(No) Fun with Liens...

Liens are a headache. This entire week, I went back and forth with a short sale lender regarding liens that were recorded on one of my short sale listings between the time the package was submitted to the lender, and the time the short sale was finally approved.

What type of liens, you ask? Two unpaid utility liens and a Sacramento County property tax lien, totalling about $4,000. Before title can be transferred and title insurance issued, the liens must be paid in full.

Luckily, after several 3-way calls with the title company and lender, lots of faxed documentation, and a couple hours of listening to hold music, I was able to convince the short sale lender to absorb the cost of the liens into the short sale. Phew!...luckily this did not take too long to resolve and it is not going to delay the close of escrow.

Any day that starts off with two written short sale approvals is a GREAT day!

"Erin thinks any day that starts off with two written short sale approvals is a GREAT day!"...that was the update I posted to my facebook page this morning. Ok I'm a geek.

Waiting for me in my inbox at the office were two written short sale approvals - both negotiators are on the east coast, and the faxes had arrived really early this morning.

One of them I have been working on since the first week of August....that's almost 6 months for those of you playing along at home....lender is CitiMortgage....I have had the negotiator on speed dial, calling several times per day....we get 19 days to close the escrow.

The other one I have been working on for just 4 weeks....lender is Wells Fargo....we get 30 days to close the escrow.

February should be an interesting month!!

More fun with the Sacramento Association of Realtors "Young Professionals Council"...

Last night, I attended a fun social function for the Sacramento Association of Realtors "Young Professionals Council." This year I was asked by SAR's president to serve as the Vice Chair of our YPC. We define "young" as members (Realtors) and affiliate members (Title Company reps, Loan Officers, etc.) in their 20's and 30's. Let me tell you - there are some outstanding, great, successful young Realtors and affiliates in Sacramento! I am lucky that they let me hang out with them! ;-)

Home Improvement / Remodeling Cost vs. Real Appraisal Value

Thinking about remodeling your home? Certain home improvements yield a stronger "return on investment" than others...Remodeling Magazine has compiled "Cost vs. Value" statistics regarding which home improvements add more value to your home. You will want to make sure you click on the corresponding region, as the information is different for Sacramento (the Pacific region on the survey, then choose Sacramento) than it will be for other areas. For many types of home improvements, it is unlikely a homeowner will recoup the cost associated with installing the upgrade.

While many renovations improve the look and value of a home, some will not increase the home’s value at all (for example, installing crown moulding - this can run several dollars per linear foot, but will not increase the value of the home)...AND other renovations can actually make it more difficult for a homeowner to resell the home. Some renovations (for example, a built-in swimming pool) may discourage a buyer who views it as requiring too much upkeep that it is too much of a hazard to their small children.

Obviously a homeowner's enjoyment of the upgrades is important, but you will never get dollar-for-dollar increase in your home's value. Anyway, if you are wondering how certain home renovations may affect the resale value of your home, check out the "Cost vs. Value" survey.

Sacramento County Assessor Info

I was fortunate enough last week to attend a presentation by Kenneth Stieger, the Sacramento County Tax Assessor. Did you know he is an elected official??

A few resources he pointed the group to which ya'll may find to be of value:

Sacramento County Assessor 2008 Annual Report; this is a pretty large file. This document encompasses much of what he reviewed with us during his presentation and Q&A. It clearly defines Proposition 8 (no, not that one!) which deals with "decline in value" reassessments, and Proposition 13 which deals with "base year value" and "factored base year value." It also shows the year-over-year growth in the tax rolls, where the money is spent, among other things.

Also, many folks don't know this, however it bears repeating...your assessed value has to do with the "factored base year value" of your property as of January 1 of the previous year. Meaning, the tax bills that you pay in November 2008 (first installment) and April 2009 (second installment) are based on the "factored base year value" of your home in January 2008. Thus, the tax bills that you pay in November 2009, and April 2010 will be based on the "factored base year value" of your home RIGHT NOW. To understand how your "factored base year value" is calculated, you really should read the annual report...there are lots of nuances to this. To over-simplify it, it is your "base year value" (purchase price) plus a 2% adjustment annually.

Remember - the Sacramento County Assessor's office only entertains application to appeal your assessed value from July to the end of November 2009.

HR 600 - New Seller-Funded Downpayment Assistance Legislation Surfaces!!

This evening I received an email from the Nehemiah Corporation that new legistation was introduced in Congress this week that is intended to reform and re-introduce seller-funded downpayment assistance programs (Nehemiah, Ameridream, etc.).

HR 600 apparently replaces last year's HR 6694. Seller funded downpayment assistance programs were eliminated by provisions in HR 3221. If you would like to express support for HR 600 to your local lawmakers, you can visit DPAGroundswell.org.

Good news for homeowners with IRS Tax liens...

