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Elizabeth Weintraub
Mortgage Forgiveness Debt Relief Act Extended
In breaking news today, for those of you who have not yet closed your short sale and have been fretting about paying taxes on canceled debt, the fear is over. As part of the Fiscal Cliff deal, both the House and the Senate passed an extension his morning to the 2007 Mortgage Forgiveness Debt Relief Act. The mortgage debt relief act has been extended to January 1, 2014.
This applies to up to $2 million of canceled debt as a result of a foreclosure or a short sale or other modifications for a principal residence to the extent the money was used to buy or improve the property. In California, purchase-money loans are exempt anyway, so this affects primarily sellers with hard money loans. Still. It’s good that the mortgage forgiveness debt relief extension passed for 2013.
NGR is Why Buyers Cancel a Short Sale
Buyers tend to cancel a short sale for NGR.
This Sacramento short sale agent rarely loses a short sale for any reason. Oh, sure, sometimes I will end up with a seller who pleads with me to put her out of misery and to let her home die a faster death through foreclosure, but thank goodness those situations are unusual and scarce. Most sellers want to do a short sale regardless of how painful. They are willing to pay the emotional toll to the troll known as the short sale bank negotiator at their lender’s bank.
My success rate is an open book. Anybody can go to my website and look at my closed short sale transactions for the year. Apart from all of my closed listings, visitors can also view the list of closed short sales in a separate link titled closed short sales in Sacramento. I close short sales from El Dorado County, to Yolo County, Placer County and all the way to the communities of Wilton and Galt in Sacramento. If it’s a short sale, you’ll probably find me there.
I attribute this success to 2 things. I don’t give up, so I don’t listen to the word No. And we try to qualify the buyers. To lessen the chance a buyer will cancel a short sale. A short sale is like juggling many different pieces with a future goal for everybody to all end up in the same place on a certain day, and yet each of those pieces is like a cat, wanting to go in its own direction. You want to juggle cats for a living? Welcome to the life of a Sacramento short sale agent.
We all want to reach that happy spot, the end of the rainbow. And yet, every so often a short sale ends up going back on the market, generally right after it’s been moved into pending status, upon short sale approval. When it does, buyer’s agents call me to ask why the buyer canceled. That’s a normal question but typically the answer is NGR. I’ve weeded out all of the ordinary objections upfront. After short sale approval, there is basically NGR to cancel.
Oh, but what if something is wrong? Like the furnace won’t turn on or god forbid should the bathtub fixtures not match those in the sink? Welcome to home ownership. The next house in 6 months could have something malfunction as well. You want the house, you buy it. You don’t want the house? Next.
I shot the photo on this page yesterday. It is the rainbow over Bora Bora on New Year’s Day. Welcome to 2013.
Happy New Year From Bora Bora
Our beach view welcomes a Happy New Year from Bora Bora.
This is the day to begin learning where the lucky 1 and 3 keys are located on the keyboard and how to write 2013 on my checks. That still leaves the other two components of the date to mess up, though: the day and the month. I often get all 3 wrong. I have no concept of time. Probably because I have no children, no little benchmarks to tell me how old I am getting and how much time has already elapsed. Not to mention, being a Sacramento real estate agent means every day is fun, exciting, challenging and new. So why make a New Year’s resolution?
Why not resolve every day to do your best? To make the changes daily in your life that bring you the most rewards and happiness because if you’re not happy, what is the point of wallowing in unhappiness? What purpose does misery serve? Who needs adversity? If you’re not happy where you live, then make plans to move. Call a real estate agent.
How would you like to be Michael Schoonewagen, the general manager of the St. Regis at Bora Bora? We enjoyed cocktails with Mr. Schoonewagen last night, alongside 100 other guests at the St. Regis as we kicked off New Year’s Eve celebrations. Mr. Schoonewagen says he gets to move to a different country every few years. We approached him after his introductions and speech to hand him a card. On the card, we commended our butler, Kostantin, and our room service fellow, Sebastian, both of whom has provided exemplary service during our visit.
My husband started to say that he felt it was important to share a different kind of voice, apart from those who complain, but I’m not sure it came across the way it was intended because Mr. Schoonewagen responded as though my husband was saying the St. Regis must receive a lot of complaints. Mr. Schoonewagen began to defend that allegation. See, this is the problem when one person speaks two languages against a person who cannot. But what was interesting was the happiness ratio. Mr. Schoonewagen said 97% of the guests at the St. Regis are very happy. All of the time.
