Short Sale versus Foreclosure
A “short sale”
refers to a situation where the property owner does not have enough
equity in the property and not enough cash or liquid assets to be able
to sell the property, pay off liens and selling expenses (e.g., closing
costs, property taxes, transfer taxes, real estate commissions) and
provide a clear title to the purchaser. In other words, there is more
owed on the home than what it will likely sell for on the market. A
short sale can also occur to a seller who bought high and took out a
lot of equity and might be forced to sell due to a divorce or job
transfer.
If a homeowner facing foreclosure cannot negotiate with
the lender to work out a repayment plan or loan modification, a short
sale can be a viable option. Many consider a short sale better in the
long run for the homeowner because it avoids foreclosure which will
damage a person’s credit score and make it much harder to buy another
home in the future.
According to Beth Llewellyn, CEO of the
Partnership for Homeownership, a foreclosure will stay on the credit
report for at least 10 years as it is a court action similar to
bankruptcy. However, foreclosure can do even more damage to a credit
report than bankruptcy. Ultimately you must prove to the lender that
the foreclosure happened due to something beyond your control such as
job loss or illness.
“It’s ideal if the homeowner who chooses to
sell can work with a professional REALTOR® before they are delinquent
three months,” says Llewellyn. “Within this short window of time, a
REALTOR might assist in negotiations with the lender to place the
property on the market and possibly save the buyer any equity left, as
well as prevent a foreclosure on their credit file.”
- Beware of scams!!!
Consumer groups have learned that advertisements that say “Cash for
Houses/Any Situation” or “We Buy Houses for Cash” bait homeowners with
the promise of rescuing them from imminent foreclosure. Unfortunately,
the “rescue” often involves the borrower signing over title of the
house to a different person or entity, thus, and the family ends up
being evicted from their home.
- It is important that sellers
work with a licensed Illinois Realtor to sell their home. REALTORS are
in the business of helping homeowners and have the expertise to guide
them through a tough situation. A REALTOR has the expertise to develop
a reliable Comparable Market Analysis (CMA) to determine the current
fair market value of the home.
- Understand the tax
implications of the decision to sell short and consult with a tax
advisor. See Realtors Applaud Elimination of "Phantom Tax" further in
this article.
There will be paperwork and research
required of you in this process. First you have to locate your mortgage
documents to understand the terms of your loan. If you have authorized
an attorney or REALTOR to act on you behalf in the sale of your home,
the lender will need a letter of authorization. Other documentation
required by the lender includes:
- Financial Disclosure Form
- One-page “hardship letter” explaining how you got in this position
- Last two months pay stubs
- Copies of most recent two months personal checking account statements for each borrower on the loan
- Copy of signed last two years’ personal tax returns
Yes,
the short sale will require time and consultation with the appropriate
legal, tax and real estate professionals. It can take from two weeks to
as long as 60 days to receive an approval of a short sale from a
lender. But usually it’s a much better option than foreclosure given
the impact to your credit history.
The National Association of REALTORS has been working for the past nine years to repeal the “phantom tax”
law that forces individuals to pay income tax when a portion of their
mortgage loan is forgiven after a short sale or as part of a
foreclosure. The REALTOR-supported measure, the Mortgage Forgiveness
Debt Relief Act of 2007 was signed into law by President Bush on
December 20 and will ensure that any debt forgiven on disposition of a
principal residence will not be taxed.
Sources:
Partnership for HomeOwnership, Illinois Association of REALTORS®,
National Association of REALTORS®, REALTOR® Will Weaver of the Floyd
Wickman Team
In the market for a townhome in Bolingbrook?
Stop by at 580 Eric Way in Bolingbrook - great end unit, spacious and has lots to offer:
- 3 generous size bedrooms
- finished basement
- 2.5 bathrooms
- private fenced in yard with a patio
- pool and club house community
Seller has just put some nice upgrades in this unit: brand new energy efficient windows and contemporary kitchen counter tops.
