The debt forgiveness act was implemented during the Bush administration, “forgiving” the offset amount between what a short sale seller owed on their loan to their bank and the price a short sale home sold for.
So hence the name “short sale”. It was not an indicator of time, because most short sales take on a longer than normal escrow life.
During the end of 2012 and within the first two months of 2013, many of our short sale sellers in the SCV and in other Southern California cities were a bit nervous because the “deft forgiveness” act was talked about being extended, but it did not seem anyone was moving.
It was not until the early months in 2013 that the debt forgiveness act was extended until December 31, 2013.
All was well, and our Paris911 Team at REMAX of Valencia CA handled many short sales and received positive outcomes for our Short Sale Sellers and Buyers.
In the local markets, in and around the Greater Los Angeles areas and within the cities in which our REMAX offices are Head Quartered, in the Santa Clarita Valley, we have been on a rise regarding real estate equity.
There are a lot fewer underwater homes than in the short sale heyday. For the first time in a long while, most of the local Santa Clarita home owners are in a Positive light if they were to sell their homes in the current market.
Depending on the location and amenities their home contains, will depend on how fast and for how much we can obtain.
Even with the market slowdown of 2013’s winter and holiday months, we are still seeing buyers that are willing to buy real estate at the fair market value, so in most seller’s worlds – all is still business as usual(just not as fast).
Later this last week, we received two phone calls from two different couples that were going to have their mortgage situation change with regard to their home loans. Apparently, they were able to obtain some type of “loan modification”, that was not all it was cracked up to be.
It was not a matter of them not reading the small print, they did that. It is a matter of a change in health coverage and their families premiums being increased.
That coupled with their home needing to be re-financed due to a “negative amortization” loan, is going to be placing them in a bind.
They are needing to short sale their specific residences. We are currently speaking with both parties, and this was my ‘catalyst’ for this blog post about Santa Clarita Short Sales.
Word on the street is, because the short sale sellers are not making any “real money” from short selling their homes and because it is a “distressed” type of sale, the debt forgiveness will still apply during the years following 2013.
Apparently, it has something to do with the tax code and it not applying in terms of the difference with regard to short sales.
I have attached a PDF from the National Association of Realtors for your interpretation.
As always, even if you are hiring our REMAX of Santa Clarita Paris911 Team to negotiate your short sale, make sure you are speaking with other experts, such as a CPA or Tax Attorney(to be certain), as we mandate that all of our Short Sale clients do.
What I’m saying, in a nut shell, if you are wanting to move forward with a short sale in 2014 or 2015, all is not lost. Just make sure you are speaking with those that know what they are doing and have a proven track record of being able to complete the tasks related to Short Selling your Real Estate. Contact us at the Paris911 Team when you are ready for our help.