Elizabeth Weintraub, Sacramento Short Sale Agent, 916.233.6759, Lyon RE

I just listed a new short sale in Land Park yesterday, but before I get to that, let me tell you about a weird thing that happened on Friday. I've never, in all my decades of real estate, experienced this before. A buyer who was supposed to close escrow on a home in South Land Park sent me an email with an attachment. That attachment was a copy of the recording status of the home, and the email asked if the home had recorded. Since I was viewing this on my BlackBerry -- which has very small print on attachments, even if I zoom the image -- I stopped at my home office to look at it on my computer.

Sure enough, the document included a book and page number. But it also had Thursday's date, not Friday's. I contacted title. Whoa. The title company goofed up and recorded the wrong deed. That loan had just funded Friday morning, but title recorded the deed in error on Thursday. This didn't affect my buyers much, but it certainly affects the buyers who thought they had closed escrow on Thursday and probably moved in already. Just goes to show that even title companies make mistakes.

Sometimes, buyers make mistakes as well, especially when they are moving to Land Park from out of the area. Many homes in Land Park are unique, and their values can vary dramatically, depending on a plethora of indicators. That's why it's important to hire an experienced Land Park agent or it's possible that a buyer may overpay for a home here.

Unfortunately, some appraisers have no idea how to appraise a home in Land Park. They don't seem to know where the boundaries are for each subdivision or how crossing some boundaries can have an affect on value. So buyers can't always rely on an appraisal to substantiate value.

The sellers of my new Land Park listing paid $515,000 in the spring of 2005, probably the hottest market ever on record for Land Park. It is presently assessed at $429,236 by the County of Sacramento. So, if you're looking for a short sale in Land Park -- and there are only 3 active short sales available in Land Park at the moment -- you might want to check this out.

1000 Fremont Way is offered as a short sale at $325,000. This Land Park Tudor features 3 bedrooms, 2 baths, and according to the County Assessor has 1,471 square feet. It has refinished hardwood floors, barrel ceilings, nooks, crannies, built-ins, crown molding, a fireplace, formal dining room, breakfast nook, master suite, a bonus room off the garage, partial basement and attic storage. It was updated in 2005.

Plus you get boat storage, RV access and a garage that will hold 2 small cars. The back-yard has a covered patio that is made to look like a beach, with a sanded concrete floor, the sides of the overhang adjust and a ceiling fan. There is also a lawn in back that you will never need to mow.

Although the home has an address on Fremont, it actually faces 10th Street, and is a corner lot. But the back yard has a southern exposure. The A/C was new in 2005. It's got everything a Land Park buyer could want.

1000 Fremont Way, Sacramento, CA 95818
Offered exclusively by LYON REAL ESTATE as a short sale at $325,000
Elizabeth Weintraub, Land Park Agent, 916.233.6759

Photos: Elizabeth Weintraub

Sometime around mid-October, I received an offer on one of my Sacramento short sales. The buyer's agent swore that the buyers loved the home. On top of that, the agent promised in writing not to write any more offers for those buyers as everyone waited for short sale approval. We received approval from one lender and were working on gaining cooperation from the second lender when a cancellation of purchase agreement appeared in my email inbox.

The explanation was the buyers decided they could not afford the improvements they wanted to make. They had not gone back to the home since the day they wrote the offer. This epiphany seemed to have come to them right after they received the approval letter, when reality sunk in. The agent didn't have the guts to pick up the phone and call me. For all I know, that agent had been out showing these buyers other homes and writing other offers.

If that was the case, this agent could possibly be held liable for breaking the REALTOR Code of Ethics. Article 1 says agents must be honest with each other. On top of that, though, buyers who walk away from a short sale after signing a contract could be held liable for breaching the good faith covenant inherent in contracts. A lawyer could argue in court that those types of buyers probably had no intention of following through on the purchase should a better opportunity present itself along the way.

Moreover, what if the seller was already in foreclosure, facing a trustee's sale, and relying on this particular buyer to perform? Is it possible that the seller could hold the buyer personally liable if the seller lost the home to foreclosure as a result of the cancellation? I'm not a lawyer, and I can't give legal advice, but it seems to me that it's possible a seller in that situation might have legal recourse against such a buyer.

After all, by ratifying the contract, the buyers prevented the seller from selling to a serious buyer -- a buyer who may have been able to perform during the allotted time frame. Buyers who are writing multiple purchase offers on Sacramento short sales may want to rethink that kind of strategy. What do you think? Do short sale sellers have a legal right to sue a buyer for damages if that buyer's failure to perform and breach of good faith leads to foreclosure?

The usual scenario goes like this: An upside-down homeowner loses his job and the family scrambles to make the mortgage payments. They borrow on credit cards, ask other family members for help, sell possessions. They may ask the lender to do a loan modification and spend months trying to qualify before the lender shoots them down.

Then the bank files a Notice of Default. A few weeks before the trustee's sale, a friend suggests a short sale. Desperate, the homeowner then calls a Sacramento short sale agent, hoping for a miracle and to save what little credit the homeowner has left.

I've pulled quite a few Sacramento short sales out of the fire just moments before the home was auctioned off to the highest bidder at foreclosure. But I'm not a miracle worker, regardless of my reputation. Sometimes I can save a seller from foreclosure and sometimes I can't. It's much better to call me to list your short sale before the Notice of Default is filed.

