Short Sale Changes
Short Sale Changes
“Effective December 31, 2013 – Short Sales no longer have an automatic waiver of the deficiency. It is even more important now for agents to recommend sellers get advice from their accountant or legal counsel.”
This statement was sent to all agents in our Local St George Real Estate MLS recently. Basically what it means is, up until now if a person entered into and sold his or her home short (for less than they owed) there was no tax penalty. This was because the Federal Government had passed a bill allowing people that sold their homes in a short sale to be forgiven of the tax liabilities associated with it. This is significant not only in our St George real estate market, but across the nation.
Hire A Professional
You my be wondering, “what tax liability? I am struggling right now and had to give my house away and mess up my credit”. Exactly now according to the above statement, if a person sells their house for less than they owe, they will be taxed on the amount they benefit from. If you owe $300,000 on your house and were only able to sell it for $250,000, you would be sent a 1099 tax form to notify you that you will be taxed for $50,000 as if it were income. There are some exceptions to the rule, one of which is proving that you have had some type of hardship that contributed to the short sale. At any rate this is something that requires the help of a trained CPA.
Short Sale Specialist
I work closely with a short sale specialist in the St George Real Estate market. Her expertise is unsurpassed when it comes to helping with a short sale. It is like anything, when someone specializes is something they become better at it than people who dabble in it. She has knowledge of how the various lenders operate, and the nuances of each of them. Armed with this additional knowledge she can expedite the process as much as possible. There is really no way to hurry the bank as they work through their tedious, slow and drawn out process. The St George Real Estate market short sale specialist assures that the bank is never waiting for the person listing their home.
Short Sale May Not Be a Good Idea
In our St George Real Estate market it may be a good idea to wait for the market as it continues to climb. Many people have been fortunate enough to see their home values climb to where they can sell and put a little money in their pockets. In spite of the slow economy, real estate values continue to climb. There is a difference in the climb we are currently experiencing and the bubble that burst a few years ago. The increase in the St George Real Estate market values this time is more gradual and consistent. Professionals in the real estate industry believe that this increase will be sustained and more consistent. All of that being said it might be a good idea to hang on a little longer, if at all possible, rather than short sale. This is even more important given the new tax penalty. Of course it is impossible to guarantee consistent growth.
