Erin Attardi's Sacramento Real Estate Blog

Adorable Sacramento 3 bed, 2 bath, 1,159sf home is ready for a new owner! You will love the updated kitchen, open floor plan, spacious master bedroom, and the convenient location within minutes of shopping, entertainment and freeway. LOW $60/month HOA dues cover the front yard and common area maintenance. Convenient location close to I-80, shopping, schools and more. Offered at $119,000 subject to lender approval of short sale. For more photos and information, visit http://www.7117heathertreedrive.com/.

So I have gotten to the point where I have closed so many Sacramento short sales, I figured I would share my experiences with different lenders...All lenders are radically different in the manner in which they process short sales. I think it is only fitting that I start with Bank of America (formerly Countrywide in some circumstances), since I have closed numerous short sale transactions with them. There are distinct differences in the process and the contact information if your loan is a former Countrywide loan, vs. a loan that has always been with Bank of America.

The following are the documents that Bank of America will require from the seller:

• Last 2 months of bank statements
• Last 2 months of paystubs (or proof of unemployment)
• Last quarter of profit and loss statements, if self-employed
• Most recent retirement earnings statement
• Last 2 years of tax returns
• Completed financial worksheet
• Hardship Letter
• 3rd Party Authorization Letter

Along with those documents, the listing agent must forward the listing agreement, purchase agreement, buyer's pre-approval letter, copy of deposit check, and Estimated HUD-1 (summary of costs associated with the sale). 3rd Party Authorization letters should be faxed to 972-661-7800, or 805-520-5019 (old Countrywide loan). Bank of America's general short sale fax number is 866-706-7497, or 888-491-4947 (old Countrywide loan).

The 3rd Party Authorization letter should be faxed immediately once the property is listed. The rest of the documentation (seller's financial documentation and purchase documenation) should be faxed ALL AT ONCE when it is all assembled. Do not fax an incomplete file to Bank of America, as it will likely be shredded at the other end...yes your fax may be around 100 pages. Bank of America's document imaging process is long. You may find yourself faxing documents multiple times before they are imaged into their system. In my estimation, on average, it takes approximately 2 weeks for a complete short sale document package to be uploaded into their system.

Once you can confirm that the documents have been received and imaged into their system, you should call at least once or twice per week. Bank of America's Short Sale Support department telephone number is 800-846-2222, or 866-880-1232 (old Countrywide loan). When you go through their phone system, depending on call volume, you may reach another department. Generally, someone in the short sale support department will order a BPO (aka, broker price opinion) or appraisal prior to the file being assigned to a "Negotiator" for complete analysis.

There are several variables that may influence the time periods of your Bank of America short sale. The fastest Bank of America short sale approval I have received took about 60 days. The longest Bank of America short sale approval I have received took about 180 days.

The best case scenario is that Bank of America actually owns the loan, and there is no mortgage insurance. This will ultimately produce the fastest short sale approval scenario because Bank of America is able to make its own decisions regarding acceptable losses.

The worst case scenario is that Bank of America does not own the loan, and it is instead owned by a 3rd party. A 3rd party can be another bank (seems like many of their loans are owned by Bank of New York, or Deutsche Bank), a securitized investment pool, a government entity (Fannie Mae, HUD/FHA), or a mortgage insurance company. In this instance Bank of America is just the loan servicer and can not necessarily make decisions about acceptable losses. This will ultimately produce the slowest short sale approval scenario.

Unfortunately, you will not know until a mid-stage of the short sale which of these variables exists. The negotiation will go through several "phases"...it is not unusual for the loan to pass through several "Negotiators" and have several BPO's. Once assigned to a Negotiator, you should be able to obtain that person's direct contact information, including a direct telepone and email address.

Once approval is issued, Bank of America generally gives only 30 days to close. BE READY...sellers be ready to move out, and buyers be prepared to close asap.

Bank of America seems to be the culprit of some of the absolute weirdest short sales I have done. The approval documents have been "lost" and short sales that have shown as approved in their system have taken weeks to get to me, and then we only have had like a week or two to close escrow. They have also "misplaced" short sale payoff checks from escrow. UGH...the only thing predictable about Bank of America is that they are completely unpredictable. I have worked with them many times and pretty can guarantee you it will be a clumbsy process...

