What'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.
The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.
Photo: Big Stock Photo
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