Right now if you are a homeowner who short sales your primary residence, the Mortgage Debt Relief Act of 2007 will allow the ‘forgiven’ debt by the banks to be non-taxable income (read IRS publication 4681 for all information) to you, the selling homeowner, on your principal residence (with some caveats). This remains good news for short sale homeowners right now.
Unfortunately, short sales take time…some more time than others and one never knows how a bank is going to be once a buyer's offer is presented to them that is less than the dollar amount owed on the mortgage. As a North Kingstown short sale agent, I have had short sale sellers that have reached negotiated settlements and waiver of deficiency judgments in as long as 4 months. Remember the first buyer may back out and even the second and there you are losing time finding another buyer for your home...as the time clock ticks by.
If you are in a hardship situation and are thinking about selling your home, meet with an experienced short sale realtor now. Getting your home on the real estate market needs to happen sooner rather than later.
Right now the government is not talking about extending this Mortgage Debt Relief Act of 2007 program. What it means to you, the homeowner, selling your home as a short sale is that if you close after 12/31/12, you will be responsible for paying Federal income taxes on the amount the bank forgave on your mortgage. So not only have you had to sell your home but now you must come up with the money to pay Uncle Sam (IRS). I am not a certified public accountant but I recommend that you meet with a CPA to talk about the tax consequences of any short sale action you may do.
It is important to be ahead of the curve on the short sale issue coming at struggling homeowners by the end of 2012. Be prepared and meet with a short sale agent that will work with you to get your home on the real estate market and marketed well, get a bona fide offer on your home, negotiate the best settlement deal with the bank and get it closed BEFORE 12/31/12. Have the short sale discussion and be ready to go in the New Year.
As North Kingstown short sale agents, my team helps RI homeowners everyday through the short sale process successfully. Call me at 401.529.7849 today for a confidential discussion on your home and mortgage situation. Timing of Short Sales in 2012.
Ginny Lacey Gorman is a North Kingstown Realtor who works and knows the North Kingstown RI geographic area of homes for sale, schools, happenings, important tidbits of information and businesses well. Waterfront, water view, ocean front, luxury and coastal RI real estate are her specialty, so call Ginny for your buying and selling home needs. As North Kingstown short sale agents, she and her team helps clients navigate successfully the rough short sale waters throughout RI, contact Ginny if you are having trouble paying your mortgage. When you are in need of an internet savvy RI realtor® who sells homes in this real estate market, call Ginny today at 401.529.7849.