Many DC Short Sales Waiting On Congress
DC short sales have increased significantly in the last two years. If you have considered buying or selling a short sale property the time may never be better than right now. A change in the tax law at the end of the year could make short selling much less attractive to sellers and greatly reduce the market.
A “short sale” is simply selling a property for less than what is owed on the mortgage. With the boom from 2002 to 2007 prices increased throughout the country, then prices started dropping in 2008 and even though prices are improving today, many homes are still “underwater” and worth less today then what is owed on their mortgages.
To sell an “underwater” property, the bank has to agree to take less then what is owed, called a “short sale” because the mortgage is not paid in full. The banks agree to take less to avoid the expense and hassle of trying to collect or foreclose on a property that is worth less than the mortgage. With a short sale the property owner works with the bank to resolve the problem and it is beneficial to both sides.
For sellers having a hard time making payments, a short sale is a much better option than foreclosure.
* You sleep better at night knowing that you are in control of the sale and not the bank. Your home sale is handled like any other sale.
* You spare yourself the social stigma of foreclosure and is less damaging to your credit.
Moreover, you don’t have to be behind on your payments to be approved for a short sale, simply being underwater is enough.
Buyers like DC short sales because they are often priced below market price to achieve a quick sale, and some very good deals can be found; however, many buyers in the past have been frustrated by the approval process. The bureaucratic delays and indecisiveness by the banks have caused many buyers to give up before the process was complete.
Today the situation has changed. Legal questions have been worked through, there are more experience professionals to help, and the banks have more fully embraced the process and made it easier for qualifying properties.
In addition, a great victory was achieved in May when mortgage giants Fannie Mae and Freddie Mac made the commitment to expedite short sales and is now requiring its mortgage companies to fully evaluate every short offer within 30 days; however, on the negative side a key tax law is set to expire in December.
In 2007 Congress passed the “Mortgage Forgiveness Debt Relief Act” which says that money forgiven in a short sale is not taxable. If that law is not renewed the attractiveness of short sales will be greatly reduced.
If you have considered a short sale now is the time to act. I would be happy to provide more information at no cost or obligation. Please call Tony McConkey 202-255-1900, a Principal Broker with 28 years experience, to negotiate your DC Short Sales.