Short Sale Now- Short Sale Later- Timing can be Everything.
In talking about the Mortgage Debt Relief Act of 2007,
we are getting closer to the deadline of December 31, 2012 when this act will expire. What does this mean for you and how does it impact you? Well Bob Hertzgog, my Arizona associate, explains in detail how it will impact you if you are struggling to pay your mortgage and are thinking about but not yet ready to short sale sell your home yet (by the way, RI does not have an anti-deficiency statute as AZ has).
Right now if you are a homeowner who short sales your primary residence, the Mortgage Debt Relief Act of 2007 will allow the ‘forgiven’ debt by the banks to be non-taxable income (read IRS publication 4681 for all information) to you, the selling homeowner. This remains good news for short sale homeowners right now.
Unfortunately, short sales take time…some less time than others and one never knows how your bank is going to
be once an offer is presented to them that is less than the dollar amount owed on the mortgage. As a North Kingstown short sale agent, I have had short sale sellers that have reached negotiated settlements and waiver of deficiency judgments in as long as 5 months. If you are in a hardship situation and are thinking about selling your home, meet with an experienced short sale realtor now. Be prepared, get the information you need to make a decision. Getting your home on the RI real estate market may need to happen sooner rather than later.
Right now the government is not talking about extending this Mortgage Debt Relief Act of 2007 program. What it means to you, the homeowner, selling your home as a short sale is that if you close after 12/31/12, you will be responsible for paying Federal income taxes on the amount the banks forgive on the mortgage at closing settlement. So not only have you had to sell your home but now you must come up with the money to pay Uncle Sam (IRS). I am not a certified public accountant and I recommend that you meet with a CPA to talk about tax consequences.
It is important to be ahead of the curve on this short sale issue coming at struggling homeowners by end of 2012. We do not know whether or not the Mortgage Debt Relief Act of 2007 will be extended. Be prepared and meet with a short sale agent that will work with you to get your home on the real estate market, get a bona fide offer on your home, negotiate the best settlement deal with the bank and get it closed BEFORE 12/31/12. Have the short sale discussion and be ready to go in the New Year.
If you are in need of short sale assistance, please reach out to me. As North Kingstown short sale agents, my team helps RI homeowners everyday through this short sale process successfully. Call me at 401.529.7849 today for a confidential discussion on your situation. Short Sale Now- Short Sale Later- Timing can be Everything.
Ginny Lacey Gorman is your go to North Kingstown Realtor® for homes in North Kingstown RI and beyond…knowing the RI geographic area, schools, happenings,important tidbits of information and businesses well. As North Kingstown short sale agents, if you are having trouble paying your mortgage contact Ginny to help you through the short sale process successfully. Waterfront, oceanfront, luxury and coastal RI real estate are her specialty but all of RI is her backyard. So feel free to search for RI Homes for Sale. When you are in need of a good professional for your buying and selling needs and an internet savvy Realtor® who sells RI houses in this real estate market - call Ginny at 401.529.7849.