Get the facts about Palm Beach County Short Sales or short sales for anywhere in the state of Florida.
I have been on the phone this week with 3 homeowners and 1 real estate agent who have been so misinformed about short sales. It made me think that there must be a lot more people out there that are misinformed.
You can read our series on short sale information at: Short-Sales-Florida.com.
Things change often, rules change often in Short Sales. What a lender says is the way it is one day may change tomorrow.
Two of the people I spoke with this week were given incorrect information from agents who have a Certified Short Sale designation or certificate or loss mitigation certification. Just because someone has been certified does not make them an expert. Check their references of homeowners whom they have successfuuly negotiated short sales for.
One of the callers had her house listed with an expert short sale agent who gave her incorrect information about if she would get a 1099 or not.
These are the facts:
- If your home is your primary residence and has been for 2 out of the last 5 years, the homesteaded property in the state of Florida you will get a 1099 for the short fall in January of the following year. However, the debt relief act that President Bush signed into law says that the IRS will not treat that short sale loss as a gain or ordinary income. This law is in place until December of 2009. Most lenders are going to send one out to you because they do not have systems in place to differentiate from those who should get one and those who don't. You will need to take that to your accountant and make sure your accountant knows about that act.
- If the property that you are doing a short sale on is NOT your primary residence, meaning that you used it as an income property, bought it for your kids or parents, etc, than you will get a 1099 and it will be according to the IRS treated as income for tax purposes. I think this stinks but I can't seem to get the IRS to listen to me:). What you can do is talk to your accountant. You can see if you are insolvent. The insolvency then may wipe out your gain. Also, remember that you have losses to report as well. Make sure you keep your closing statements because those closing fees, some of them you can add to your loss. I am not an accountant so check with an accountant to help you mitigate the damage. Most of our investor listings are so upside down that they will be insolvent at the end of the day.
- If your property is an investment property you may still qualify to do a short sale which is still way better than a foreclosure. One of the biggest myths is that you can NOT do a short sale if this is an investment property. We have closed many investor short sale properties with very little to no deficiencies.
- If you have money in the bank, have a job and have retirement accounts you still may be able to do a short sale. This is another falacy running wild out there! It is not true that you can not do a short sale if you have money. What is true is that the more money you have and the better your credit scrore, the more money the lender will expect you to bring to the table to mitigage their loss.We have negotiated $140,000 requests from lenders to homeowners to pitch in down to $27,000 and less depending on what the money our client has is used for. It is far better to pay a deficiency of $27,000 and make it go away than getting a deficiency of the entire $140,000 plus more after a foreclosure.
- In the state of Florida which is a deficiency state you may or may not get a fully satisfied paid as agreed status on your short sale. We will write another article with the different types of outcomes you can expect to happen. If you have a HELOC as a second, that is a Home Equity Line of Credit or PMI, Private Mortgage Insurance you will most likely these days not get away with getting a totally and fully satisfied mortgage reporting. HELOCs are treated differently than mortgages and most of them require some sort of payment. We have been able to get this amount reduced and have been able to get the amount negotiated from buyers or the sellers borrowed the money from their parents, ect to make it work because it is still far better than a foreclosure.
So please read our series on short sales in Florida in order to better understand what a short sale is and how we will proceed on with the short sale. Call Nestor Gasset or Katerina Gasset at 561-753-0135 for futher details and your confidential short sale intake evaluation.
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Contact Nestor Gasset and Katerina Gasset, CIPS, Realtors®, International Properties and Investments, Inc. Licensed Realtors® in Florida at 561-753-0135 to list your property for sale or to purchase a property in Wellington, Royal Palm Beach, Loxahatchee, Lake Worth, Hypoluxo Island, Lantana, West Palm Beach and the rest of Palm Beach County Florida and Port St Lucie Florida. We are accepting referrals.
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Copyright © 2009 By Katerina Gasset, All Rights Reserved.*Get The Facts! Palm Beach County Short Sales*
The original blog is posted at South-Florida-Luxury-Living.com.
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