Click here if you are thinking about doing a short sale of your home. Click here if you are thinking about buying a short sale home.

I am happily eating a celebratory frozen yogurt right this second...I just received confirmation from Placer Title that one of my short sale listings has closed!

If you have been reading my blog over the last couple weeks, you will know that I have been feverishly working to get an extension on a Natomas short sale that was supposed to close by August 31st, but the buyer could not perform and get her lending in time. There was a Trustee Sale set for September 8th (yesterday), and I had been repeatedly told by the short sale lender (Aurora Loan Servicing) that an extension would not be granted. Approval extensions are NOT guaranteed!!

Well, first I was successful in my bid to get the Trustee Sale postponed from September 8th to October 1. When I finally did receive that extension from the short sale lender, the buyer's lender wanted some wording changed on the approval document! ARGGH!!

I literally was having nightmares about this short sale transaction. Anyway - it closed! Seller is elated, and buyer is thrilled to be a first time homeowner at age 75! A win-win for everyone involved. YIPPEE!

If you follow me on Facebook or Twitter, you will already know that one of my buyer clients closed escrow last Thursday on a short sale.

Just one of many transactions in the life of Erin Attardi, right? I wish. This was a unique and crazy transaction...even by short sale standards!

My clients randomly found this house back in March when happened to drive by it the first weekend it was on the market. It was being held open, so they went in, checked it out, and absolutely fell in love with it. I received an excited phone call that afternoon, and a couple days later we visited the house together. It was listed by a pretty well-known agent, so we did not hesitate to present a really strong offer that was $11,000 over the asking price...we were one of 4 offers, and fortunately we presented the best offer - so my buyer clients' offer was presented to the short sale lenders (Wells Fargo and GMAC) for consideration.

Hurry up and wait.

I spoke to my buyer clients weekly for about 8 weeks...they were not first time buyers, but they were also not familiar with the short sale purchase process. They actually inspired a blog post I wrote about what to expect as a buyer who makes an offer on a short sale listing. After about 8 weeks, the listing agent's assistant, who was negotiating the short sale, started gaining traction with the short sale lenders, and got written acceptance from the first lender! YAY!

The first lender, Wells Fargo, issued approval and offered $3,000 to GMAC, the second lender. Within a week of Wells Fargo's acceptance, GMAC stated they wanted 10% of their loan balance. This was approximately $7,000.

Ordinarily, there are ways to close a gap of this nature and close the short sale. The buyer can absorb this additional $4,000, the agents can reduce their commissions, or the sellers can make a cash contribution to close the transaction - or any creative combination of the three. Easy, right?

Wrong. In this instance, Wells Fargo's approval documentation specifically stated that GMAC could NOT net any more than $3,000, and that any additional proceeds from the sale were due to Wells Fargo. HMM...so after trying to find a way around this, getting my broker and the listing agent's broker involved, our legal counsel to review all the documents, lots of 3-way calls, etc., we had to go back to the negotiation table with both lenders in an attempt to get Wells Fargo to offer GMAC more, or for GMAC to accept less.

The result? A stalemate. Neither short sale lender would budge.

My buyer client was frustrated, but absolutely determined to purchase this house. My broker and I actually encouraged my client to move on and look for another property. They would not have any of that, and wanted to press forward with more negotiation. OK.

Let me explain...as a short sale listing agent myself - it is very difficult to sit on the other side of the transaction with my hands completely tied. I of course as the buyer's agent had zero influence over the transaction, and it absolutely made my skin crawl. Luckily the listing agent's assistant was open to collaborative strategizing...but still, I was not directly involved with the negotiation. UGH.

So back to the drawing board we went...Wells Fargo was absolutely unwilling to decrease its NET proceeds from the sale to allow GMAC more money. So we all put our heads together again and got creative. Over time we convinced Wells Fargo to allow the seller to pay some of the $4,000 deficit to GMAC, and to allow a slight commission reduction to increase the payoff to GMAC.