According to the California Association of Realtors, the IRS announced it is planning to provide relief to distressed homeowners who are blocked from refinancing or selling their home by federal tax liens. This relief will help people sell their homes, or refinance without having to pay off these tax liens as a part of that process. Since home equity has greatly diminished over the last few years, many homeowners can no longer afford to pay these liens at the time of sale or refinance. According to the IRS, there are more than one million current federal tax liens against real and personal property.

In the case of a refinance, the homeowner may request that the IRS makes its tax lien "subordinate" (aka, secondary) to the mortgage of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS's processing time for subordination or discharge requests has been about 30 days. According to CAR, the IRS is currently working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to the IRS Publication 783 for discharges and Publication 784 for subordinations.

The Product of Listening to Hold Music - Part III...patience anyone?

My latest creation from spending countless time on hold working on my short sales. I spent about 3 hours on the phone with lenders today...these require patience!!


Create your own FACEinHOLE

Ask Erin: What happens to unpaid utility bills on bank owned REO properties in Sacramento?

With so many REO properties on the market for sale in the greater Sacramento area, I feel it is my moral obligation to warn buyers about the ramifications and potential consequences of previously unpaid utility bills.

When a property owner goes into default, along with not making the monthly mortgage payment, many owners stop paying their property taxes, and they also stop paying their utilities - like their water, gas, and electric bills.

When property taxes go unpaid, the county that collects the property taxes will record a lien against the property. When a title company later does a title search to see if there are any liens or other encumbrances, property tax liens pop up and are detailed on the preliminary title report. Easy. It's out there for all to see. Title to the new owner will not be transferred until these liens are paid - usually cleared by the selling entity / bank.

When utilities go unpaid, sometimes liens are recorded. More often, unfortunately, liens are not recorded. This means that unpaid balanaces to the local water district, power company, or gas provider will not show up as liens on the preliminary title report.

What does this mean to a buyer of a foreclosure property?

It means that if you do not take the time to investigate the status of the utility billing to determine if there is a past due amount, and there is a balance due by a previous owner (or even the previous bank owner) - once you take ownership of your new house the utility company may refuse you service until the amount is PAID IN FULL, or they may attempt to collect the entire past due amount FROM YOU.

Buyers - be SURE to investigate this during your escrow. Call the local water district, call the local power company, call the local gas company. Make sure that the bank owner is current on these bills. You will have to call these utility companies anyway to set up your service. If there is a past due balance, be sure to submit documentation to the bank seller prior to the end of the transaction - this way you can be sure the bank seller pays these bills current. Be sure to have your agent ask to see the seller's settlement statement prior to the close of escrow so that paying off these invoices does not get overlooked. After the close of escrow, if a utility company denies you service or bills YOU for this unpaid debt, it is likely you will have no real recourse with the former seller.

Ever stop to wonder what a water bill amounts to if unpaid for 11 months? What about SMUD or PG&E. It can be in the hundreds of dollars. Unfortunately logic does not rule here. Logically speaking, a buyer should be able to provide documentation as to when the transfer of ownership occured, and that should satisfy the utility company to turn service on, or try to collect the unpaid amount from someone else. This is not the case. These companies want to collect - and will do so at your expense. Several agents in my office have learned this lesson the hard way - don't let it happen to you...

New Listing - 4517 Coppola Circle in Elk Grove 95757

This classy Elk Grove property will take your breath away! Situated in the gated Laguna Estates community, you will fall in love with this 2,875 square feet, 5 bedroom, 3 bathroom DR Horton home. No detail was missed... the gourmet kitchen featuring custom granite countertops, full decorative glass tile backsplash, top-of-the-line fixtures, undercabinet task lighting, a stainless double oven, stainless gas range, an island with a breakfast bar, and an eat-in nook. The master suite features a sitting area, and a to-die-for bathroom with dual sinks, a separate tub and shower, and walk-in closet. The backyard is fully landscaped with a spacious patio with a permanent built-in arbour and removable shade structure. Offered at $369,000 - this home is a steal! NOT A SHORT SALE! For more detail and photos, visit http://www.4517coppolacircle.com/.

New Listing - 7157 Parkvale Way in Citrus Heights 95621

Adorable 3 bedroom 2 bathroom home in ideal Citrus Heights location! You will love the newer kitchen appliances, great layout, vaulted ceilings, cozy fireplace, newer composition roof, newer central heat & air, newer water heater, dual pane windows, RV access and more! Don't wait! 7157 Parkvale Way in Citrus Heights is offered at $149,000, subject to lender approval of short sale. For more photos and detail, please visit http://7157ParkvaleWay.com!

First Blog Post of 2009...heading back to Sacramento...

I suppose it is fitting that I am writing my first blog post of 2009 in the airport in Phoenix...I got up this morning waaaayyy too early to catch my flight home. I am meeting with clients who are looking to purchase in East Sacramento this afternoon at my office.

This little trip was a nice little break from the norm...I had a great time with my friends here. Suzanne's next term in medical school starts Monday, so I probably won't get to hang out with her again until this summer.

Anyway, back to Sacramento...I have two new listings coming on the market next week, and several buyers to assist. I know 2009 is going to bring great things! Woohoo!