A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds.
A Short Sale is an alternative to foreclosure and may be an option if:
- You are ineligible to refinance or modify your mortgage
- You are facing a long-term hardship
- You are behind on your mortgage payments
- You owe more on your home than it’s worth
- You have not been able to sell your home at a price that covers what you still owe on your mortgage
- You can no longer afford your home and are ready or need to leave
‘Fiscal cliff’ vote included extension of Mortgage Forgiveness Debt Relief Act
The last-hour vote in Congress to avoid the “fiscal cliff” included a provision that extends the Mortgage Forgiveness Debt Relief Act through 2013, which is important to sustaining the nascent housing recovery in Las Vegas, local real estate professionals said Thursday.
The debt relief act, which was scheduled to expire at the end of 2012, waives forgiveness of mortgage debt from being counted as taxable income by the Internal Revenue Service.
That applies mainly to short sales of homes, or lender-approved sales for less than the principal mortgage balance. A homeowner who owes $150,000 on the mortgage and short sells for $100,000 would have been taxed on the $50,000 difference as income, placing them in a higher tax bracket.
Struggling homeowners who are considering a short sale or loan modification will be eligible for tax relief through Dec. 31 under the act passed in 2007 and originally scheduled to expire in 2009.
Short sales account for about 45 percent of all home sales in Las Vegas, the latest statistics from the Greater Las Vegas Association of Realtors show.
“I deal with a lot of short-sellers, and sellers were extremely worried about it here,” Wardley Real Estate agent Don Marti said. “I have people in short sales say, ‘If they don’t extend this (act), I’ll just let it go to foreclosure.’”
For some sellers, taxes incurred by the debt forgiveness could add up to tens of thousands of dollars, he said.
Channelle Beller of National Title Co. said short sales are a “huge part” of the Las Vegas market, where an estimated 60 percent of homeowners with a mortgage are under water, owing more than their home is worth.
“If we’re not more affected by this than anybody, we’re right up there,” she said. “It’s going to expire eventually, if not at the end of this year, and there are still people who need to short sell.”
National Title is presenting a free informational event at 10 a.m. Tuesday at 2425 E. Oquendo Road, with a certified public accountant to explain details of the mortgage debt relief act. Homes must be a primary residence to qualify, though rental homes sold at a loss can be deducted as business assets.
“Consumers have heard they’d be taxed as income,” Beller said. “There’s ways to write off that $100,000.”
The maximum amount that can be treated as qualified principal mortgage debt under the act is $2 million, or $1 million if married filing separately. Second mortgages are eligible if they were used for home improvements.
Short-sale agreements often include a plan to settle the remaining mortgage debt, Las Vegas real estate attorney Jamie Cogburn said. Otherwise, lenders can pursue the remaining balance under the loan agreement for up to six years.
Other real estate-related provisions in the bill:
■ Deduction for mortgage insurance premiums for filers making less than $110,000 is extended through 2013 and made retroactive to cover 2012. The tax break covers private mortgage insurance as well as mortgage insurance provided by the Federal Housing Administration, the Veterans Affairs and the Rural Housing Service.
■ Fifteen-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
■ The 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.
LAS VEGAS REVIEW-JOURNAL
I’m looking for people to join my team for the Susan G Komen Walk at Coconut Point in March. You can walk or run & for those of you that competitively run we signed up to have your times tracked(only if you choose).
Please help out a great cause and join our team!!
You can go to the following website and and on the right side of the page click on Join the Team!
Oh Yeah and if you can’t make it please donate, you can go to the same link and click on Donate to this Team!!
WHEN Mon., Dec 31, 2012, 10 – 11:30am
WHERE Adventures In Paradise
14341 Port Comfort Rd
Fort Myers, FL 33908
VENUE “G” dock at Port Sanibel Marina
AGE RANGE All Ages
COST $29 per adult/$19 per child (3 & under free)
TICKET WEB LINK www.adventureinparadiseinc.com…
TICKET PHONE 239-472-8443
What a great way to start your day!
Relaxing and comfortable cruise on the “Sun Princess”!
Enjoy Morning Cruising to see:
•Dolphins, Wildlife And The Sights
•See & Learn About Mangrove Islands & Estuaries Where Calusa Indians Once Lived
•Narrated By Knowledgeable Captain And First Mate
“Fiddler on the Roof”: 11:45 a.m., lunch and 1:15 p.m. show; 5:30 dinner and 7 or 7:30 p.m. show, Dec. 2-Feb. 16, Broadway Palm Dinner Theatre, 1380 Colonial Blvd., Fort Myers. $49 and $47, matinee; $53 and $55, evenings; $21, children 12 and younger; $35, show only, adults; $17, children. 239-278-4422
- Place: Broadway Palm Dinner Theatre
- Sundays at 5:30 p.m.
- Mondays at 5:30 p.m.
- Tuesdays at 5:30 p.m.
- Wednesdays at 5:30 p.m.
- Thursdays at 5:30 p.m.
- Fridays at 5:30 p.m.
- Saturdays at 5:30 p.m.
- Cost: $17 – $55
- Age Limit: All ages
- Categories: Theater
Short Sales Make Up Bigger Share of Market
More lenders and home owners are viewing short sales as a better alternative than foreclosure. Reversing a trend in the third quarter, pre-foreclosure sales are now outnumbering sales of bank-owned properties.
Pre-foreclosure sales accounted for about 22 percent of all residential sales in the third quarter, according to the latest data from RealtyTrac. Distressed sales, in general, accounted for about 41 percent of the market share in the third quarter — still a significant make up of the real estate market.
“The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk home owners are realizing that short sales are often a better alternative than foreclosure,” says Daren Blomquist, vice president of RealtyTrac.
Short sales increased 15 percent in the third quarter over the previous quarter, according to RealtyTrac.
Pre-foreclosure properties sold for, on average, $191,025 in the third quarter — a 3 percent drop from the second quarter.
The discounts are still big for potential buyers: In the third quarter, the average sales price of a pre-foreclosure property was 27 percent below the average sales price of a non-foreclosure residential property, RealtyTrac reports.
Source: “Foreclosure Sales Increase 21 Percent in Third Quarter,” RISMedia (Dec. 6, 2012)
Just Listed-Foreclosure in Naples, FL at Key Royal in North Naples only $77,250 for 3bed, 2 bath Call Emily Antonas 239-465-9596 to set up showing See details at http://www.naplesnative.idxco.com/idx/9289/details.php?idxID=188&listingID=212038013
Great Outdoor Day
Lovers Key, 8700 Estero Blvd., Fort Myers Beach
Saturday, December 8 • Activities throughout the day!
At the Great Outdoor Adventure Day, experience all the recreational opportunities Lovers Key has to offer! The day will be filled with guided adventures (bulk of which are FREE) that range from kayak tours, bike tours (bike and helmets provided at NO CHARGE), geo-caching, fishing, and guided nature walks to name just a few. In addition there will be children’s activities, music and food. Local kayak and paddleboard vendors will be having on-water demos as well as a variety of gear available for purchase. Touch some live animals, discover native species, and explore what local non-profit organizations and outdoor recreational groups have to offer!