This townhome is all about space and has a single family feel to it. Dining area and one
of bedrooms have bay windows. Plenty of space and storage.
Winston Village is one of a very
few communities where you actually own a back yard with your townhome.
This unit has a nice private fenced yard!
This community
offers a maintenance free living. $108 Monthly assessment fee includes
all of the exterior maintenance, lawn care, snow removal as well as
access to the clubhouse and pool.
View photos of 580 Eric Way, Bolingbrook
Motivated Seller drops the price again to move this nice home in Crest Hill!
Need a low maintenance property - stop by at 21541 Vesper, Crest Hill in popular Renwick Club. Single family home with low assessment of $75 that takes care of your lawn and show removal. Maintenance free life style is what this subdivision offers to its residents. This home has large bedrooms, full basement studded for finishing, 2 car garage, great space, functional layout and great location with fast access to I-55, RT 30 and Webber. Stop by to view!
View Photos of This Home NOW
Are you tired of looking and bidding on short sales? Are you tired of waiting or can't wait nay longer? Stop by and see this seller owned home offering 3 large bedrooms, oversized eat in kitchen, 2.5 car garage, 1.1 bath, lots of storage and a full basement studded for finishing! Great location in Renwick Club of Crest Hill!
No need to wait! Seller is flexible on closing date and will bargain! Great house for the money! Excellent Crest Hill location close to Route 30 and I-55. Don't wait!
Click Here to View House Photos - 21541 Vesper St., Crest Hill
Seller owned end unit in EXCELLENT condition in Winston Village in Bolingbrook! Pool and clubhouse community! No need to wait for closing! 8k Tax Credit eligible! This spacious end unit townhome offers 3 bedrooms, 2.5 baths, finished basement & 1 car garage. All baths have been remodeled. Spacious & bright kitchen with new stove, microwave, & counter tops. Brand new energy efficient windows throughout the unit. Dining area & one of bedrooms have bay windows. Fenced yard! Great access to I-55 & I-35. Seller is motivated and is willing to offer buyer a valuable incentive of closing cost credit. FHA buyers are welcome in this FHA approved community!
Click here to view the photos of this unit.
In the market for a townhome? Need good location and space?
Stop by at 580 Eric Way, Bolingbrook. This End Unit townhome is a great find - 3 bedrooms, 2.5 baths, full finished basement, garage - excellent location to I-55 and I-355. Don't wait - stop by and take a look!
Check out this fantastic value townhome in popular Winston Village community that offers maintenance free lifestyle and clubhouse with a pool.
Seller is offering a choice of INCENTIVES - pick what works best for You:
- need a lower rate - seller is willing to buy the buyer's rate down
- need closing costs -seller is open to the closing cost assistance
- need lower payment - seller will consider paying for 1 year of home owner assessments
$8,000 Tax Credit is only available till November 30th of this year!
Don't wait, stop by to look at this great unit at Winston Village in Bolingbrook! Seller is motivated and is willing to help the buyer to make a
smooth transition into their new home by offering a choice of incentives.
VIEW PHOTOS OF THE UNIT
Today, buyers certainly have choices when shopping for a property. If you are a first time home buyer or haven't owned a property in 3 years, and are planning ontaking advantage of the $8,000 tax credit - make sure to plan your purchase accordingly so that you close your transaction no later than November 30th to qualify!
When bidding on a short sale, keep in mind that it is typically 60-90 days just to hear an answer from a bank plus 30-40 days to close. When bidding on a foreclosure, it may take up to 30-45 days to get a response plus another 30-45 days to close.
Evaluate the timeframe of your purchase and remember these points:
- To qualify for the $8,000 tax credit - you must close by November 30th, 2009
- What is my lease expiration date (if renting)?
- What notice do I need to give my landlord (30-45-60 days) to get my security deposit back?
Take a look at seller owned listing, most sellers are highly motivated to sell for different reasons.
Two advantages of purchasing from a seller are:
- Bargaining may only take a couple of days at most.
- You can usually close a transaction in 30 days!
