It's been over 3 years since the Avondale market started to tumble, and while it's not still in free-fall, one can tell from the property tax records amongst other resources that housing prices are still declining.
Those under water in Avondale hoping for a miraculous recovery that restores equity and brings them once again above water have, for the most part, grudgingly acknowledged that it's going to take "a while".
In many cases "a while" translates into 15 years or more!
Here's the problem looming on the horizon.
If you lose a property to foreclosure (Trustee Sale) or close escrow on the Short Sale of your property PRIOR to January 1, 2013, the Mortgage Forgiveness Debt Relief Act will still be in effect.
If the property changes hands ON or AFTER that date - you have the privilege of paying income tax on the difference between what your lender(s) receive(s) from the sale, and what you owe your lender(s).
If you owe $250,000 and the lender(s) receive(s) $150,000, you owe income tax on the $100,000 difference - perhaps $30,000?!
If you owe $500,000 and the lender(s) receive(s) $250,000, you owe income tax on the $250,000 difference - perhaps $75,000?!
If you are under water in Avondale, you must evaluate your situation NOW.
What is the current market value of your property?
What do you owe on the property?
When will you be at "break even" or better based on your crystal ball?
Do you intend to own your property until "break even"?
Can you afford the payments until "break even"?
If you don't believe you will be able to hold on to your property in Avondale for the duration, and it changes hands after the Mortgage Forgiveness Debt Relief Act expires, you will be in a real pickle with Uncle Sam and the IRS.
Only you know what the best course of action to follow is with regards to your property that's under water in Avondale.
In order to make an informed decision about how to proceed, you need information.
FREE Tools that provide a current market value of your Avondale property, and calculate your Equity Growth based on the terms of your loan(s) and your prediction of how property values will change in the future, are available in our Homeowner Toolbox on our AvoidForeclosureInPhoenix.com website.
For additional information schedule a FREE Confidential No-Obligation Short Sale Consultation with Haven Express, the leading Short Sale team in Maricopa County.
Call us for help today!
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