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Sacramento Short Sale Sellers: Look Out For Those SMUD Liens

By
Real Estate Agent with Elizabeth Anne Weintraub, Broker DRE #00697006

sacramento short saleWhat's new in Sacramento short sale land? If you're a Sacramento home owner who has financed energy-efficient improvements for your home through SMUD, you may not realize it but SMUD files a lien against your home. Ordinarily, you wouldn't be concerned about this unless you're facing foreclosure or trying to do a short sale.

The thing that most people don't realize is a SMUD lien survives foreclosure. It is not wiped out. It stays secured to the property, much like a mechanic's lien and a UCC (Uniform Commercial Code) filing.

Say, for example, you install $10,000 worth of new dual pane windows through SMUD, and later you decide to attempt a short sale. Don't get caught broadsided when the first lender refuses to pay off the lien. SMUD won't discount the lien, either, because it's a superior lien.

That leaves 2 options. Either the seller pays the lien out-of-pocket prior to short sale inception or the buyer pays it at closing.

Ask your Sacramento short sale agent to check the preliminary title report upfront to determine whether your home has a SMUD lien filed against it so you aren't surprised with this at closing. I found a SMUD lien on one of my short sale listings recently because it popped up on the prelim. The seller had forgotten it was secured to the home. Fortunately, the seller was able to get rid of it, but not all short sale sellers may be so lucky.

P.S. If you plan to make energy efficient upgrades to your home, check out the Tax Incentives Assistance Project at SMUD. You may qualify for a $1,500 tax incentive.

sacramento short sale agent

The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.

Photo: Big Stock Photo

 

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Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of RE/MAX Gold. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

Comments (12)

Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I had to go research SMUD liens to find out what it was.  Now I know and it makes perfect sense.  There's a lot of stuff you have to stay on top of with those short sales.

Mar 13, 2009 05:37 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

Hi Tammy: Yup. There is something new every day in the wonderful and wacky world of short sales. Just when you think you have seen everything, something new pops up to make you want to yank out your hair by the handfuls.

sacramento short sale agent

Mar 13, 2009 07:00 AM
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

I have never heard of a SMUD lien. I guess we will all be seeing things in the future we never had to deal with in the past.

Mar 13, 2009 08:06 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Elizabeth:  I learn something new everyday from you.  And what a terrible acronym..SMUD! 

Mar 13, 2009 10:05 AM
Sally Dunbar
Lyon Real Estate, Fair Oaks CA (Sacramento Area) - Fair Oaks, CA
Fair Oaks Realtor - Fair Oaks Homes for Sale

Does that stand for Something Menacing Un Disclosed?

Mar 13, 2009 01:16 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

I agree, Chris Ann. It is an awful acronym. It stands for Sacramento Municipal Utility District. It's the equivalent of your electric company. I'll see your Jacks and raise you a SMUD.

sacramento short sale agent

Mar 13, 2009 01:22 PM
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

I was going to ask what's a SMUD lien but you seem to have answered it through the comments.  Is it for past utility bills?

Mar 13, 2009 02:49 PM
Colleen Fischesser Northwest Property Shop
NextHome Experience - Chelan, WA
A Tradition of Trust in the Pacific NW since 1990!

It's always somthing right? All the more reason to work with an experienced Short Sale agent who can help navigate the "smuddy" waters. (Sorry, I just couldn't help myself) LOL!!!

Mar 14, 2009 04:41 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

LOL @ Colleen.  I like it.

Mar 14, 2009 07:16 AM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

Hey Elizabeth, we probably have SMUD here - we do have SMUT, that I do know - but it is certainly worth knowing about this type of lien for potential short sales and/or bank owned. ;-)

I see you and I aren't the only smart mouths on the Rain, huh? Colleen has joined the ranks. ;-)

Pepper

 

Mar 14, 2009 04:55 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Well....while there are days I would trade temperatures...this is one less thing we have to "lien on" wiith Wisconsin short sales...whew ! Blog on my dear...

Mar 14, 2009 11:06 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

You guys are funny.

It's not for unpaid utilities, Barbara, it's for energy-efficient home improvements financed through SMUD.

You know, I was showing a short sale home yesterday, and it was apparent the dual pane windows were new. I asked the seller if they were financed through SMUD. I'm sure she thought it was a weird question, but fortunately, she had paid cash. Whew.

sacramento short sale agent

Mar 15, 2009 02:20 AM