If you have been working with a San Diego short sale realtor about short selling your home, you may already be aware that there are possible tax consequences in regards to doing a short sale. This shouldn’t scare you away and keep you from short selling your home however. Although there isn’t a simple answer to this problem, there are ways to avoid paying taxes on your short sale.
To begin with, you may be wondering what you’re even paying taxes on. That’s the simple part to explain. When you short sale your home, the difference between the selling price and the amount owed, essentially the amount that’s forgiven, is viewed as taxable income by the IRS. Once your short sale is completed, you’ll receive a 1099-C from your lender with the forgiven amount listed on it. They are also required to report this amount to the IRS.
Although the forgiven debt many be a significant amount, it shouldn’t keep you from doing a short sale on your property. If you act quickly, you may still be able to take advantage of the Mortgage Forgiveness Debt Relief Act that expires at the end of the year. This act makes qualifying homeowners exempt from paying taxes on the forgiven amount. There are certain requirements to this act and your home does have to be closed on by December 31, 2012, but if you act quickly and work with a short sale realtor that is experienced and educated, it is still possible to get your home listed, obtain an offer, and get the short sale negotiated and closed before the end of the year.
If you have any additional questions on ways to avoid paying taxes on your forgiven short sale debt, or if you would like to find out more about the Mortgage Forgiveness Debt Relief Act, contact a San Diego short sale realtor today. They can provide you with the information that you are looking for in regards to taxes and your short sale property.
Are you interested in doing a short sale but aren’t sure if you qualify for one or not? Any short sale expert in the San Diego area can help you assess your situation and determine if you qualify and if a short sale is right for you, but here are a few basic guideline to help you get started.
When short sales first came about five or six years ago, most lenders required a verifiable hardship in order for a homeowner to short sale their property. These hardships were along the lines of unemployment, divorce, income reduction, death or illness in the family, or a job relocation. While these hardships still apply and are legitimate for doing a short sale today, one of the main reasons most homeowners area choosing to short sale in 2012 is because their home is worth much less than what they owe on it. Lenders are now accepting this as a legitimate hardship because it’s become a very common issue across the entire nation. There are often times where homeowners aren’t even behind on their mortgage but are still qualifying for a short sale because they are so underwater on their home.
If any of the previously mentioned situation applies to you, chances are that you would qualify for a short sale on your property. Again, to find out more information about specific terms and conditions in regards to who your investor and lender are, contact a San Diego short sale expert for more information. There are also many different reasons not mentioned that lenders are willing to consider as a hardship, so it’s still important to talk to a short sale specialist and obtain more information if you need to get out of your home as quickly as possible. By working with the right expert, they can help you to successfully short sale your home so you can begin a new chapter in your life.
Most (hopefully all) homeowners know that losing your home to foreclosure isn’t really the best thing to happen to you, even if it’s out of your control. But why is this? What impact does a foreclosure have on a person? According to San Diego short sale specialists, there are a few reasons why homeowners should try to avoid foreclosure.
The first reason is that foreclosure stays with you. As much as you want to forget losing your home, it is still a very agonizing experience that can haunt homeowners for years.
The second reason, and perhaps one of the more significant ones, is that foreclosure can have a very negative impact on your credit score. It’s almost impossible to have this repaired on your credit score and could affect your score by by 300 points or more. Losing your home to foreclosure is the most damaging thing when talking about future credit availability.
A third reason to avoid foreclosure is because of the potential for deficiency judgments against you by your lender. These are often times associated with short sales, but what many people don’t realize is that your lender can come after you for any amount of money that they were shorted when they sold your home at auction. For example, if you owed $100,000 on your home and it only sold for $75,000 at auction, your lender could sue you for $25,000.
There are obviously many reasons that homeowners want to avoid foreclosure, however these are just a few of the most important ones. If you have any further questions on this, we highly encourage you to contact a San Diego shot sale specialist. If you are facing foreclosure, or are already in the middle of the foreclosure process and would like to know what your alternatives are, there is help out there for you. If you are already working with a real estate agent on the sale of your home, make sure they are, in fact, a short sale specialist. This can make all the difference in the world in getting your short sale approved and avoiding foreclosure.
If you are currently in the middle of the foreclosure process and have a pending auction date, you may be wishing that you had done something about your difficult financial situation a little bit sooner. Maybe you think it’s too late and that you’ve run out of time to utilize any of your foreclosure alternatives. This is where you’re wrong! Even if you have a foreclosure sale date coming up in the near future, it’s never too late to reach out to a San Diego short sale expert and see what options are still available to you. In some short sale expert’s opinions, almost anything is better than foreclosure, so what have you got to lose?
If you only have a few days left until your auction date, the only real alternative available to stop the foreclosure process is filing for bankruptcy. Many people aren’t crazy about this idea, which is quite understandable. If you do have a few weeks or months left, however, there is still time to get a short sale completed on your home. If you contact a San Diego short sale expert to get the process started, you could possibly get your foreclosure sale date postponed or stopped altogether. If you qualify for a government program, such as HAMP or HAFA that’s a very good chance that you could avoid foreclosure once your file is reviewed.
One important thing to remember is that it’s never too late and it’s always okay to get help from a short sale expert. It can be hard to accept the fact that your financial situation isn’t the best at this point in time, but allowing your home to got to foreclosure isn’t going to make the situation that much better. If you choose to work with an experienced San Diego short sale expert, they can help you negotiate away your debt and help you begin a new, better financial chapter in your life.
Sometimes homeowners in the San Diego area worry about how much a missed mortgage payment (or payments) will affect their credit score and their ability to do a successful short sale on their home. In talking with local short sale realtors, they would like to reassure distressed homeowners that worrying about how much a missed mortgage payment will affect your credit score is really the last thing they should be worrying about. It’s important to keep in mind that there are many San Diego homeowners out there that are in the same situation; you can always rebuild your credit, especially if you choose to work with an experienced San Diego short sale realtor.
Yes, the more mortgage payments you miss the more your credit score will more than likely be affected, however, your credit score does not determine your worth and value as a person. Sometimes missing a mortgage payment is the best financial decision one can make. To put a positive spin on things, it is possible that the further behind you are on your mortgage, the faster you lender will process your short sale transaction because they know you are really struggling financially. The faster your short sale is completed, the sooner you can be on the road to financial freedom and starting over a new chapter in your life.
If you are at all concerned about missing mortgage payments, how it’s going to affect your credit score, or how you can rebuild your credit after a foreclosure or short sale, contact a San Diego short sale realtor today. When working with a short sale realtor, their services don’t just end once your short sale is completed. They are also there to help you find a new home and to provide you with ways to rebuild your credit faster. Get in touch with a San Diego short sale realtor today for more information.