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Elizabeth Weintraub
Do Sacramento Buyer’s Agents Push Up Home Values?
Here is a new dig about real estate agents that I haven’t heard before. A potential seller of a home in Land Park called to talk about her overpriced home and how it got that way. During the conversation about how and why she paid too much for it — which I’ll get to another day in another blog — she mentioned that she was trying to buy a home in East Bay. When I mentioned I have a close friend who works in her targeted city and she might want to contact that agent to see homes, the caller threw out this crazy idea.
What I believe she was saying is that she doesn’t trust real estate agents, which is too bad. Because there are many excellent real estate agents in the business, and not every agent should be painted with the same tainted brush due to a few bad apples. This home buyer was reluctant to work with a Sacramento buyer’s agent who is a neighborhood specialist, i.e. an agent who works and lives in the neighborhood. Her feeling was the agent would try to drive up prices in the neighborhood by making her pay more for a home.
In other words, she believed the agent would not in good faith negotiate on her behalf in order to make the agent’s own home worth more. What? First, I told her, understand that agents are highly unlikely to try to push her to pay more to increase an agent’s own home value because they’re just not that diabolical. Second, comparable sales are good for only 3 months and unless a person is selling her home within that 3-month period, that sale won’t matter one little bit. A home that sold last year has no bearing on home values this year. Not to mention, one home sale does not increase the value in any given neighborhood.
What buyer’s agents want first and foremost is to make their buyers happy. They want satisfied buyers, buyers who are thrilled with the purchase of their new home and with the agent’s performance. Also, because they are home buyers who someday will be a seller, and the agent wants to eventually list the home as well. Agents want clients for life.
Buyer’s agents who are REALTORS have a fiduciary to the buyer and must hold that buyer’s interests above their own. Not only that, but Sacramento buyer’s agents want to get paid. They want to close the transaction but not at all costs. They are more focused on bringing together a buyer and seller on price than on manipulation of said price. A Sacramento buyer’s agent will do everything in her power to represent the buyer to her fullest and best abilities. Moreover, that neighborhood specialist will probably know more about the neighborhood than an out-of-area agent, which would be to her advantage!
A client called a few days ago to ask if I remembered her. I recognized her voice immediately. I also have Caller ID (ha, ha). She bought a bank-owned home in College Greens 5 years ago, and today it is worth considerably more than she paid for it. Location is everything, I reminded her. She bought in an excellent neighborhood and on a highly desirable street. She was just calling to say thanks for the holiday card. It was delightful to chat with her.
That’s the kind of happy buyer I want. It’s the kind of happy buyer just about every Sacramento real estate agent is after.
Franchise Tax Board Exempts Short Sale Taxes in California
For those of you who follow my Sacramento real estate blog and listen to me blab, you already know that the IRS has issued its IRS mortgage debt relief letter that exempts certain California residents on a federal level from paying tax on the deficiency after a short sale. Everybody wants to know about short sale taxes in California, and now you can read the IRS response to short sale letter at Scribd. This isn’t much help to homeowners in other states, but I sell real estate in California, so I follow closely mostly what happens to short sale sellers in Sacramento.
This morning I feel like one of those Ron Popeil commercials, but wait, there is MORE! Not only are most short sale sellers in California exempt from paying tax on mortgage debt relief to the IRS, but the State of California has issued a letter ruling that Californians are exempt from state income tax liability for a short sale as well. Short sale taxes in California just headed south. The letter was issued by the California Franchise Tax Board and obtained by the California State Board of Equalization, as announced by the California Association of REALTORS, working with Senator Barbara Boxer.
What does all of this mean? It means while homeowners are left chewing on their fingernails about the 2007 Mortgage Forgiveness Debt Relief Act expiring at the end of 2013, coupled with the fact California still has not extended its own version of the act for 2012, that sellers can pretty much raise a middle finger and call it a day. Goodbye short sale taxes in California. Doesn’t seem to much matter what our legislators do, on a national or state level, because we now have letters of clarification that provide protection for the bulk of distressed sellers after a short sale.
George Runner, a member of the Board of Equalization, is in the spotlight for obtaining the letter. I can’t find the letter on his website, though. For the interim, those of you who would be exempt if our men and women in the legislature had ever gotten it together enough to rub two nickels and pass the darn exemption, can coast through this concern. Be sure to check with your accountant to ensure that and your short sale qualifies for the exemption from mortgage debt relief.
Tips for Your Short Sale Hardship Letter
When I originally wrote How to Write a Hardship Letter, I did so as a link that I could use to send to my clients as well as creating a useful article for others contemplating a short sale. Whenever I find myself repeating a scenario, I figure it’s probably worth writing an article about. That way I no longer repeat it, and I can just send my clients a link to read.
A seller emailed that she laughed and laughed when she read my article. I was snuggling into bed with my husband, about to read an eBook on my iPad when I noticed the email, so I clicked to read my hardship letter piece. It is rather amusing, I suppose; I was focused. Especially the part about not getting waylaid and fooled into writing that things will get better. Not only will they most likely not improve for sellers who are severely upside down, but the bank doesn’t want to hear that they will improve. If the bank thinks a seller’s situation is temporary, the bank will not approve the short sale.
Another seller called to say she could afford to make her mortgage payments, and her lender, upon review of her financial statements, most likely would also agree that she could afford to make her mortgage payments. This seller apparently enjoys disposable income and makes a good living. She’s just tired of her home being upside down. That’s not enough of a reason to do a short sale through her particular lender.
