This is a good thing. Nobody wants to have to go through this, but if the homeowner is not going to be able to make it, this is a great choice.
When you sell your home as a short sale it seems your credit will be damaged approximately 60-200 points, especially if you were delinquent on your mortgage prior to the closing of the sale. While this may not seem very attractive, it is far better than letting the property go into foreclosure which may damage your credit anywhere from 200-300+ points for up to 7 years. Unlike a foreclosure, the short sale will not remain on your report even close to 7 years and if you work on rebuilding your credit after the sale goes through, it could be as if the short sale never even took place.
If you know anybody heading to foreclosure, cut them off at the pass – have them call a Realtor immediately or just have them call me, I can refer them to a short sale expert in their area.
On another subject, many people who don’t qualify are trying to get the $8,000 federal tax credit
Some homebuyers are trying to claim the $8,000 tax credit even though they missed the deadline. To claim the credit, buyers had to sign contracts by April 30 and close the sales by June 30. But…. real estate agents say some buyers were demanding quick closing dates to meet the June 30 deadline, even though they failed to meet the April 30 deadline. And because the IRS doesn’t require paperwork specifically proving the contract date, they might get away with it. Claiming the credit does require more than sending in your taxes and asking for the money. Buyers have to fill out a special form and attach a copy of their settlement statement, which they receive at closing.
The settlement statement does not require the contract date — just the “date of purchase,” which is the closing date. I’m sure the IRS will have more to say on this soon.
If the credit applies to you, you can get most of your questions answered here.
Until Tomorrow
Alan
