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Home Selling in Antioch : Real Estate Advice

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Activity 8
Dan Tabit, Real Estate Pro in Issaquah, WA
Sat May 3, 2014
Dan Tabit answered:
Charles,
First, are they a Realtor or just an agent? Not all agents are Realtors and if they are not, the Realtor Code of Ethics wouldn't apply.
Next, regardless if they are not disclosing that they are both an agent and a principle in the transaction, this may well violate rules in your MLS.
You've discovered this, so the fact that they didn't disclose tells you something of their business practices, so be careful as always and verify everything in writing.
Finally as Phil says, if the offer is strong and can close, do what's best for your client as always. If there are violations to the rules or code of ethics, you may want to wait until the deal closes to report them, that way your clients needs are protected and you can still help improve the profession.
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Edith Karoli…, Real Estate Pro in Winnetka, IL
Sun Oct 20, 2013
Edith Karoline Jasser answered:
The net to seller, is different for each and every property, and depends on sale price, less commissions and closing costs, and pay off to the bank on loan amount still owed on the property. So there is no
fixed %...

Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE 
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties Brokerage, 30 Green Bay Road, Winnetka, Illinois 60093
EdithSellsHomes@gmail.com
Check out my website at htttp://tinyurl.com/YourRealtor4Life
HAVE THE MOST WONDERFUL DAY :)
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Chris, Both Buyer and Seller in Antioch, CA
Wed May 9, 2012
Chris answered:
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Margaret Has…, Real Estate Pro in Tampa, FL
Mon Aug 8, 2011
Margaret Hassani answered:
The good faith estimate is given by a lender to the buyer to let them know the cost of their loan. Are you trying to sell your home without a Realtor? Typically all of this is addressed in the contract between the buyer and seller. If you don't want a Realtor to advise you, you may want to seek an attorney's advice. ... more
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Jeanne Feeni…, Real Estate Pro in Basking Ridge, NJ
Thu Apr 15, 2010
Jeanne Feenick answered:
Hi Cynthia - whether you have inputted your listings directly or have them fed via your brokerages, changes tend to take time to show up. Check back tomorrow, if you still have a problem, shift over the "using Trulia" for help.

Jeanne Feenick
Unwavering Commitment to Service
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Bobbie.tony, Home Buyer in Fort Worth, TX
Tue Jul 7, 2009
Bobbie.tony answered:
Unlike a tenant/landlord scenario, if something needs repaired/replaced it will be your responsibility. Hopefully your sales contract has a Home Warranty provided for the first year by the Seller. If not that should be obtained by you through a Home Warranty company to offset catastrophic expense such as A/C, heating, plumbing, roof (possiblly) repair/replacement the first year of ownership.

Web Reference: http://fhamortgageinfo.com/
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Steven Ornel…, Real Estate Pro in Fremont, CA
Thu Mar 19, 2009
Steven Ornellas answered:
Hi Lindsey, thought I would answer your questions directly:

1) How is the tax amount computed when you short sale your primary residence?

Since we are talking about a Short Sale there obviously won't be any Capital Gains tax to worry about. You also will PROBABLY not have any tax based on the IRS' "Debt Relief" codes provided the Short Sale is completed by the end of 2012 (see answer to your last question below). Here's why:

On 12/20/07 President Bush signed into law a bill passed by Congress: HR 3648 –Mortgage Forgiveness Debt Relief Act of 2007. This eliminates the “phantom tax” on foreclosures, short sales or other discharges of debt on a primary residence through 2012. For example, a property is worth $650,000, and the mortgage balance is $700,000. Under the old rules, if a lender forgave the $50k difference as part of a foreclosure, short sale, refinance or loan modification, the borrower had to claim the $50k as income and pay federal income taxes on that amount (by the way just so the borrower didn’t forget, Banks typically would send a 1099 at tax time so they could write this off as an expense). The discharged mortgage balance must be on the taxpayer’s principal residence.

For more info see the link under question 3 below.


2) What are the pros and con's of short selling?

Short Selling is the least damaging option if one is also considering a foreclosure, so I suppose that would be the primary "pro." Furthermore, if you are considering a foreclosure as your other option there really is no "con." This is for a couple of reasons:

A) A Short Sale is a transaction where the mortgage lender agrees to accept a lower amount than is owed on the property so a sale of the property can take place. From a "getting back on your feet" perspective as a new homebuyer, a SS has a much more forgiving recovery timeline.

For example, if a "new" borrower has had a prior short sale they may be considered for a new mortgage without a specific time period having elapsed provided the following conditions of the short sale were met:
-The mortgage on which the short sale occurred was not delinquent; AND
-Cannot have any 60 day lates on their mortgage 12 months prior to the credit report date; AND
-The borrower was not obligated to repay any amount associated with the short sale, including a deficiency judgment.

If the above requirements are not met, the short sale must be treated as a pre-foreclosure (delinquent payments) sale. This means a 2-year period before one could buy a home again. A foreclosure will have a 5-year period.

B) There are also credit considerations. This is what I'm hearing from a credit-scoring specialist who has been in the biz close to two decades:

Immediate affect – With a short sale, you may be able to keep payments current (avoiding the derogatory scoring there), and you can negotiate with the lender as to how it is reported to the bureaus. For example, if the bank reports the account paid and closed, you’re better off than if it’s reported as being settled for less than owed. That may be a bit of a long shot, but the point is you have some negotiating range. Foreclosures go on to public record, where short sales do not.

Bouncing back -- Credit bureaus put short sales in a different scoring bucket than foreclosures when generating a score. The foreclosure bucket is dealt with more severely in that it takes longer to recoup the points lost by the event. Besides the scoring by the credit bureaus, lenders (read Fannie & Freddie) allow a return to the best rate pricing sooner with a short sale (2 years) than with a foreclosure (5 years)

Other Considerations -- Credit scores hit in a range of 80-200 points from best case to worst case with short sales. Figure it’s closer to 200 points with a foreclosure. This is consistent with other articles I’ve seen.
- Beware of the Promissory Note that stays on. In some circumstances, a bank will agree to a short sale if the Seller agrees to sign an unsecured promissory note for some additional amount. This obviously would allow for the lender to recoup some of its lost money after the short sale. However, if the burden of that debt leads the Borrower into bankruptcy, then the Borrower has the worst of all worlds. That is, there is a BK as well as a foreclosure on the credit report. That’s one more public record; it lasts for 10 years, hurts score additionally, and makes it harder to bounce back.


3) Are there differences between primary residence and investment properties on a short sale?

Catherine is dead-on with advising a Tax Professional regarding this question. There are subtleties with the "mortgage debt relief act of 2007" but there are also recourse/non-recourse loan considerations as far as a possible deficiency judgment against you.

For more info see: http://www.irs.gov/individuals/article/0,,id=179414,00.html

Best, Steve
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Scott Godzyk, Real Estate Pro in Manchester, NH
Sun Sep 21, 2008
Scott Godzyk answered:
You definately will want to seek teh advice of a local and trusted realtor. they can tell you what needs to be done and what wont make a difference. if you are going to make repairs you want to make sure you are getting back at least what you are putting in if not alot more, if it is what you are putting in or less, it doesnt make sense to spend the money. good luck with the divorce ... more
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