Even though, as he pointed out, there is no cinema, no theatre, no entertainment on the level to which we are accustomed in the states. I grabbed Mr. Schoonewagen’s arm and asked him to please shush up and stop filling my husband’s head with those thoughts. But it was too late. My husband had already figured it out. He’s a smart guy. It’s no secret that there is no city life here in French Polynesia on Bora Bora. So, it just means one needs to have two homes, that’s all. If you have to live in a city. As Mr. Schoonewagen pointed out, Bora Bora is only 5 hours by air from Hawaii. This time next year, you could be saying Happy New Year from Bora Bora
Goodbye to 2012 Sacramento Real Estate Market
This past year of 2012 could have been the best of times and also the worst of times but I’m not saying which. No sense making a proclamation. I will say for many sellers of short sales in Sacramento, the year was bitter sweet. It’s a relief to eliminate a financial burden, an albatross around the neck. For many, the road to a short sale was anything but comfortable. Nobody wants to come to the realization that it’s time to get rid of the house. The house they so desperately wanted to buy when it was purchased.
I’ve worked with sellers this past year who did not do a short sale. Believe it or not. Some of my clients were traditional sellers, that is sellers who had equity. Even the clients who were moving out of state, looking forward to a new life elsewhere, were not exactly ecstatic to be forced to release their home by selling it to a complete stranger.
It’s a little odd working with sellers who are not thrilled to be selling. It’s not like the old days, the days of the 1970s . . . and thank god I don’t have to listen to Barry Manilow anymore . . . the days when sellers were making money hand over fist. Sellers were selling even if they didn’t have to sell because there was too much money in their home, equity that was burning a hole in their pockets. They wanted to see it up close and personal. Cash in fist. Selling was a good way to capitalize on their equity.
So was creating paper. I worked with sellers who became buyers by creating a promissory note and recording a trust deed against their residences. These prom notes were often straight notes, without payments and accruing, often annually compounding, interest. Sellers used these prom notes as down payments on other homes, which also carried straight notes secured to them as part of the financing. This was like putting a roulette gun to their heads and not pulling the financial trigger for a few years. Maybe there was a bullet in that gun, maybe not. Riskier today than it sounded back then.
It’s much more straight forward these days. Although, in Sacramento’s frantic real estate market, I have been able to squeeze out a few sales this last quarter for sellers that were not short sales and probably would have or should have been if they had been listed with somebody else. Fortunately, we were able to stretch that sales price far enough to make the home sale an equity sale. That’s the advantage of hiring a Sacramento real estate agent with her finger on the pulse of the Sacramento real estate market. The market shows no signs of letting up. The tide is still rolling in.
Yup. Twice a day in French Polynesia, where I will watch fireworks tonight. Happy New Year to you!
The Best Part for a Short Sale Agent
I’ll cut right to the chase. The best part of a short sale for a Sacramento short sale agent is at closing — but the reason why it’s the best part might surprise you. A fellow short sale agent friend in Virginia says one of her associates reports that she dreads closing a transaction. This agent says when a transaction closes, it means she is in the unemployment line. Out of work. Searching for new business. Depressed. That’s crazy. Because closing is the best part of the short sale for the short sale agent.
It’s not the money. Heaven knows it’s not the money. Short sale agents do 2 to 3 times the work in a short sale over a regular equity transaction for the same amount of money. Why would anybody in her right mind do 2 to 3 times the work for the same amount of money or, even less, because sometimes in a short sale an agent has to discount her commission or kick back some of it to make the deal work for the bank and the seller. What kind of fool would willingly do that? Who knocks herself out like that?
For starters, it’s because that’s where much of the business lies in Sacramento. Something like 1 out of every 3 escrows is a short sale. So, if an agent doesn’t work in the short sale end of the business, she’s missing a lot of business. If an agent specializes in short sales, like this Sacramento short sale agent, she gets a lot of business.
One thing is identical across the board. When the short sale closes, and I get to make that last phone call to the seller to say it has closed, well, that is truly the best part. I can hear the sighs of relief over the phone. The giddiness that it’s over. The happiness of being able to put the ordeal behind.
Because I am in French Polynesia right now, I have missed calling my sellers at closing. I have no cellphone in this part of the South Pacific. My TC calls to let them know; I send an email. But sending an email is not the same thing. It’s especially rewarding the last few days of the year, when sellers are worried about year-end reporting and income taxes like now. I had 4 closings on Friday and I’ll have another 6 or so on Monday. So, my TC gets all of the fun at the moment. She deserves it. She works just as hard and rarely gets to hear first hand how happy sellers are when a short sale closes.
Photo: Sunset in Rangiroa by Elizabeth Weintraub