Finally, we got both lenders to agree at the end of June! Yippee!! The short sale was accepted, and my buyer clients were really happy...until...

Remember how we had offered about $11,000 more than the asking price on the home because we had been in a competitive offer situation? At the time we made the offer, there were recent comparable sales to support this higher offer. Well folks - comps only live for 90 days. By the time the short sale was approved, there were NO comps. This house was a bit unique. It was in a neighborhood of custom homes on large lots, but it was surrounded by tract homes on small lots. The only comparables were tract homes. The appraisal came in $53,000 below our contract price.

We had no choice but to go back to Wells Fargo and ask them to reduce the approved price. They had been so steadfast about not reducing their NET payoff to give GMAC another dime, we were all nervous that Wells Fargo would hold out for their approved price.

Hurry up and wait again. The buyer had already waited about 3.5 months, and between the appraisal and various inspections had spent about $1,000 out of pocket. They had also been able to lock an insanely low interest rate at 4.75% that was potentially jeopardized if escrow did not close within a certain timeframe.

More waiting...more waiting...after about 4 weeks, we finally got some good news that the file had been successfully escalated to management. This new person working on the file worked an overnight shift - 3pm to midnight. On Friday afternoon, August 28th, the listing agent's assistant emailed me that the file was under management review, and we could expect an answer "soon."

"Soon" turned out to be the afternoon of Monday, August 31st!! The written short sale approval from Wells Fargo magically appeared in my inbox! The next morning on September 1st, GMAC's new short sale approval also arrived!! My clients were approved at $307,000 to purchase a property they had originally intended to pay $360,000 for.

Needless to say they were absolutely ELATED! Their loan officer had literally everything in place so that when the new short sale approval arrived, she was able to have loan documents sent to the title company within 24 hours. She also was able to preserve their really low interest rate lock at 4.75%! My clients signed their loan documents on Tuesday afternoon....the loan funded on Thursday morning!

I am so glad that after all that turmoil and waiting they were able to close escrow. I personally delivered the keys with a bottle of champagne! I will actually miss our regular phone calls...I know they will be very happy there!

If you follow me on Facebook or Twitter, or if you read my blog post about the little fly fishing trip I just took, you will know that last week I closed a short sale that posed some insane challenges...who knew a clerical error from the 2nd lender could cause such stress!!

In the middle of April, I listed a short sale in Roseville...within a week or so, I had a few offers. Cool beans. I immediately submitted the offers to both the first lender (CitiMortgage) and second lender (Bank of America, formerly Countrywide), along with all of the other necessary paperwork. Within just a couple weeks of submitted all of the documents, I had written short sale acceptance from the first lender. YAY!

I continued to call the second lender, and followed up several times per week. I provided additional short sale related documentation a few times when it was required, and went through the chain of a few short sale negotiatiors, etc. The 2nd lender was taking a while to complete its analysis, and fortunately, I was able to negotiate and obtain written extensions from the first lender. Finally, when I called to check in with the 2nd lender on July 10th (a Friday), I was informed that the short sale was showing "APPROVED" in their system, and that the written approval document was going to be emailed to me by the following Monday.

I immediately called the buyer's agent to let her know of the great news! The buyer had already completed his inspections and was ready go! The first lender's latest extension was valid through August 15th, which would allow the buyer plenty of time to close escrow.

Monday rolled around, and the short sale approval document did not arrive. I called the 2nd lender, and they said it was on the way. Tuesday...still no approval letter. What was the problem? I called Bank of America's Short Sale Support Department to find out...the Final Negotiator (or Closer, as they are now referred to), was not returning my voicemails or emails.

Turns out that for some reason, they emailed the short sale approval document to the wrong email address!! UGH...annoying, but not the end of the world. I gave the lady I was speaking with the correct email address. Each day, I anxiously checked my email waiting for the document to arrive. Each day, I again called and emailed the Closer without response. Each afternoon, I called the Short Sale Support Department...I got several supervisors and managers involved, and was promised every time that the approval document was "on its way." A week passed...then almost another week passed. I had spent MANY hours on the phone trying to track this document down. Finally, on Friday, July 24th, I called to leave yet another voicemail for the Closer's manager, and got an "out of office" voicemail greeting that had another manager's direct number. That manager answered!! He confirmed my email address, and said I would have the approval document within an hour.