There are a few lenders that will let a seller do a short sale without a hardship, but most of them want a documented hardship through a hardship letter. This doesn’t mean you make up crap, but there are ways to prove a hardship, which a seller might not be aware about. For example, if you’re retiring and moving away, that’s a hardship. On the other hand, paying for your daughter’s ballet classes and French lessons are not valid hardships.
If you want to know if you qualify for a short sale, call an experienced Sacramento short sale agent to discuss it. I always offer a free consultation to potential short sale clients. You can call Elizabeth Weintraub at 916 233 6759. But don’t call me to pick my brain and then hire another agent. That’s not cool.
Did You Know Ringworm is a Fungus?
Every four-legged creature in my house hates me, even though what we are doing is for their own darned good — kinda like when I have to explain to a seller why she needs to fix up her home to sell or when I have to tell a buyer’s agent that the bank says her buyer needs to pay more to buy that Sacramento short sale, and the reactions I receive. It’s a familiar feeling. I’m like that walnut in Plants vs. Zombies when you give it plant food, though. Holding power.
If you’ve never had to deal with ringworm, you’re fortunate. I was fortunate for 60-some years until a few weeks ago. The vet says our new Ocicat, who came from a breeder in Auburn, is most likely the carrier — but you know how small some people are; things like this, they would never own up to it unless we forced the issue, and it’s just not worth the hassle we’ve already got. Little Tessa is the only new thing in the house.
Ringworm is a fungus and not a worm, which is a fact I wish I did not have to know, but now that I do, I’ll share that bit of information with you. I first discovered it because I looked in the mirror a few weeks ago. Polka-dot city was all over my face. I looked like a kid with measles, only really large 1960’s type of polka dots, as though the ghost of Andy Warhol broke into the house and painted my face while I slept. Was counting my lucky stars, believe you me, that I have a dermatologist who could immediately see me and take care of this. But the cats take longer to clear up.
We had to wash every piece of cloth material in the house. Thank goodness we don’t have carpeting. We threw out all of their toys and scratching pads, thoroughly vacuumed and recovered the 3 cat condos (which we’ll eventually discard) and closed off the formal living area of our home from the rest of it. The Ragdoll, Jackson, who is most susceptible, has to live in a back bedroom and bath, while the other two Ocicats are isolated to the family room and kitchen.
All 3 cats receive terbinafine cream twice a day and pills once a day. The vet shaved their infected areas. The highlight of yesterday was giving all 3 cats a medicated bath. They are now bathed once a week. I have a lot of experience with bathing cats because I used to live in flea city on Balboa Peninsula in Newport Beach, so my poor husband is spared this chore and now must admit something good came out of living in Orange County. While all of this is going on, I’m talking on my Bluetooth to sellers from Elk Grove, Sacramento and West Sacramento who want to put their homes on the market this week and next.
It was like yesterday was the aftermath explosion from Thanksgiving dinners all over Sacramento, during which family members said, “Hey, you should sell that Sacramento home and call Elizabeth Weintraub.” I don’t have any other rationale for this sudden burst of listing activity. Good thing I can do a fairly decent job at multitasking and am organized.
As for the fungus, well, I’m almost wishing I had kids with nits.
Real Estate Predictions for 2014 and Nebraska
Everybody loves a top 10 list, and a list of the top 10 real estate predictions for 2014 is what every real estate publication across the country is trying to create at the moment — to capitalize on our uncertainty in the real estate market. If you don’t look too far, you’ll also find a bunch of year-in-review articles, as though we need to be reminded of what happened 11 or fewer months ago, in case we’ve gone half senile during that time period.
I create my top 10 list of a real estate forecast every year for About.com as its home buying expert. Most of the time, I’m right on the nose. That’s not because I have some sort of super power, but because I look at the way things are going and figure they’ll pretty much continue in that same direction. Oh, we might have a little up and a little down, but most of the time, if things are moving upwards, say, for at least 3 to 4 months, that’s a trend that will continue.
The main difference between last year and our new year of 2014 will be that last year, meaning this year now, will have experienced wilder swings. In Sacramento, for example, we’ve watched the prices of entry-level homes soar through the second quarter of 2013. When home prices shot up, buyers became nervous and started asking questions about whether we are in another real estate bubble. Seriously? Oh, yes, I see, they were born on the cusp of Rain Man meets Enya during the Reagan Administration, with no reference points prior.
You want to see old people in their element, I tell ya, you should see the movie Nebraska now playing at the Tower Theatre in Land Park. Nothing against the state of Nebraska, but the director elevated the winter wheat fields of Nebraska to an art form. It stars Bruce Dern in an endearing role. There were belly laughs in unexpected places during the movie. And lots of old people, many of whom I recognized from my own lineage, and I suspect some of the actors actually live in Nebraska and are not actors. It’s their not being actors that created some of the hilarity.
The movie is about this old guy, Bruce Dern, who gets a letter in the mail from a place like the Publisher’s Clearing House, informing him that he has won a million dollars if he has the winning number. To collect, he decides to go to Lincoln, Nebraska, even if he has to walk all the way, because you can’t trust the mail with such an enormous task. His son steps in to drive him, primarily, it seems, because the stubborn ol’ fool kept otherwise wandering off down the highway.
I can’t tell you anymore about the movie because I don’t want to spoil it when you can see it for yourself. Just like I can’t tell you anymore about my 2014 real estate predictions and forecast, when you can read it for yourself at the link in the first paragraph of this blog.
