Sometimes things turn out to be a blessing in disguise. I was a little astonished yesterday when a client emailed me to ask if his home in Roseville had gone to auction yet. When I pulled up the information in the tax rolls, for some reason, I also ran the address in MLS. It was a shock when I pulled up the listing that had expired this spring. My client had listed his Roseville short sale with a friend of mine and not with me. The agent must have known, but the agent never called me.
The first thing that crossed my mind was why did that agent's listing expire? Why didn't the agent instead withdraw or cancel that listing from MLS? Like in grade school, it goes on your permanent record. Very few agents want expired listings to be noted in their MLS records. Typically, we withdraw those listings before they expire.
The second thing I wondered about was whether I had somehow inadvertently offended the client. I had helped him to buy a home in Land Park last year. At the time, I recall sending the client to a tax accountant and a lawyer for tax and legal advice. I also sent his file to credit approval -- a process that takes several weeks -- before we wrote any offers on homes in Land Park. That's because I didn't want the liability of a buy and bail scenario, plus I needed to make sure that an upside-down home would not disqualify this buyer from buying a new home.
Not every lender will reject a file from underwriting when a buyer has no equity in an existing home. But most of them will. To get through underwriting, a buyer with an existing underwater home has to show strong financials and to be able to afford to own both homes. Even then, there's no guarantee they'll get the loan. So, we got this buyer manually preapproved through underwriting before buying a home in Land Park. Nobody wants to get to the closing table and find out a loan has been rejected.
Turns out, after he closed on his new home, my client decided to dump the home in Roseville. His income was too high to qualify for a short sale without making a seller contribution, which he didn't want to do. The loans secured to that property were hard money. You can bet your booties those lenders, especially the second short sale lender, would demand a contribution. I wondered why this Sacramento short sale agent did not have that discussion with the seller prior to listing and refuse to take that short sale. Even more weird was the fact the client said he had refused to submit financials to the short sale lenders. I typically collect that information upfront and thought other agents did the same thing. Apparently not.
It's not a short sale listing if the seller doesn't qualify, especially if the seller won't submit the required documentation. It's an exercise in futility, which very few Sacramento short sale agents would willingly undertake. Most of us are in the business of closing our short sales.
The client told me he wanted to spare me the agony. That's why he listed with a competitor. He knew that his short sale would never get approved. I happen to like the agent he listed with, too. It's not fair that he put the agent through the wringer. But I'm glad he had the foresight not to call me. Because I would have had to turn him down.
P.S. To protect the identity of those in this story, certain facts in this blog have been changed.
Tip for Land Park gardeners: If you're planting tomatoes this spring, be sure to slip some yarrow into the garden. Yarrow attracts beneficial insects that eat tomato-destroying bugs. It's the organic thing to do.
Photo: Yarrow with insects in my Land Park garden, by Elizabeth Weintraub
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