as they go.  Here is the difference. Again from my own experience of seeing this happen first hand.  It is somewhat similar the the loan modification scams that were and still are going on out there.  Seller Beware.  These independent people would sent out flyer’s offering to help you on a short sale and you would call in and make an appointment to talk with them.  When you get to the appointment to meet with them they also have a Real Estate Agent there to discuss what it is they are offering you.  This independent person states that they charge a fee to YOU the Seller for this service that is to be paid UPFRONT and NON REFUNDABLE for them to handle the paperwork and work with the banks for you.  This money would be about $1500.00 out of your pocket and the agent there would list your home as the short sale. This independent person would then work the paperwork through because they were also working for the agent that listed the property and the agent would also give them money upon the sale of the property.  I believe this is illegal from the agents standpoint as an under the table kickback.

I am not saying that agents do not work well with outsourcing to legitimate companies specializing in working these files, I am  just saying that I myself rather work harder for the seller that is in trouble and needs to sell the home, than to pay someone else to do it for me and not know what is going on.  This is my decision only as I feel I am giving my seller the best possible service I can provide.  Make your decisions to sell your home as a short sale based on what is offered to you by the agent to ensure that everything will be carried out the way that will benefit you.

If I can be any kind of kind of assistance to you by answering any questions, please  feel free to contact me at anytime.

Terri Wisecarver

REALTOR

Sacramento Real Estate

REALTOR

BPO is an acronym for Broker’s Price Opinion.  In general, the term Broker’s Price Opinion (BPO) is a method that a Real Estate Broker (or an agent acting on behalf of their employing broker) uses to estimate the probable selling price of a Real Estate property/house.  This estimate is submitted in a report to the BPO Company that has ordered it. This basically is information of  properties that compare to the (subject) house that is being priced.  This is similar to a CMA that an agent would provide a seller to show the approximate value of their property.

These are done for numerous reasons, but I would like to tell you how they would play into a role of doing a Short Sale.  When taking a listing of a Short Sale there are many factors that play a role in the process of getting the bank to accept a short sale at all.  With that said you have listed the property for sale, received the whole hardship package from the seller, and submitted this package including an offer to purchase to the lender for approval.

The lien holder (bank) will then look over the package to make sure everything is complete, and then they will secure an agent or broker, an place an order to obtain a BPO on the property.  Basically the bank just wants to see the market value of the property and the condition the property is in.  This gives them some kind of idea if the offer submitted is really a good one compared to the BPO, and how much their bottom line will be.

Example:

• Home loan owed on a home is $700,000
• Listed the home as a Short Sale for $600,00
• Offer submitted to the bank of $600,000
• Bank orders a BPO to be done
• BPO comes in at an approximate value of  $640,000

 The bank now has a higher value than the offer, and this gives them great information on how to proceed with the offer.  They have a choice of doing a few things at this point

• They can accept the offer presented to them
• They can counter the offer
• They can reject the offer
• They can refuse to allow a Short Sale

Having done BPO’s  myself I now have a better understanding of a banks position.  If you have any questions about buying, selling real estate in Sacramento, please feel free to contact me anytime.

Terri Wisecarver 

REALTOR

Sacramento Real Estate