Short Sales should be on the rise this Fall (on both the Buy and Sell side) due to the Debt Relief Act expiration. (As a reminder a Short Sale occurs when a home is sold but the sales price doesn’t cover the amount owed on the existing mortgage.)
The Debt Relief Act generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a short sale or foreclosure, qualifies for the relief.
The expiration of this program could have sizable tax consequences for those who Short Sale their home after the end of the year. Contact me if:
- You want to buy a Short Sale property, or
- You are thinking of selling but are afraid you are underwater on your home and don’t know if you qualify for a Short Sale..
I’ll have more information in the next post on some positive changes to the Short Sale process by lenders and services. Stay tuned!