Email Elizabethsacramento short sales
The Sacramento Short Sales Nobody Wants
It’s not surprising that I often agree to tackle the Sacramento short sales that no other real estate agent in Sacramento wants to handle. That’s because I don’t discriminate. As long as the seller’s situation warrants a short sale and this agent can see that short sale closing, I will list it, sell it, negotiate it and close it. If I don’t believe the short sale will close, I don’t accept the listing. Keeps life simple.
But what I think will close and what another agent in Sacramento believes will close is often two different things. That’s because there are agents who will not touch a short sale in which the seller owes money to more than one lender. These agents do not want to work on a short sale with two loans or more. They’ve been burned once or twice by second lenders so they automatically assume all second lenders are reluctant to cooperate with a short sale or they want to blackball certain lenders, which is so wrong.
Every short sale is unique. Every short sale is different. What a second lender might do in one transaction could be the opposite in another. Any Sacramento short sale agent worth her salt knows that it’s a defeatist attitude to automatically wish for the worst.
I’m thinking the reason that agents might lose enthusiasm for a short sale is because they probably haven’t closed enough of them. According to Trendgraphix, I have closed more than $65 million in short sales, more than any other short sale agent in the Sacramento seven-county area over the past 8 years. I’ve learned a thing or two negotiating this volume of short sales. The most important is not to be overly judgmental and to deal with the facts at hand. If it’s a little bit extra work for me, so what? That’s what I’m paid to do.
Just closed a short sale last month in which well-meaning buyer’s agents predicted disaster. They didn’t want their buyers to make an offer on the home because they thought the roof needed too much work. You know what? The roof never came up, and it sold FHA. The home inspector did not find any problems, either. Agents also thought the home was priced too high, yet it sold for a little bit more than its original list price. Other agents complained that the short sale had two loans and would take too long to get approval, if the second lender agreed at all because some agents had a bad experience with that particular lender.
The facts are we accepted an offer on October 18th, and we closed escrow on December 23rd. We had short sale approval from both lenders before the end of November. Plus, the seller pocketed $3,000 through the HAFA short sale program at closing. Everybody was happy, except those naysayer buyer’s agents who did not go to escrow due to ignorance.
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.
Can You Buy a Preforeclosure Home in Sacramento?
Lots of preforeclosure buyers contact this Sacramento real estate agent because I post my goofy-ass face on other real estate websites and often participate in online discussions about homebuying in my spare time. My husband doesn’t understand why I do it. He thinks I should do something else with my free time like going out to dinner or hiking in the foothills or searching the Internet for great airfares to Iceland. But then he didn’t understand why I agreed to be on a House Hunters show about short sales, either.
Most normal people, when they are away from work, focus on other things, stuff that is more fun to them. They lead what is known in some circles as a balanced life. Then there are those of us that belong to that special breed of craziness, those of us who are actually doing a job we completely love to the point that it’s totally fun and not work. We are passionate about our work. If that work also involves short sales, foreclosures and preforeclosures, it’s just that much more interesting.
Any person with reasonable intelligence (and some with less than that) can be successful in real estate and sell a home. Some of us go a step or two beyond because that’s what buyers want from us. They want us to possess the skills to buy a foreclosure, buy a short sale or buy that terrific preforeclosure home they saw advertised on another website for some ridiculously low price.
The problem with that is the pre-foreclosures are not for sale. These are homes made public because the sellers are in default. It’s not that easy to buy a preforeclosure but it can be done under certain circumstances. It’s recognizing those certain circumstances that make the difference.
For most Sacramento home buyers, though, buying a preforeclosure will never happen. That’s because they don’t really want a pre-foreclosure, they just think they do. What they want, what they really, really want is a good deal. That’s not necessarily a preforeclosure.
Sacramento Short Sales Mortgage Debt Relief IRS Letter
Sacramento sellers who expect to close on a short sale in 2014 have a very good reason to send flowers to Sen. Barbara Boxer and, while they’re at it, maybe C.A.R. as well. I received the best news this morning, which I can’t wait to share with everyone because it’s about mortgage debt relief. Taxation on mortgage debt relief has been on the tongue of every single short sale seller I have talked to who might have to close escrow next year.
