A Short Sale may be the answer for you…
It’s common place to see short sales in our current market. What is a short sale? It’s when a bank accepts a lower than owed price for the property and in return releases their stake in the property. Done…not yet! You might receive an IRS form 1099 for the difference of what you owed and what the bank accepts by the next buyer at the end of the year. What you say? The difference is looked at as a “gain” in accounting terms. The bank took the loss…you have the gain.
Then what’s the advantage of a Short Sale? In December 2007, President Bush signed into law The Mortgage Relief Act of 2007. What the law allows is that if you’re in a hardship position with your sole and primary residence and you sell or lose it to foreclosure then your “gain” will not be taxed. That’s a summary and should be read and understood.
What is a hardship? You can’t have a laundry list of real properties and your garage can’t be filled with the latest in European sports cars.
In today’s market, Short sales are good for everyone including the bank.
•• The seller get’s to dump the property.
•• The buyer get’s a good deal.
•• And the bank doesn’t want another foreclosure…banks lose thousands monthly on their Real Estate Owned (REO) properties…watering the grass, turning on the lights, the cost of marketing the home, etc…
