The perfect time for a short sale – top 3 reasons
It is this San Jose Short Sale Agent’s opinion that HAFA and the new California anti deficiency law make the time ideal now for homeowners who cannot make their mortgage payments solve their problem without having to worry about extended obligations to the lenders after the sale. If a homeowner has made the difficult decision that letting go of the home is the best solution available for their current situation, here are the top 3 reasons or benefits* available to them.
1. HAFA allows the proceeds of the sale to be used to pay off all of the parties including commissions to the realtors and a $3000 relocation fee to the homeowners and possibly $6000 to pay off a second mortgage. So there is potentially no out of pocket costs to the homeowner to market and sell the home. A big burden off the minds of those who are not familiar with the process.
2. One of the tactics the second lien holders tried to use to extract extra money from the homeowners was approving the short sale but refusing to release the homeowner of the deficiency obligation. Unless you had an astute Realtor who was aware of this trick and refused to go forth without first obtaining a waiver of the deficiency, homeowners were often stuck owing money to the lenders after they sold off the house. NO MORE. The new law says once you permit a short sale approval, the lenders cannot try to retain their deficiency claims.
3. Finally, until the end of 2012, Mortgage Debt Relief Act, relieves the homeowners of the capital gains tax obligations of their mortgage debt being forgiven. Homeowners were often blind-sided by the notion of the forgiven debt being considered capital gains and having to pay taxes on it. Well, until the end of 2012, this potentially huge tax obligation is waived. This could be tens of thousands of dollars. This is huge.
For those who have made up their mind that they need to get out from under their mortgage obligations, the situation is now ideal. All of the potential hurdles that lay in front of them have now been pushed down. The only thing that may be problematic is if the homeowner is in a state of shock or denial and unable to take action, and forcing the lenders to take action for them.
These are general overviews, for specific details, please contact us.
Please always deal with people who have actual experience and have data to prove they have successfully completed and closed multiple short sales. Do your own research, be a smart consumer. There is much at risk if a short sale goes awry.
*These are my opinions. I am not an attorney or a tax professional, so please confirm with them first before making your decision.
