Frequently Asked Question
Frequently Asked Questions
Should I pay past due property taxes?
Past due property taxes are settled by the lender at the time of the short sale closing.Generally in a short sale transaction the lender will ask to see estimated closing costs on a HUD-1 which includes the taxes, any real estate commissions, homeowner dues, title insurance costs, and other related closing costs. The lender approval of the HUD-1 is required before the transaction closes. So for the most part, the lender will pay the outstanding taxes out of the agreed upon purchase price and write off the difference between what is owed on the mortgage and the agreed sale price less closing costs.
What is a Short Sale?
A short sale, negotiated settlement, or short pay occurs when a lender agrees to accept less than the amount owed to pay off a home loan as an alternative to foreclosure. The lender usually agrees to a short sale because they know if they take the property back through foreclosure they are going to take a much larger loss.
How does the Lawrence Bellands team get paid?
The bank pays for all real estate agent commissions.
How long will it take?
The short sale negotiation process is a lengthy one. It may take several weeks to many months before a lender and home owner can agree on acceptable terms you can stay in the home during this time.
But My House Is Going to Foreclosure, Will I have Enough Time?
We have successfully convinced lenders to postpone a foreclosure while we negotiate a short sale. While there are no guarantees, we will do everything that we can to get your home sold before the lender follows through with their foreclosure and we are successful over 90% of the time.
Can I Stay in the House?
The purpose of a short sale is to get the property sold. It is a lengthy process that allows you to stay in the home until the sale is complete.
Will This Have Any Impact on my Taxes?
On December 20th, 2007, President Bush passed “The Mortgage Forgiveness Debt Relief Act of 2007” which allows California Homeowners a (3) year window to avoid paying taxes on the loss the lender takes. Before this act took effect, “If the value of your house declined, and your bank or lender forgave a portion of your mortgage, the tax code treated the amount forgiven as income that can be taxed.” According to "The Mortgage Forgiveness Debt Relief Act of 2007" if you sell your home as a short sale by December 20th, 2010, the loss the lender takes will not be considered taxable income by the IRS. Please check with your accountant and let them know about "The Mortgage Forgiveness Debt Relief Act of 2007."
