aabsolute, you ask enough questions about short sales that you would probably benefit from taking a few classes on short sales.
Short Sale Pricing Discussion
- Thread starter Smiling JOe
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I recently closed on a short sale on 30-a. The bank took a 840k lose. The short sale was already preapproved by the bank but during the time the bank looks at your offer they can entertain all other offers which sucks. For instance if the short sale approved amount is 800k then in the time the bank is looking at your offer then can entertain multiple bids which is what happened to me. You have no idea what anyone else is bidding. Once the bank approves your offer you get a letter saying its approved. A short sale is usally "as is" and the commissions are less as bobby said. But what i had a very hard time finding out is what are the benefits of a short sale for the seller?I never saw the seller but the attorney told me the lose would be 1099'd to the seller. If so whats the point of the seller doing all the work to try to sell it?Your credit is still destroyed. As far as i know the only way a seller can start a short sale is to stop paying there payments and force the banks hand.Does a foreclosure hand the owner a 1099 if its a second home?
When all this started well over a year ago, general consensus was that a short sale dropped your FICO score 100 points; a foreclosure dropped it 200 points. Now I understand that both affect your credit the same way - the worse of the two, I'd guess. Didn't Congress pass something last year eliminating the 1099 on primary residence short sales? I'd think all bets are off for investment/second homes. Correct?
the new rules are that the short sales with offers on the table have to be pended or contingent. So... Many agents or buyers do not look at inventory in this category. We look at actives when going to show property. Odds of getting a short sale and being the only bidder just increased radically. Not to mention a lot of inventory leaving the market in Feb. if agents abide by the new rules. I actually think at this time this is good for the market.
ray,
Your Realtor can always ask the listing agent if the property is under contract, and as Bobby J states, the listing is required to go into contingent or pending once it is under contract.
What's the point of a short sale? Perhaps less hit on your credit report than a foreclosure. Just because the seller is 1099'd for the "gifted amount," doesn't mean that the seller will have to pay taxes on it. An accountant can better guide you, but the IRS tax rules are pretty easy to understand regarding that particular subject. The seller may or may not have to pay taxes on that deficiency, based upon assets and debt.
Your Realtor can always ask the listing agent if the property is under contract, and as Bobby J states, the listing is required to go into contingent or pending once it is under contract.
What's the point of a short sale? Perhaps less hit on your credit report than a foreclosure. Just because the seller is 1099'd for the "gifted amount," doesn't mean that the seller will have to pay taxes on it. An accountant can better guide you, but the IRS tax rules are pretty easy to understand regarding that particular subject. The seller may or may not have to pay taxes on that deficiency, based upon assets and debt.
I wish I had time to take off work. Do you know if they have online guides that are clear, up to date and thorough? Things change fast.
There is plenty of good information regarding short sales available online. A simple search for short sales should get you endless amounts of information to read at your leisure.
ECAR still needs to do a little more work on shorties. The public is entitled to full disclosure in the listing remarks on sales type. Currently only agents can see the sales type or shortie disclosure in the agent notes.
And as far as a better opportunity to get a solo bid in on a shortie, it was there the whole time until ECAR changed the rule in late Dec. There was only a 5 week period where a listing agent could leave a listing active after they received an offer. Savvy agents would have written into the contract that seller must change the listing status to "contingent" from "active" even while the rule was in effect.
And as far as a better opportunity to get a solo bid in on a shortie, it was there the whole time until ECAR changed the rule in late Dec. There was only a 5 week period where a listing agent could leave a listing active after they received an offer. Savvy agents would have written into the contract that seller must change the listing status to "contingent" from "active" even while the rule was in effect.
Can I continue to make questions and comments about short sale procedures in this Thread?