Erin Attardi, Realtor - Sacramento, CA 916-342-1372

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...

My clients frequently ask me how they can search for open houses in Sacramento. Well, I have created a open house search tool on my website! This feature pulls data directly out of MLS and allows you to search for Sacramento-area (and surrounding counties as well) agent open homes by area, price range, etc. Of course the agent holding the house open has to register the open house in MLS, so this will not catch every single open house, but the majority of them will be listed there. In addition to being able to search for open homes by whatever criteria you like, from there you can also print maps with turn-by-turn driving directions. It is really handy!

So exactly one month after the first post of Erin's Sacramento Short Sale Experiment, I am curious to see exactly what has transpired in the world of short sales in our metro area?

Just to recap, 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 last month: the number of short sales will grow over time, as will their dominance in our greater Sacramento marketplace (overall percentage of listings). For the sake of reference, I am also going to add the number of year-to-date closed short sales in each zip code. Let's see how this new data compares to the "control data" for the experiment...

95624 is the section of Elk Grove closest to Hwy 99. As of right this second according to MLS, there are a total of 280 active listings there. 203/280 listings are short sales. The median price in that zip code in June 2009 was $228,000 according to Trendgraphix. The result vs. the control data from last month? Last month, 68.6% of all active listings in 95624 were short sales, vs. 72.5% this month = INCREASE. Number of YTD closed short sales - 103.

95610 is a section of Citrus Heights. As of right this second according to MLS, there are a total of 126 active listings there. 74/133 listings are short sales. The median price in that zip code in June 2009 was $200,000 according to Trendgraphix. The result vs. the control data from last month? Last month, 60.3% of all active listings in 95610 were short sales, vs. 55.6% this month = DECREASE. Number of YTD closed short sales - 46.

95826 is a section of Rosemont and College Greens. As of right this second according to MLS, there are a total of 90 active listings there. 57/90 listings are short sales. The median price in that zip code in June 2009 was also $184,000 according to Trendgraphix. The result vs. the control data from last month? Last month, 62.2% of all active listings in 95826 were short sales, vs. 63.3% this month = INCREASE. Number of YTD closed short sales - 22.

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 165 active listings there. 26/165 listings are short sales. The median price in that zip code in June 2009 was $330,000 according to Trendgraphix. The result vs. the control data from last month? Last month, 17.0% of all active listings in 95864 were short sales, vs. 15.8% this month = DECREASE. Number of YTD closed short sales - 8.

95818 is a section of Midtown, Land Park, and Curtis Park. As of right this second according to MLS, there are a total of 79 active listings there. 17/79 listings are short sales. The median price in that zip code in June 2009 was $368,000 according to Trendgraphix. The result vs. the control data from last month? Last month, 16.0% of all active listings in 95818 were short sales, vs. 21.5% 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 71 active listings there. 14/70 listings are short sales. The median price in that zip code in June 2009 was $394,000 according to Trendgraphix. The result vs. the control data from last month? Last month, 19.7% of all active listings in 95819 were short sales, vs. 20.0% this month = INCREASE. Number of YTD closed short sales - 4.

So in summary - of the six Sacramento area zip codes I am tracking for my experiment, 4 of them experienced an increase in the number of active short sale listings.

I can tell you from my vast personal short sale experience...in the last few weeks since I posted the first installment of Erin's Sacramento Short Sale Experiment, the number of inquiries from sellers looking for information regarding the possible short sale of their homes has remained very consistent, and I have new short sale listings coming to market this month. Also (you will be aware of this if you follow me on Twitter or Facebook), I have received written approval for 4 separate short sale transactions in the last couple weeks! I expect more short sale approvals in the coming weeks for my other listings...