Skip down to page content.

Real Estate Market

Have you Thought About Short Selling Your Home?

Is a Short Sale Looming?

 

When you owe more on your home than it’s worth, but you have to sell, you need to squeeze every dollar possible from the sale. Here are seven tips for navigating the short-sale process.

1. Know who you owe

A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you.

2. Pick your short sale team

You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three, and listen carefully for signs that they understand the complexities of the short sale process.

Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success.

3. Get your documents ready

Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years.

4. Expect delays

Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale—and even longer if you must negotiate with more than one lender or lienholder.

Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays.

5. Anticipate demands

Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete?

6. Know the tax implications

Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.

7. Consider how the short sale will affect your credit and what you must pay

Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy.

Ask you lawyer whether you’ll be responsible for paying back the lenders’ loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.


This article includes general information about tax laws and consequences, but isn’t intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

G.M. Filisko is an attorney and award-winning writer. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Read more: http://buyandsell.houselogic.com/articles/7-tips-short-sale-success/#ixzz1j84rTMmU

 

 

Quick Facts

WHAT SELLS?

The typical home purchased was 1,780 sq ft, was built in 1990, and had three bedrooms and two bathrooms, according to NAR’s 2010 survey of buyers and sellers

Read more: http://buyandsell.houselogic.com/#ixzz1j8AoffI9

APPEALING TO BUYERS

44% of sellers offered incentives, like home warranties and help with closing costs, to attract buyers, according to NAR’s 2010 survey of buyers and sellers

Read more: http://buyandsell.houselogic.com/#ixzz1j8ABE8kH

         THE PRICE IS RIGHT

         Recent sellers typically sold their homes for 96% of the listing price; 57% reduced the asking price at least                                     once, says NAR’s 2010 survey of buyers and sellers 

Read more: http://buyandsell.houselogic.com/#ixzz1j8B616P

 

 

 

Shortage of Properties For Sale in The Southern California Area

 

This has been a challenging couple of months in the Southern California Housing Market. Homes for sale on the MLS are down dramatically  from inventories seen last year. Reasons are that there are so many home buyers participating in the market. Many are qualified but must compete with each other for the slim inventory. Investors tired of collecting very little on their money in the bank are looking for more productive tools to invest their dormant funds in. They are buying homes from bank sales but instead of rehabbing and flipping to sell, they are rehabbing and renting back, therefore causing a shortage of homes for sale. 

Contact Information

Photo of Barry and Debra Kessler Real Estate
Barry and Debra Kessler
CENTURY 21 Troop Real Estate
3200 East Los Angeles Avenue
Simi Valley CA 93065
Direct: 818-426-6415
805-422-2200