Check out our seller owned townhouse listing at 1847 Mappold in desired Larkins Pointe in Joliet!
- The motivated seller is willing to buy down the buyer's interest rate to 4.00% for the first year (Versus current market rate of 5.5%), a very rare give away! This can make a huge difference on a monthly payment!
- Seller can close in 30 days or even less.
Click on this link to view the photos of the townhome at 1847 Mappold, Joliet
Shop SMART! Plan your purchase to take advantage of the $8,000 tax credit!
Read more on the $8,000 CREDIT here.
In the market for a townhome that has to have a great access to a highway?
Stop by to see this great unit at Winston Village in Bolingbrook! Just minutes away from I-355 and I-55!
Click on this link to view the photos of this great unit!
This
spacious end unit townhome features 3 nice size bedrooms, 2.5 baths,
finished basement & 1 car garage. All baths have been remodeled.
Spacious and bright kitchen with new stove, microwave, and counter
tops.
Seller have installed all brand new energy efficient
windows throughout the unit. Dining area and one of bedrooms have bay
windows.
Winston Village is one of a very few communities where
you actually own a back yard with your townhome. This unit has a nice
private fenced yard!
This community offers a maintenance free
living. $108 Monthly assessment fee includes all of the exterior
maintenance, lawn care, snow removal as well as access to the clubhouse
and pool.
Seller is motivated and will consider paying 1 year of assessments!
Please stop by to see this unit - best one in the subdivision!!!
Sellers will buy down the rate to 4% for the first year for the buyer who purchases this nice unit! Sellers are motivated and willing to help the buyer to lower their monthly payment for the whole year! Truly a deal when the rates are rising! Call today for details!
Click on the link below to view the photos of this nice END UNIT in Larkins Pointe Subdivision of Joliet. Located on Ingalls just of off Larkin Ave, it has excellent access to I-80, Route 30 and I-55.
http://www.irinaallison.com/Joliet/Illinois/Homes/Larkins_Pointe/Agent/Listing_2347523.html
FHA buyers are welcome in this
FHA Approved townhome community! Take advantage of the $8,000 Tax
Credit and get reimbursed for your downpayment - please call for
details!
2 Story END UNIT TOWNHOWSE with STYLE in desired
Larkins Pointe! Unit backs into rentention area which gives plenty of
privacy - no neighbors in the back yard.
Monthly assessment
includes: water bill, garbage removal, exterior maintenance, lawn care,
snow removal, common area maintenance and insurance.
News include: high end hardwood look pergo on the 1st floor, upgraded light fixtures and ceilings fans.
Unit features 3 nice size bedrooms, 2.5 baths, kitchen, formal dining room and a large living room.
Master
suite offers a large bedroom, walk in and 2 reach in closets and a
master bath. Convenient second floor laundry / utility room!
Furnace
and AC have warranties through 2012 transferable to the new owners! All
appliances stay. Unit is in great condition! Nothing to do but move in!
Don't miss a chance seeing our featured listing of the week - Hot Joliet Townhome in Larkins Pointe Subdivision of Joliet. Minutes from I-80, I-55 and Rt 30. Fantastic location - next to schools, grocery stores and Joliet Mall. Low Taxes, Maintenance Free Living! Private End Unit! Price has been reduced for a qucik sale!
View photos of this townhome on line by clicking on the link below:
http://www.irinaallison.com/Joliet/Illinois/Homes/Larkins_Pointe/Agent/Listing_2347523.html
Attachment(s): Private Patio.jpg
What Is The 2009 Homebuyer Tax Credit?
