What did I say on December 18th? Lender's can't afford just to completely write off all the losses from short sales and not giving 1099's to the bailing home owners. So what's the new trend in short sales? Promissory notes the homeowner is to sign to indemnify the lender against the loss. No thanks, I'll take my 1099 and take my chances with the IRS.
It's not coming - it's happening.
AGENTS: When you are making an offer on a short sale you will need to be aware of this. It's nothing new but it's "the trend" among lenders because of the change in the law with 1099's. It's not your responsibility as the buyer's representative but you will encounter it. I was at a meeting with Lane Bailey this morning when an IM came on my Treo that a buyer is wanting to back out of a "cleared to close" short sale because he feels so bad for the seller because the lender is requiring them to sign a $25,000 promissory.
BUYERS: This doesn't affect you it affects the seller. It doesn't affect the deal unless the seller refuses to sign a promissory note and then it could kill the deal or not. Take it one step at a time and you may only want to prepare the seller for it as in it being a possibility until we see how prolific this becomes.
I have been doing and teaching short sales for many years. It seems like now there are short sale "experts" at every turn. Taking a course or being an agent on a couple of short sales does not make one a short sale expert.
At the very least you need to download my book "Ten Mistakes Every Real Estate Investor Makes" (Copyright 2005)
Copyright©2008 Ken Cook. Georgia and Florida real estate investment loans, FHASecure and FHA Home Loans, nationwide commercial hard money and small business loans.
Comments(17)