Sure enough, as promised, an hour later at 4:30pm the approval document arrived in my email inbox. SUCCESS, I thought! I opened the attachment, and was shocked at what I read. The short sale approval document named an incorrect purchase price (it was actually lower!), and it named an incorrect person as the buyer. WHAT!?!?!?

I tried calling him back, but he did not answer. This Bank of America short sale approval was not re-assignable to a different buyer. It was after hours in Arizona where they are located. I called the buyer's agent to let her know what was going on. Of course we both freaked out...it took 2 weeks to get the short sale approval document emailed to me, and it was all wrong! Providing the 2nd lender's approval document was a condition of obtaining the buyer's loan! There was nothing I could do until Monday, July 27th...and time was running out! CitiMortgage had told me that there would be no more extensions to their approval. The buyer had already paid for his appraisal and several inspections, and was out of pocket close to $1,000.

I arrived to the office EARLY on Monday and started pleading with Bank of America's Short Sale Support Department to correct their mistake and get a new approval document over to me. I called and emailed all of the same managers and supervisors...after several hours on the phone (as if I did not have anything else to do), I was told that one of the conversations I had back in June had been entered into their system incorrectly. Duh! Several new managers and supervisors and hours on the phone later, I finally was emailed by the Closer. Wow - lucky me! The first contact from the Closer ever! She asked me to email her the correct information, which I did immediately. Finally, on Wednesday, August 5th, I received a new approval document via email with the correct information! WHEW!

So two days later I left for vacation. The very last day of my trip, on the way home, the Escrow officer with Placer Title called me to let me know of another hiccup. There was a problem with the allocation of costs on the final closing statement...I would explain it in great detail, but doing so would not make much sense unless you know all of the terms of the short sale approval which I can not get into here. 8 or 9 calls to the Closer, supervisors, managers, and the Short Sale Support Department at Bank of America over 4 or 5 hours driving home from Utah finally got us the answer we needed...we successfully closed escrow on Friday, August 14th.

Let me just tell you - for anyone who thinks real estate short sales are easy or require little expertise, you are wrong. Aside from being extremely persistent, all of what took place was completely out of my control. Thankfully this had a happy ending.  It seems that no matter how many short sales I close, they are all wildly different with their own crazy challenges.

Time for my third installment of Erin's Sacramento Short Sale Experiment! I am sure ya'll are just on the edge of your seats to find out just what has transpired in the world of short sales in our Sacramento metro area? For those of you not following along at home, or perhaps if you are reading this for the first time, my short sale experiment is tracking a few different Sacramento zip codes to see what how the short sale activity increases or decreases over time as compared with traditional resale listings (where there is a seller with equity in a "normal transaction") and to bank-owned resale transactions. My hypothesis at the start of this experiment: the number of short sales will grow over time, as will their dominance in our greater Sacramento marketplace (overall percentage of listings). I have continued to list more short sale properties. Let's see how this new data compares to the "control data" for the experiment and also to last month...

95624 is the section of Elk Grove closest to Hwy 99. As of right this second according to MLS, there are a total of 268 active listings there. 188/268 listings are short sales. The median price in that zip code in July 2009 was $233,000 according to Trendgraphix (an increase over last month). The result vs. the control data? Control data was 68.6% of all active listings in 95624 were short sales, vs. 72.5% last month, vs. 70.1% this month. INCREASE over the control data, but a decrease over last month. Number of YTD closed short sales - 122.

95610 is a section of Citrus Heights. As of right this second according to MLS, there are a total of 124 active listings there. 85/124 listings are short sales. The median price in that zip code in July 2009 was $199,000 according to Trendgraphix (a slight decrease over last month). The result vs. the control data? Control data was 60.3% of all active listings in 95610 were short sales, vs. 55.6% last month, vs. 68.5% this month. BIG INCREASE. Number of YTD closed short sales - 54.