- Allows first-time homebuyers purchasing a new or pre-existing home to be eligible for a tax credit up to $8,000
- The property type must be a single-family home, townhome or condominium and used as their primary residence. (Mortgage Revenue Bonds are eligible)
- Any home that is purchased for $80,000 or more qualifies for the full $8,000 amount. If the home costs less than $80,000, the credit will be 10% of the cost
- If a home was purchased for $75,000, the credit would be $7,500
- The credit is capped based on income limits
- First-time homebuyers who purchase a principal residence on or after January 1, 2009 and before December 1, 2009 are eligible. The law:
- Defines a first-time homebuyer as a buyer who has not owned a principal residence during the three-year period prior to the purchase, and
- Tests the homeownership history of both the homebuyer and their spouse
- There is no repayment requirement for the 2009 tax credit unless the borrower sells the property within 3 years of closing or no longer occupies the property as their primary residence
- Note: Any qualifying purchase made between April 9, 2008 and December 31, 2008 was eligible for a $7,500 tax credit and is still subject to the repayment feature over 15 years – beginning with their 2010 tax return
Income Limits:
■ Single or head-of-household filers can claim the full credit if their modified adjusted gross income (MAGI) is less than $75,000
■ For married couples filing a joint return, the MAGI limit doubles to $150,000
■ The credit is equal to $8,000 for a qualified home purchase by a married couple filing jointly
■ A homebuyer that is married but filing separately qualifies for a $4,000 credit
■ The credit amount is also pro-rated based on income
Note: The tax credit is available up to $8,000
■ The credit phases-out between $75,000 - $95,000 for single or head-of-household borrowers and $150,000 - $170,000 for married filing jointly
■ The closer the borrower comes to the maximum phase-out amount, the smaller the credit will be
Example
- Couples income is $165,000
- Income limit is $150,000
- Excess income $15,000
- The excess amount is used to create a fraction $15,000/$20,000
- The disallowed portion of the credit is 75% of $8,000 or $6,000
- The couple would receive a credit of $2,000 ($8,000 - $6,000)
- The credit will reduce the amount of taxes owed
- The tax credit may be subtracted from the federal income tax liability to:
– Increase the size of the refund
– Reduce the amount owed
Full Tax Credit Example:
- Borrower owes $6,000 in taxes
- Tax credit lowers liability by $8,000
- IRS refunds borrower $2,000
- The tax credit is refundable which means the homebuyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset
Full Tax Credit Example
§ Borrower owes $7,200 in taxes
§ Tax withholding of $5,000
§ Without the credit, the borrower would owe $2,200 to the IRS
§ Borrower qualifies for tax credit of $8,000
§ Borrower receives check for $5,800 ($8,000 - $2,200)
Other Eligibility Conditions:
■ Purchases by non-resident aliens or purchase financed by proceeds from a qualified mortgage issue are not eligible
■ The credit will not result in an individual owing additional federal taxes under the Alternative Minimum Tax
■ Home purchases between relatives and other gifts of residences are not eligible for the credit
■ Loans made under federal mortgage issues (bond loans) are eligible for the tax credit
■ Other tax benefits of homeownership are still eligible
– Mortgage-interest deductions
– Capital gains tax exclusions
– Property tax deductions
Delinquent on Mortgage Payments, Foreclosure Pending, Job Loss, Divorce, Job Transfer, Distressed Property, Owe More Than Property is Currently Worth -IS SHORT SALE AN EXIT FROM THE SITUATION?
What is a short sale?
A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, such as property taxes, transfer taxes, real estate commission.
Causes : Flat or falling home prices, home-equity credit lines, 100-percent financing that drained out equity, and spiking interest rates on adjustable mortgages.
Steps:
1.Call us - APEX Real Estate Brokerage professionals are skilled at negotiating Short Sales. We have a team of professionals skilled at handling short sale situations.
2. We are experts at positioning your property on the market to make sure it gets the best exposure.
3. We will lead you through the process every step of the way!
4. We will help you find you next home!
- Beware of scams!!! Consumer groups have learned that advertisements that say “Cash for Houses/Any Situation” or “We Buy Houses for Cash” bait homeowners with the promise of rescuing them from imminent foreclosure. Unfortunately, the “rescue” often involves the borrower signing over title of the house to a different person or entity, thus, and the family ends up being evicted from their home.
