Short Sales – Parsons Realty

1294 Dusty Ln Redding CA

APPROVED SHORT SALE! Convenient East Redding location. Home is in good shape with hardwood flooring throughout and upgraded fixtures and appliances in kitchen. Living room has track lighting and a Quadra Fire Fireplace insert. Large backyard with wood decking and mature shade trees.

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Churn Creek Rd to Mistletoe, east on Mistletoe to Shady Ln. Shady Ln turns into Dusty Ln. House is on the right.

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Negative Sentiment Towards Buying Foreclosed Properties Decreasing

A recent survey conducted by Trulia and RealtTrac found that the negative sentiment towards buying foreclosed properties has decreased compared to one year ago. With 78 percent of U.S. adults believing there are downsides to buying foreclosed properties compared to 85 percent in May 2009. Among those who think there are negative aspects to purchasing a foreclosed home, the top concerns about purchasing a foreclosed property between May 2010 and May 2009 include:

Negative Sentiment	May 2010	May 2009
Hidden Costs	68 percent	71 percent
Process is risky	49 percent	46 percent
Home will lose value	35 percent	31 percent

“Although fewer consumers expressed interest in buying a foreclosed home than a year ago, the actual sales of bank-owned properties (REOs), along with sales of properties in the foreclosure process, continue to increase — accounting for more than 30 percent of total sales in the first quarter of 2010 according to our data,” said Rick Sharga, senior vice president for RealtyTrac. “We anticipate that there will be an increased number of both REO purchases and short sales throughout the rest of the year as the most active buying segments – first time home buyers and investors – continue to look for bargains.”

“It appears that potential homebuyers are taking a more realistic view of foreclosure purchasing,” Sharga continued. “Buying a foreclosure property still provides an opportunity for dramatic savings on a home, but the time and effort involved in executing a short sale, bidding against other buyers for an REO, or the need to do renovations may be issues for buyers not as focused on getting the best price.”

The Bank-Owned Discount

The survey also found that 18 percent of U.S. adults expect bank-owned homes to offer a realistic price discount of less than 25 percent off the value of a similar home that was not in foreclosure. However, not all consumers have realistic expectations, with 36 percent saying that they expect to receive a discount of 50 percent or more when purchasing a bank-owned property. Most consumers (95 percent) would expect to pay less for a foreclosed home than for a similar home for sale that is not in foreclosure.

The survey also found some interesting demographics of who is buying the foreclosed homes.

Renters are showing strong interest in buying foreclosed properties, with 57 percent at least somewhat likely to purchase a foreclosed home in the future. In comparison, only 40 percent of current homeowners would consider buying a foreclosure in the future. Additionally, the likelihood to consider purchasing a foreclosure decreases with age: 65 percent of renters ages 18-34, 63 percent of renters between the ages of 35-44, and 54 percent of renters ages 45-54 are at least somewhat likely to consider purchasing a foreclosure, compared to only 31 percent of renters 55 years and older.

California Short Sale & Foreclosure Tax Update

Thursday State lawmakers passed SB 401 which will exempt borrowers who lost their homes to foreclosure or short sales in 2009 from paying state taxes.

State officials say as much as 100,000 people statewide will be spared from paying tax they otherwise would owe.

The bill extends the state ban from 2009 through the end of 2012. It also bans state taxes on federal stimulus grants for renewable energy projects.

The bill still needs to be signed by Gov. Schwarzenegger, however a spokesman for the governor said he will sign the bill.

Who is affected:

Primarily, the bill affects people who had debt forgiven as they lost homes in foreclosures, short sales and deeds in lieu of foreclosure last year – and through 2012 now. Also affected: those who got loan modifications that cut the amount they owe the bank.

The Franchise Tax Board says the tax forgiveness measure mostly applies to people who refinanced their homes to get better interest rates or extract equity, and then had a short sale or foreclosure where debt was forgiven.

But the tax board also warned that refinanced dollars taken out as cash and spent on items other than home improvements may be taxable.

Who is not affected:

Those who bought houses and never refinanced before doing a short sale, loan modification or foreclosure are unaffected. In most cases the banks just take back the houses. There is no forgiven debt, and no tax bill, said the tax board.

