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 Bernadette & Belland Team Get Paid?
The bank pays for all costs incurred in selling the property: title fees, escrow fees and broker 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 will approve the short sale. The home owner can stay in the home throughout the short sale process.
But My House Is Going to Foreclosure, Will I have Enough Time?
As long as we have an offer in hand to negotiate with th bank(s) we are usually successful in negotiating the postponement of the foreclosure so the offer can be considered.
Can I Stay in the House?
The purpose of a short sale is to get the property sold to avoid foreclosure, and the short sale process allows the home owner to live in the property during the time it takes. If we feel the home owner is using us to stay in the property indefinitely, our listing agreement gives us the right to withdraw the property from the market, and allow the foreclosure to take place. The success of a short sale requires 100% home owner cooperation with the primary goal being to prevent the foreclosure.
Will This Have Any Impact on my Taxes?
There’s is a moratorium on the tax incurred on the forgiveness of debt until December 31, 2012. Whether this law will be extended again is unknown.