Tax Relief for Short Sellers

Tax Relief for Short Sellers
Tax Relief for Short Sellers

 

Tax Relief For Short Sellers

 

Great news if you’re thinking about a short sale on your home—Congress has just extended the Mortgage Forgiveness Tax Relief Act for another year.  The act has its roots in 2007, enacted to help those whose mortgages had suddenly outpaced the actual market value of their homes.  In the simplest terms, the act protects the seller from having to claim the amount of debt forgiven by their lender on a short sale as taxable income for that calendar year.  For the last couple of years the act has required renewal by Congress and actually didn’t exist for the year 2015 until it was just recently renewed retroactively.  What this means is if you’re thinking of a short sale, now is the time to act—the process takes longer than a conventional sale and the tax relief act is only guaranteed to be at your disposal for 2016, there’s no guarantee that it will be available beyond that.

 

The actual Mortgage Forgiveness Tax Relief Act is a bit dense and full of financial jargon, so lets break it down to what’s important to you, the seller-

 

  • Normally when a home is sold for less than what is owed on its mortgage the amount of debt forgiven is considered taxable income by the IRS.

 

  • The Mortgage Forgiveness Tax Relief Act protects the seller from having to claim the forgiven debt as taxable income as long as a few criteria are met-
    • The amount of forgiven debt is below two million dollars
    • The home has been the seller’s principal place of residence for two of the last five years
    • The debt was for buying, building or making improvements on the home

 

  • The act has only been extended to cover the 2016 calendar year. Considering that the amount of time it takes to complete a short sale can far exceed a conventional real estate transaction it is definitely in your best interest to contact your real estate agent and begin the process as soon as possible.

 

While a short sale is never anybody’s idea of a perfect situation, the Mortgage Forgiveness Tax Relief Act does help ease the financial burden on the seller.  To make sure you qualify for forgiveness through the act consult a trusted real estate professional.  The inner workings of taxes and real estate can be complicated and teaming up with someone who deals with them everyday and has a network of financial and legal professionals at their disposal is your best bet for coming out of this in the best shape possible.  –  – ——-Michael Larson

 

Market Update- What This Means To You

Snohomish County Real Estate Market Update

Market Update - What this means for you
Market Update – What this means for you

Hi there everybody, here’s a little update on the state of the real estate market in Snohomish County and what it all means to you.

In August there were 10,603 transactions in progress versus 9,921 new listings in the area. This makes the fifth month this year that sales are outpacing new inventory hitting the market.

What this means to you– The market is moving fast and desirable homes aren’t staying on the market very long.  Multiple offers are common.  So, if you’re looking to buy it’s important to have your ducks in a row before you find that perfect home as time is of the essence.  The number one thing you can do to prepare yourself is to contact your realtor now.  They can help you get in touch with a qualified lender and get ready to make an offer as soon as you find the home that fits your needs.

  • Inventory will continue to drop as winter approaches. Historically, new listings drop about 50 percent during this time of year.

What this means to you As winter approaches many sellers may decide to wait until spring to list their home.  Coupled with the existing dearth of listings in the area it becomes even more important to realize that there is no waiting out the current lack of inventory if you’re a buyer.

  • Accurate pricing is still important. According to John Deely of Northwest MLS, “the market is reacting quickly to accurately priced listings but overpriced ones are sitting with little activity.”

What this means to you Once again, the service of a reputable realtor is critical whether you’re a seller or a buyer.  Pricing isn’t a guessing game your realtor has access to information and tools to accurately price your property based on market history and comparable properties in the area in order to insure maximization of your profits in a minimal amount of time on the market.  For buyers, your realtor can help you avoid those overpriced properties and get you the most home for your money.

  • Interest rates continue to be low and stable but there are rumors about a rise in the near future.

What this means to you Buyers are and will continue to be motivated.  The current low-interest rates help keep mortgages manageable thereby encouraging purchases.  Rumors of an eventual increase in interest rates in the near future only spur that on.  Not to harp on the matter, but there is just no magic gap in the market to wait for where prices are expected to drop or inventory is expected to explode.  If you are looking to buy there really is no time like the present.

The real estate market is always changing and there’s no reason to attempt to make your way through it by yourself.  Make an appointment today to speak to a Selling Snohomish team member—nobody else can help you navigate the Snohomish County market better than we can.

Sept 2015 Market Stats
Sept 2015 Market Stats

– Michael Larson

 

MEGA Camp

Mega Camp 2015
Mega Camp 2015

Our team has just returned from Mega Camp– an intense five-day conference in Austin, Texas where we were able to network with and learn from some of the most successful and influential leaders in the real estate industry. Maybe flying half way across the country to attend a conference sounds extreme to some, but it’s just part of who we are.  Real estate is an ever-evolving industry and it takes constant training to stay abreast of the latest trends, knowledge and laws. The dynamic nature of the business is part of what we love most; it keeps us on our toes.  We’re so excited to put the innovations and strategies we learned in Austin to work for our clients here in Snohomish County.

It probably wouldn’t surprise you to know that medical doctors are required to complete ongoing education courses in order to keep their licenses current.  It also probably wouldn’t surprise you that lawyers have a similar requirement.  But did you know real estate professionals are bound by the same type of standards?  A real estate agent requires the same amount of continuing education as a lawyer.  Keeping current in subjects such as real estate law and advance practices is not only mandatory, but it also helps us to provide our clients with what we believe to be the best service in the region.

We believe education is a major part of what makes the Selling Snohomish Team great.  As representatives of Keller Williams we take to heart the word of our founder, Gary Keller, when he says that we are “a training and coaching company that also happens to be in the business of real estate.”  We go beyond what is required by law–honing our skills, attending seminars and conferences, and participating in hands on training with the goal of being the best real estate team in the Pacific Northwest. – Michael Larson