- It is important that sellers work with a licensed Illinois Realtor to sell their home. REALTORS are in the business of helping homeowners and have the expertise to guide them through a tough situation. A REALTOR has the expertise to develop a reliable Comparable Market Analysis (CMA) to determine the current fair market value of the home.
- Understand the tax implications of the decision to sell short and consult with a tax advisor. See Realtors Applaud Elimination of "Phantom Tax" further in this article.
There will be paperwork and research required of you in this process. CALL us at APEX Real Estate Brokerage - we will walk you trhough the process!
APEX Real Estate Brokerage is an agency experienced in negotiating Foreclosure and Shortsale transactions. We believe that every transaction is unique and requires an individual approach. APEX Real Estate Brokerage is dedicated in negotiating the BEST DEAL for EACH and EVERY CLIENT by doing a thorough marketing analysis research, evaluation of the future property potential and consistent follow up with all parties involved in a real estate transaction.
Filed under: Real Estate, Market Conditions, For Sale, Open Houses, Announcements, Events, Technology, Industry, Product Reviews, Finances, Buyer Information, Seller Information, Community Information
FHA buyers are welcome in this FHA Approved townhome community! 3.5% down buys this unit. Take advantage of the $8,000 Tax Credit and get reimbursed for your downpayment - call for details!
2 Story END UNIT TOWNHOWSE with STYLE in desired Larkins Pointe! Unit backs into rentention area which gives plenty of privacy - no neighbors in the back yard.
Monthly assessment includes: water bill, garbage removal, exterior maintenance, lawn care, snow removal, common area maintenance and insurance.
News include: high end hardwood look pergo on the 1st floor, upgraded light fixtures and ceilings fans.
Unit features 3 nice size bedrooms, 2.5 baths, kitchen, formal dining room and a large living room.
Master suite offers a large bedroom, walk in and 2 reach in closets and a master bath. Convenient second floor laundry / utility room!
Furnace and AC have warranties through 2012 transferable to the new owners! All appliances stay. Unit is in great condition! Nothing to do but move in!
If you are in the market for a townhome - You must check out this cozy but spacious townhome in Larkins Pointe in Joliet! 1672 SF of space, generous size bedrooms, 2 full baths and a powder room on the main level for your and your guests convenience. Great floor plan if you like to entertain, and it's truly a maintenace free living - the monthly assessment covers all of your exterior maintenance, lawn care and snow removal, water bill and scavenger (garbage removal).
Sellers have just put in a high end hardwood look pergo all throughout the main floor, brand new light fixtures and ceiling fans. Unit is very private and has a nice patio in the back, unit backs into a retention area - no neighbors in the back!
Click on the link below to view the photos of this great unit:
http://www.irinaallison.com/Joliet/Illinois/Homes/Larkins_Pointe/Agent/Listing_2347523.html
Master suite offers a large bedroom, walk in and 2 reach in closets and a master bath. Convenient second floor laundry / utility room!
Furnace and AC have warranties through 2012 transferable to the new owners! All appliances stay. Unit is in great condition! Nothing to do but move in!
MOTIVATED SELLER WILL LOOK AT ALL OFFERS! Price reduced to $189,900 on this spacious 2 story 3 bedrooms 1.5 bath, 2 car garage, full basement house! MUST SELL!
Click on the link to view the photos of the property:
http://www.irinaallison.com/Crest_Hill/Illinois/Homes/Crest_Hill/Renwick_Club/Agent/Listing_727849.html
The house has a nice open floor plan! Big kitchen has spacious dining area, pantry closet and plenty of oak cabinets. Large master bedroom measuring 14x13 offers a huge walk in closet. Second bedroom measuring 19x12 offers lots of space and 2 reach in closets. 3rd Bedrooms is 10x10. The layout offers a full bath on the 2nd floor close to all 3 bedrooms and a half bath off the kitchen for your and your guests' convenience . Another great feature is a 2nd floor laundry room. Full basement. Water softner and all appliances are included. Snow removal and lawn care are included in the monthly assessments of $75. Will give carpet allowance! Great location - close to I-55, RT 30 and RT 53. Great schools!