Investors are also unaffected. They still must pay state taxes on forgiven debt. The bill affects only people who live in their home.

What people should do now when filing their taxes:

The Franchise Tax Board says: “Once the governor signs this into law, California taxpayers will not have to do anything. If they qualify for federal relief on the mortgage debt forgiven, then they will also qualify for state income tax purposes. California Form 540 starts with federal adjusted gross income so there will be no adjustment necessary to properly reflect the state adjusted gross income amount for this issue.”

Read the full article from the Sacramento Bee

But Wait…There’s More!

There couldn’t be a better time to walk away from your house! As a refresher, see my blog post from November 5th 2008 regarding the short sale process and the “Cash For Keys” some lenders offer homeowners as an incentive to go away quietly.

I’m posting today about another government program that could put some cash in your hands. That is, if you’re facing the foreclosure of your home. The government program I want to tell you about was created to increase the viability of short sales; here are the rules if you want to play.

In December, the Treasury Department modified the rules of the Home Affordable Foreclosure Alternatives Program (HAFA). The new and improved rules have streamlined the process at the national level. Some of the interesting excerpts of the rules require lenders to answer a request for a short sale within 10 business days (including furlough days). To sweeten the pie, lenders will receive $1,000.00 to help cover the cost and speed up the process of a short sale. Just like in the movies when you tell the cabbie to, “step on it” as you toss a Benjamin at the driver.

Now here’s the good part. You, the former homeowner receive FREE CASH. That’s correct, if you act now you’ll receive $1,500.00 as a “relocation incentive” to cover moving costs or other incidentals. Fine print: to be deducted from the sale price.

Okay, here’s the catch: The new rules don’t kick in until April 2010. So if you can’t afford a loan modification (do you know anyone who has received a loan modification?) or if you don’t qualify for a loan modification, you’ll be stuck searching for other government program(s). Stay tuned as I will be posting more government programs as they become available (subject to taxpayer funding.)

Note: A short sale is the process of selling a house for less that what is owed to the lender (bank). Therefore, the lender(s) must agree to a short payoff. Why would a lender agree to accept less than what is owed? The lender may agree to a short sale if the market conditions would cause a house to sell for a lower amount than the outstanding loan balance. The lender also has other options including foreclosure. Sometimes the lender may profit from a short sale, check out a prior post “How Banks Can Profit When You Lose Your Home” In most cases, it’s the lender’s option to agree to a short sale.

Due to the current financial climate in Shasta County, it’s my experience many lenders agree to participate in short sales. In most cases, the owner of the property fares better in a short sale too. The homeowner can mitigate any legal ramifications and/or further damage to their credit rating by using the short sale process. Short sales offer many other benefits to homeowners too numerous to discuss here. If you’re considering a short sale, you’re welcome to email or call. Often times we can turn your “lemons” into lemonade.

What do you think? I’d like to hear your thoughts, post your comments below.

New Bill Could Relieve California Homeowners of Paying Forgiven Debt Tax

Yesterday the California Senate voted 21-15 to approve legislation that would relieve the tax liability of California homeowners from who have had forgiven debt from a foreclosure or short sale. The bill will make changes to the state’s law to make it more consistent with the federal tax law.

The bill is now in front of the governor and if signed it will become immediately effective. It is retroactive to include the 2009 tax year and the exemption on state taxation of forgiven mortgage debt would remain in force through 2012.

For more information about Forgiven Debt Tax download our FAQ
https://www.parsonsrealty.com/parsons_realty/taxes/car_faq.pdf

or for more information on the Mortgage Debt Forgivness Act and Federal Tax Law visit the IRS website.
https://www.irs.gov/individuals/article/0,,id=179414,00.html

1294 Dusty Ln Redding CA

Property Details

Property Photos

Driving Directions

Property Map

Negative Sentiment Towards Buying Foreclosed Properties Decreasing

California Short Sale & Foreclosure Tax Update

But Wait…There’s More!

New Bill Could Relieve California Homeowners of Paying Forgiven Debt Tax

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