Short sales continue to promise amazing discounts on great homes for real estate investors. Getting underwater homeowners to bite on your offers and cut a deal hasn’t always been easy though, even if it has been their best option. However, distressed property owners now only have a few weeks left to take advantage of many of the best short sale incentives. Know what they are and use them to motivate sellers into accepting your offers.
Taxmageddon is coming
The end of 2012 heralds what the news has dubbed ‘Taxmageddon’, when billions of dollars in tax cuts come to an end. One of the most important is the tax exclusion for homeowners completing short sales under the Mortgage Forgiveness Debt Act. This currently allows sellers to avoid taxes on up to the first $2 million in mortgage debt forgiven by lenders on their principal residences. Those who wait till next year could get whacked with enormous tax bills.
Cash Back Incentives Expiring
One of the biggest benefits of opting for a short sale for homeowners has been receiving relocation funds sometimes exceeding $20,000 from their lenders to get out. Bank of America’s cash incentives expire in August 2012, giving sellers only a few more weeks to commit.
Short Sales Speeding Up
One of the biggest draw backs in the past has been the incredibly lengthy periods of time it has taken lenders and loan services to approve short sales. Sellers have been wary about tying their homes up for months without any certainty a transaction will go through. Now, streamlined processing has been designed to expedite short sales requests in just a month or two.
Foreclosures on the Fast Track
Unfortunately many underwater homeowners have been lured into a false sense of security from sensational news stories and cases where delinquent borrowers have gotten away without paying their loans for years. Lenders and banks are now putting foreclosures on the fast track, catching many by surprise and ill prepared to move.
The Current Surge in Buyer Interest May Not Last
Sellers who think they are safe waiting it out and doing a short sale later need to keep in mind that rising mortgage interest rates and homes prices could eliminate many potential buyers who are in the market now as they may not be able to qualify for home loans or could give up, believing they have missed the boat on the biggest discounts.
Now is the Time to Make Your Offers
You may not have perfected your system or have finished reading through your latest real estate education course but now is the time to be out there making winning offers and locking in the best deals on short sales. You are doing these distressed homeowners a huge favor, make sure they understand that.