Brad Garbutt

REALTOR®, Associate Broker

Since 1983, I have helped thousands of families and individuals buy and sell homes in Redding/Shasta County. The only thing that exceeds my experience is my commitment to you because whether you're buying or selling a home, your satisfaction is my number one goal. My commitment to you includes implementing the latest real estate technology and resources to effectively market and sell your property. When you're ready to buy or sell a home and you want exceptional service, call me!

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Trade Group Attorney Discusses Short Sale Issues

HOME LOANS, SHORT SALES, TIPS FOR SELLERS
May 9th, 2009

Neil Kalin, Assistant General Counsel for the California Association of Realtors (CAR), briefed Realtors in Redding last week on issues surrounding the listing and selling of distressed properties. Specific forms have been developed by CAR to address legal and financial considerations for buyers and sellers of these properties.

Sellers of properties that are “upside down”, meaning the amount of money necessary to pay in full all loans, tax liens, commissions and closing costs exceed the current market value, should consider the following:

  • Tax consequences-a short sale could result in taxable income to the seller even though the seller does not receive any cash proceeds
  • Credit consequences-even if a foreclosure does not take place, a short sale can have a negative impact on the seller’s credit rating
  • Lender considerations-Lenders have no obligation to accept a short sale. In fact, the majority of sellers attempting a short sale never make it to a successful closing
  • Tax and legal advice-real estate agents should have a general understanding of the ins and outs of short sales but sellers are advised to consult legal and tax professionals to determine how a short sale will impact their specific situation

Unlike other areas of California, local title companies in Shasta County do not allow real estate agents to order a title report until a purchaser has opened an escrow. A title report provides important information regarding liens against the property and/or seller that can determine if a short sale is feasible.

Another important consideration is the possibility a seller that agrees to a short sale could inadvertently provide their lender information that may expose loan fraud. In order to determine if a hardship exists, the lender will require the seller complete a hardship package that includes current financial information. If the lender compares that to the original loan application and finds discrepancies, the seller could open themselves to a fraud investigation.

Anyone considering a short sale should consult with a knowledgeable Realtor, attorney and tax accountant before moving ahead. Contact me if you need you any help.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

This entry was posted on Saturday, May 9th, 2009 at 4:04 pm and is filed under HOME LOANS, SHORT SALES, TIPS FOR SELLERS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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