December 31, 2012 – that is the day the Debt Forgiveness Act is set to expire unless Congress blesses the extension. Today, they are in their Lame Duck session. Apparently there are other items they are working on – but I do know our “distressed property owners” are watching and hoping and in some cases, Praying.
Yesterday during our radio show the question came up about if the debt forgiveness act expires, would there be any reason to have a short sale performed on a Santa Clarita residence?
Here are three reasons to have your Short Sale Expert continue to short sale a home even if the debt forgiveness act is not in place:
1. Control: Having control over the “foreclosure” process. When you start missing payments, your lending institution will call you and tell you that your home is in foreclosure. In some cases, we have seen the foreclosures process take varying amounts of time. With a short sale there is a lot more control over any closing date, even if the short sale is denied by the bank.
2. Cash: Should not be the only reason – in fact, CASH pay outs to short sale sellers are usually pitched by real estate agents that are used to “over promising and under delivering” as part of there typical business model. 🙂 Do some short sale sellers get cash pay outs when short selling their homes? Absolutely, but not as many as you have probably heard about – check with your Short Sale Expert!!
3. Comfort: From a mental point of view – a Short Sale is a showing of good will. Most short sale sellers have not made their payments for a while on their home. You may ask why not just let the home foreclose. A Short Sale is something a seller, who was lent money from a particular bank to buy a home at some point in the past, is telling those that loaned the money – “Hey, I want to try to work this out in some way, shape of form. The More important thing It’s telling the bank, “I respect you enough to not allow the home to go to foreclosure, which will cost you more in the long-run…”
Speaking of “mental”, I do think the bank views all agreements and attempts, besides “Foreclosure”, to be a better “deal” for them. I do know for a fact that foreclosure costs the bank way more money. The time factor gets in the mix when a property forecloses. And time costs the bank money. Damage, properties becoming run down due to neglect, squatters, pipes breaking, etc…
If the Debt Forgiveness act does not get extended this year – is it too late? Negative, it can be extended next year when Congress re-convienes. It’s just the “waiting on pins and needles” part that causes our Short Sale Sellers and those that are in distress the most continued pain.