95826 is a section of Rosemont and College Greens. As of right this second according to MLS, there are a total of 101 active listings there. 64/101 listings are short sales. The median price in that zip code in July 2009 was also $184,000 according to Trendgraphix (unchanged from last month). The result vs. the control data? Control data was 62.2% of all active listings in 95826 were short sales, vs. 63.3% last month, vs. 63.3% this month = INCREASE. Number of YTD closed short sales - 30.

95864 is a section of Sierra Oaks, Arden Park, and Arden Manor. As of right this second according to MLS, there are a total of 161 active listings there. 34/161 listings are short sales. The median price in that zip code in July 2009 was $285,000 according to Trendgraphix (a decrease over last month). The result vs. the control data? Control data was 17.0% of all active listings in 95864 were short sales, vs. 15.8% last month, vs. 21.1% this month. BIG INCREASE. Number of YTD closed short sales - 11.

95818 is a section of Midtown, Land Park, and Curtis Park. As of right this second according to MLS, there are a total of 83 active listings there. 18/83 listings are short sales. The median price in that zip code in July 2009 was $365,000 according to Trendgraphix (slight decrease over last month). The result vs. the control data? Control data was 16.0% of all active listings in 95818 were short sales, vs. 21.5% last month, vs. 21.7% this month. INCREASE. Number of YTD closed short sales - 9.

95819 is a section of East Sacramento. As of right this second according to MLS, there are a total of 72 active listings there. 10/72 listings are short sales. The median price in that zip code in July 2009 was $404,000 according to Trendgraphix (an increase over last month). The result vs. the control data? Control data was 19.7% of all active listings in 95819 were short sales, vs. 20.0% last month, vs. 13.9 this month. BIG DECREASE. Number of YTD closed short sales - 5.

So in summary - of the six Sacramento area zip codes I am tracking for my experiment, 5 of them experienced an increase in the number of active short sale listings...2 of the zip codes posted pretty large proportional increases, and the one decreasing zip code I am tracking posted a very large proportional decrease. My phone definitely keeps ringing and I continue to receive emails - I am fielding lots of inquiries from homeowners looking for more information and insight from my short sale experience...buyers too are really curious about the short sale process since they are encountering so many short sale listings in our marketplace. Also (you will be aware of this if you follow me on Twitter or Facebook), I closed many of my own short sale listings since the last installment of Erin's Sacramento Short Sale Experiment.

Until next time!

Erin's Sacramento Short Sale Experiment, Part I
Erin's Sacramento Short Sale Experiment, Part II

Charming Brick 2 bedroom, 1 bath, 1,203sf Cottage in Land Park! Contractor's own home features many modern amenities of today while retaining all the charm of yesterday. Renovated kitchen offers granite counters and backsplash, gas stove, dishwasher, and built-in eating bar. Spacious bedrooms with lots of closet space. Updated bathroom with tile counters and tub surround. Beautiful wood flooring throughout. Dual pane windows. The back yard is an outdoor oasis with a built-in swimming pool, surrounded by hardscape and planter beds featuring lush landscaping. Detached 2-car garage. Close to local eateries, transportation, William Land Park, & just minutes to Downtown. Offered at $449,000, subject to lender approval of short sale. For more photos and additional detail, please visit http://3174-17thstreet.com/.

If you follow me on Twitter, you probably already saw that earlier this week I received written confirmation that a short sale lender agreed to absorb $9,110 in repairs on one of my listings.

Generally speaking, Sacramento short sales are sold "as-is" in their current condition...however some short sale lenders will agree to pay for 'catastrophic' repairs. In this instance there were nearly $6k in termite repairs, and $3k in "health and safety" repairs that were required by the buyer's lender to obtain an FHA loan.

From the begining, I had shared with the short sale negotiator that I felt this particular home would not be up to FHA lending standards. When we received an offer from a buyer using an FHA loan, I submitted it to the short sale negotiator along with color photos of the home and explicitly told her that this home would require repairs to be on par with FHA standards. A couple weeks into the transaction, after the buyer had completed pest and home inspections, and once the appraisal was complete - they submitted a request for repairs. I then spent the next couple days obtaining bids for the work that was requested...I compiled a very comprehensive report for the short sale negotiator. After less than one week - the short sale lender approved to pay for the repairs!

