If a buyer for homes in Land Park asks me to show a short sale listing, I do investigative work before putting that home on tour. There's just no sense in letting a buyer fall in love with a home that might not close escrow. See, the problem with short sales in Sacramento is the entire short sale process is dependent upon the listing agent. The buyer's agent has no involvement after the offer has been accepted by the seller.
I check to see if the Sacramento short sale agent has other listings and whether any of those are short sales. If I discover that agent has several or more short sale listings, I might run that agent's ID number through Prospector to find out how many short sales that agent has closed over the past 12 months. An agent with no track record of closing short sales is a red flag that I pass along to my buyers. Because one of the main questions I hear from buyers is how long may they have to wait for short sale approval.
Short sales are complicated; the challenges are never ending. They change from month to month. Short sale banks are becoming more aggressive and demanding seller contributions as well, even on purchase money loans. Not every seller qualifies for a short sale, and not every agent can handle them.
I probably receive 20 to 25 calls a week from would-be short sale sellers. Each situation is different. So, I run sellers through a series of questions to determine the probability that their short sales will close. If the odds aren't 95% in favor of closing, I don't list them. A seller who falls into the 5% probability-of-closing-category said she wants to sell because she's tired of making payments on a mortgage that is twice as much as her home is worth. She has no hardship. She just wants to dump the house because she's worried about the economy, her job stability and afraid that something awful will happen down the road. If something bad were to happen, she could not afford the home anymore.
While I empathize, I needed to find a delicate way to explain that she most likely does not qualify for a short sale. Her income hasn't taken a hit, both she and her husband are, in fact, making more money than when they bought the home. Finally, I said, "I hate to say this, but what I'm saying is call me back when something horrible happens to you." At least I made them laugh.
Before showing a Sacramento short sale, I try to figure out who the lenders are, whether the loans are held by Fannie Mae, if a Notice of Default has been filed or an auction scheduled. Handling as many short sale listings as I do, I've gained information over the years that helps me tremendously when I'm representing buyers for short sales. I also run the comparable sales to analyze the list price. Often, short sale list prices are artificial. They may be too high or too low.
This lets me make a fairly close estimate on value so I can advise the buyer how much to offer. Because if the bank won't approve the price of that short sale, the buyer can wait several months to find out that the short sale was rejected by the bank. Pricing is a huge issue. When I am the listing agent, I often meet the bank's agent at the property to review the comparable sales so the BPO comes in at the offer price. But not every Sacramento short sale agent goes that extra mile. Some just throw lowball offers at the bank, and those are rarely approved.
Of course, even after I thoroughly investigate the situation before advising my buyer to enter into contract, even though the odds may be high for short sale approval, anything can happen. Last summer, my buyers waited 3 months for a short sale home in Land Park. At the 11th hour, the listing agent called me to say that short sale seller had suddenly found employment. So, he decided to pursue a loan modification and canceled the short sale transaction. Much as I try, I can't remove all the risk for short sale buyers.