This is how the Notice of Default works in California. Generally, the homeowner falls behind a couple months. The lender sends letters asking for payment with late fees. After 60 days or so, before the Notice of Default is filed, the lender is required to inform the homeowner in writing of its intent to pursue foreclosure. By law, this letter must be delivered to the homeowner at least 30 days before filing the Notice of Default. If you receive such a letter of intention, pick up the phone and call your Sacramento short sale agent. Don't put it off.

The Notice of Default is recorded in the public records. After 90 days, the publication period in a newspaper of general circulation begins. After 20 days, the home may go to auction on the 21st day. This means from the day you stop making your mortgage payments, you may have about 6 1/2 months before you lose your home to foreclosure.

Time is of the essence. You don't have the luxury of time when you're trying to do a Sacramento short sale. If you are trying to negotiate a Bank of America short sale, for example, on a loan that originated with Countrywide, you may need a full 6 months to get short sale approval.

So don't stuff those bank letters in a drawer hoping that it will all go away if you simply ignore what's happening because it won't. It will just get worse. Get legal and tax advice, then call your Sacramento short sale agent as soon as you possibly can. I can't guarantee that I'll be able to postpone the trustee's sale, but it's entirely possible.

If you're about to attempt a short sale, you probably have questions. Questions are always on my mind, too. I wonder about such things as why does Google's homepage show the feet of a Muppet character today? How focused am I on short sales that I did not know the World Series is going on? Why is it when my cat, Pia, rubs on my monitor, she always manages to hit that hidden button that turns it off, and what are the odds that I'll be typing when it happens?

When hopeful short sale sellers call me to ask questions about doing a short sale in Sacramento, I email them my short sale package. This package includes a wealth of information created by reputable legal counsel. It answers a bazillion questions, some of which many sellers didn't even know they had until they read the answers. The package also addresses how short sales affect credit and the possible consequences of taxation on canceled debt.

I do this because I am not licensed to give legal advice, but it's important to me that my sellers are informed. I suggest that sellers obtain legal and tax advice before embarking on the short sale path. This helps them to understand the ramifications of a short sale because not every short sale follows the same procedures.

If sellers have sizable assets to protect or discretionary income, I may also suggest that it could be in the best interests of those sellers to hire a lawyer to negotiate the short sale. I still handle the sale of their home but, in those cases, a lawyer has direct contact with the short sale bank, not me. Banks seem to be more afraid of a lawyer than a Sacramento short sale agent.

I've also witnessed what lawyers can do. One client had more than $200,000 on hand and, by hiring an experienced Sacramento law firm to negotiate the short sale, that client retained the cash and received a clean short sale approval letter without demands for a seller contribution. So, I know it's not always necessary to be upside-down financially to qualify for a short sale. That same law firm is handling negotiations for a few of my other short sale clients who are current and not in default.

If you're looking for answers to your short sale questions, call Elizabeth Weintraub at 916 233 6759, and I'll do my best to provide you with enough information for you to decide whether you want to pursue a short sale. Most of my Sacramento short sales sell within a week or two. And my success rate is high. Remember, too, on a short sale, banks pay my commission.

Every so often, I receive a phone call from a seller who is upside down on the mortgage and wants to sell a home in Sacramento as a short sale to a family member. These callers have a hard time understanding that most banks will insist on an arm's-length transaction, which means they can't sell the home as a short sale to a person who is related to them.

Sometimes, sellers will go a step further and try to make special arrangements with the buyer of that short sale. They ask if they can rent the home back from the buyer. In many cases, they can't. Moreover, they probably can't sell to a business associate.

Why not? Because the bank may demand it. A short sale seller can't financially benefit, directly or indirectly, from a short sale. A lot of banks have caught wind of the potential for mortgage fraud and are trying to put a stop to it. Whenever people are in financial distress, though, you'll find crooks cooking up ways to capitalize on misfortune.

As a Sacramento short sale agent, it's easy for me to spot potential mortgage fraud in short sale transactions. There's so much of it. You've got investors trying to double escrow short sales as well. But if a bank requires that all parties sign an Affidavit of Arm's-Length Transaction, all parties are required to sign it and could potentially be held liable for mortgage fraud if they violate the terms. Here is a sample Arm's-Length Transaction Affidavit from Wells Fargo (they really need an editor; man, you can send a lawyer to law school but you can't make them English majors):

"All parties to the contract on the premises dated XXXX, Property address: XXXX, hereby affirm that this is an Arm's-Length Transaction.

"No party to this contract is a family member, business associate or share a business interest with the mortgagor. Further, there are no hidden terms or special understandings between the seller or buyer or their agents or the mortgagee.

"The buyers and sellers nor their agents have any agreements written or implied that will allow the seller to remain in the property as renters or regain ownership of said property at anytime after the execution of this short sale transaction. None of the parties shall receive any proceeds from this transaction except the sales commission."

A short sale bank, one of those 3-letter banks, closed a file yesterday because the buyers didn't return the Arm's-Length Transaction Affidavit in a timely manner. I had badgered the buyer's agent until the cows came home, but he couldn't get the documents back to me. We explained to the bank that the buyers were on vacation and couldn't be reached, but the bank didn't care. It just closed the file. This means the short sale process starts over from scratch, even though the bank now holds the fully executed Arm's-Length Transaction Affidavit. Lovely.