Early February a seller called to ask if I would mind stopping by her home after hours. It was dark when I arrived. She lived in the back unit of a duplex in East Sacramento. Most entry-level homes in East Sacramento are selling briskly these days as prices have softened a little bit and financing is extremely cheap. It's a good time to buy a home in Sacramento.
This seller bought the duplex several years ago from Fannie Mae. It was a foreclosure home. She had been reading the headlines in the Sacramento Bee about all the foreclosures and short sales in Sacramento and felt she had a pretty good understanding of the market place. She had also spoken to coworkers and family members who urged her to do a short sale. The problem was it was too overwhelming for her to manage an income property and she wanted to return to renting. For some people, renting vs. buying makes more sense.
See, this is why it's smart to contact an East Sacramento agent before putting your home on the market as a short sale. Because it turned out that this seller had equity. She did not need to attempt to do a short sale because she could make a profit. Not only could she make a profit but she could end up with enough money to pay back the first-time home buyer tax credit she received. If you take the tax credit and then sell during the first 3 years, that tax credit needs to be repaid.
I could see the worry lines begin to melt away on her face as we talked. She had no idea that she had equity and could get out of this investment without harming her credit. Now, there are some duplexes that would need to sell as a short sale in East Sacramento, but this wasn't one of those.
I love happy endings. I'm a sucker for happy endings. We closed escrow this week, and the seller made a nice profit. Plus, she was spared the agony of a short sale.