I should caution you - NOT all lenders will entertain paying for repairs...and not all short sale listing agents will know how to negotiate this either.

As a buyer, you should prepare to purchase a short sale as-is.

Once you obtain inspections, if you discover a 'catastrophic' issue - like pest repairs in excess of $5k, a roof that must be replaced, central heat & air that is broken beyond reasonable repair, a missing electrical panel, etc. - you may be able to make a case for a price reduction or ask the short sale lender to pay for repairs. Keep in mind there is no guarantee they will grant your request. Short sale lenders will absolutely not pay for any repairs that are not 'catastrophic' in nature.

If you follow me on Twitter, you likely already know that yesterday I spoke to Jim Wasserman with the Sacramento Bee regarding how short sales are becoming more common in our Sacramento real estate marketplace. He quoted me for his article in today's edition of the Sacramento Bee...the article can be found here.

During my conversation with him yesterday, he asked me if negotiating short sales in Sacramento was getting any easier. Candidly, and in general, I do not think they are getting easier to negotiate.

Yes - there are certain short sale lenders that have become more efficient in terms of the process of analyzing loans for short sales, and those that are a bit faster to issue written approval. This is definitely great if you are working with one of these efficient lenders where there is just one loan, no mortgage insurance, "purchase money" financing (as opposed to a refinanced loan), and no "investor" to deal with (the actual owner of the loan, like Fannie Mae, Freddie Mac, or some other bank than the one that is servicing the loan).

If you are not working with one of these efficient lenders, there is more than one loan or lender involved, there is mortgage insurance, a refinanced loan, or an investor to deal with - then negotiating the short sale is anything but simple. I learned a long time ago that no two short sales are alike...anyone who tells you otherwise does not know any better!

I am definitely NOT saying that short sales with these variables can not be successfully negotiated or completed (because they definitely can be successfully negotiated and closed), but there are certain complexities that will exist under these circumstances that will make the short sale negotiation "less easy." LOL

I like to think I make the short sale process seem easy for my seller clients! I have gotten 5 of my short sales approved over the last month, and I have a couple more short sale listings that should be approved over the next couple weeks. I have a great system in place to negotiate them, and am never too busy to take on another short sale listing...

Every other week or so, I will receive a call from the representative of a loan servicer, or 3rd party contractor informing me they have been ordered to "secure" one of my short sale listings. Huh??

There are many loan servicers (like CitiMortgage, GMAC, Homecomings, Bank of America/Countrywide) that send representatives around to properties in default or with past due balances that make sure their "assets" (aka, properties their loans are on) are in decent condition and that they are properly secured. Often times if it is discovered that a property is vacant, or not properly secured, the loan servicer take it upon itself to make sure the physical integrity of the "asset" is not compromised.

Erin, what the heck does that mean? That means that occasionally I will receive a call that there has been an order to change the locks on one of my listings...however often it does not stop there. I have received calls that there are orders to drain full and functioning swimming pools, board-up functional windows, board up functional doors, padlock electrical panels, shut-off water, remove functional structures in the backyard (like a really nice Tuff Shed in one case), etc. In the instances I get an advanced warning of something like this, I have been able to convince the loan servicing folks that the action was not necessary.

The really lame part is the occasionally I will not be given an advanced warning, or the heads-up call goes to the seller directly and they ignore the call thinking it is a collection call...and the work is then performed without my knowledge or the knowledge of the seller. I have received some really angry calls from other agents trying to show my short sale listings only to find the keys in the lockbox do not fit the locks on the doors. In one instance, I had short sale approval from the lender, and the buyer went to the property to do a home inspection and caught the lender rep in the middle of draining the swimming pool. UGH.

The first time this happened about a 18 months ago, I was definitely taken by surprise. I have come to realize that it only makes sense that the bank wants to make sure that its "asset" does not fall into disrepair or is not vandalized. If you have ever looked at bank owned property for sale you will know this happens more often than anyone would like. Now it is something I prep my short sale sellers for in the event they are contacted by the loan servicer regarding this.