In a nutshell, we have no worries about federal taxation on mortgage debt relief resulting from most closed short sales in California from here on out. Other states, they probably have cause for concern, but not California. What makes California so special apart from our sunny weather, smog-hidden mountains and polluted oceans, and let’s not forget Cal Worthington? We’ve got California Civil Code 580e, resulting from the passing several years ago of SB 458.
Under ordinary circumstances, the federal tax code says if a person has had debt canceled, the amount that was forgiven is subject to taxation. However, in 2007, the Mortgage Debt Forgiveness Act passed that says taxation on canceled debt does not apply to a short sale, subject to certain criteria. Every year, the mortgage debt relief protection has expired and every year the federal government has extended it. This year, it’s not yet been extended because our lovely legislators continue to wrap in the mortgage debt relief extension with other legislation that won’t get passed even if they lined up every legislator against the wall, blindfolded them and threatened to shoot them all at will.
This political game has caused short sale sellers in Sacramento extraordinary grief and stress. Many of my sellers have called to say they don’t know what they will do if we can’t close their short sale by December 31st, 2013, when the federal mortgage debt relief protection expires.
However, the argument brought forth to the I.R.S. by Sen. Barbara Boxer, with C.A.R.’s assistance, is that sellers are released from personal liability in a short sale under California Civil Code 580e, and that makes short sales non-recourse, so why should a seller be subject to federal taxation on top of it? The I.R.S. agreed and issued a letter that said California short sales protected by our California Civil Code 580e are not subject to federal taxation for mortgage debt relief. This is huge!
C.A.R. and Sen. Barbara Boxer are working on a similar letter from the state of California, which is expected to follow suit.
A Short Sale Home in Woodland Closes
The first time I spoke to a particular seller of a home in Woodland, this Sacramento real estate agent was in the middle of a four-day vacation in South Carolina at Hilton Head. My husband and I were driving across the island, searching for a restaurant featuring Gullah cuisine when my cellphone rang. The seller was such a refreshing voice to hear. A person who wanted my help. I like to help people, that’s why I sell real estate.
Unlike a caller earlier that day, a seller from Folsom who was furious because I had answered my phone “when I was not at home.” On a Sunday, no less. He expected me to physically be in Sacramento and was very upset that I was not, even though it didn’t make one hill of beans difference regarding the sale of his home in Folsom. He evidently believed that he knew better how to run my business than I. Not every seller is a rational person and not every seller makes sense.
This person yelled and screamed and was obnoxious. I offered to cancel the listing for him, since he was so irate. Nasty people? No time for them. So, it didn’t bother me in the least when he immediately listed with another agent at a higher price. Last I saw of his home he had canceled that listing 30 days later because no buyer in her right mind wanted to pay his price. Sometimes, these types of things are a blessing in disguise when I no longer have to deal with them.
The woman who called and needed my help wanted to sell a short sale home in Woodland as a short sale. Well, I sell hundreds of Sacramento short sales, so she came to the right person at the right time. Turned out she lived in North Carolina, and was astonished to hear I was driving around South Carolina. But she had confidence that I would sell her home. She had gone to my website and knew my experience and decades in the business. It didn’t matter to her that I was in Hilton Head at the moment.
Later that week, I met with the tenant who lived in the home in Woodland. I shot professional photographs, studied the comparable sales and the seller chose a sales price. Other real estate agents in Woodland expressed an opinion that they thought the price was too high but it was right on the money. We received an offer from a qualified buyer, the BPO came back at value, and the short sale home in Woodland closed yesterday.
The negotiations took 5 months. Two loans plus mortgage insurance, so approval was necessary from all three. The buyer waited patiently all of this time because the seller selected the right buyer from the beginning. An added bonus was the bank did not require a price increase because prices have gone up since then. That can happen with short sales that take a while to close, just fyi.
The thing is no matter where I am or what I am doing, this Sacramento real estate agent always tries to answer her phone. I continually work on selling my listings. I don’t turnover my work to an Elizabeth Weintraub Team member while I am on vacation, although I certainly could. Because I don’t have to be sitting behind my desk to sell real estate in the Sacramento Valley. That’s why we have laptops, iPads, cellphones and DocuSign. What matters is that I get the job done and my client is happy.
