Michele Rose is a Realtor and Professional Home Stager in Burlington County, NJ. She has been assisting both buyers and sellers with their real estate needs for the last 5 years. In 2007, she formed Rose-Colored Staging to help sellers market their homes with professional home staging.
5 comments • Michele Rose, Moorestown Real Estate & Staging • December 30 2009 02:57PMFollowing is a great post I came across about with great advice if you're in a short sale situation. A short sale is still preferable to foreclosure-- call me today if you need to sell your home!
It is bad enough that a short sale does involve the loss of a home with no equity to show for it, and a negative credit record that may last for a long time; it also has the potential to make two very bad after-effects. One is that the lender may continue to pursue the seller for the remainder of the debt. The other is that the I.R.S. seek a tax on the amount of the unpaid debt.
The borrower may have been required to sign a promissory note for the difference between the debt and the sale proceeds. Or, a lender may require the borrower to sign a paper acknowledging that the lender reserves its right to pursue the borrower for that amount.
The second possibility lies in the fact that, if a debt is forgiven, the borrower may be taxed on the amount he didn't have to pay back. (see I.R.S. publication 4681). There are some exemptions.
I don't think that a seller that sells short should suffer both.
Here is what can happen: In allowing the short sale, the bank requires the borrower to sign a note for the difference, or to acknowledge that the bank has the right to take action to collect that amount. Also, probably sometime later, the bank sends out a 1099-C, informing the I.R.S. that a certain amount of debt had been cancelled.
NO ONE who has dealt with a short sale would raise the question: "How could this happen? The two actions contradict each other!" That is because anyone who has been through the process knows that it is common for the right hand of the bank not to know what the left hand is doing!
Sellers should retain all paperwork. If they signed a document to the effect that the bank was going to pursue its unpaid interest, he should hang on to that. Then, if he receives a 1099-C saying that the debt was forgiven (and, therefore, taxable), he will have support for the claim that the 1099-C is incorrect.
On the other hand, suppose that there was no specific release of the debt and that the paperwork contained no reference to it. Then, if the seller receives a 1099-C, saying the debt was cancelled, he should keep that, just in case the bank comes a calling!
3 comments • Michele Rose, Moorestown Real Estate & Staging • December 18 2009 11:25PMHomes are our business. But there are people this holiday season who are without a home. They are without the security, the warmth, and the comfort that a home can bring.
When Rose-Colored Staging decided to decorate the front lobby of Weichert, Realtors in Burlington, NJ , we also decided to use it to donate to those less fortunate. We looked for a local shelter and came across Providence House, a shelter that offers refuge to victims of domestic violence. These victims often include little children.
"May Your Home Be Filled with Warmth & Love this Holiday Season"
I remember, as a little girl, the comfort and protection I felt from my Teddy Bear. It was one of my most treasured stuffed animals! So we decorated the lobby with a collection of Teddy Bears, all brand-new just waiting to go into the arms of a child.
All Teddy Bears donated between now and Tuesday, December 22nd, will be donated to Providence House for the children there. I am hoping our display grows as we bring in more Teddy Bears!
If you would like to donate a brand-new Teddy Bear, please bring it to:
Weichert, Realtors, 2313 Burlington Mt. Holly Rd., Burlington, NJ 08016
Hours: M-F 8:30a-9:00p, Sat. 8:30a-6p, Sun. 10a-5p
Have a Beautiful Holiday Season!
Michele Rose is a Realtor and Professional Home Stager in Burlington County, NJ. She has been assisting both buyers and sellers with their real estate needs for the last 5 years. In 2007, she formed Rose-Colored Staging to help sellers market their homes with professional home staging.
4 comments • Michele Rose, Moorestown Real Estate & Staging • December 16 2009 11:17AMContent © 2009 'Frequent Contributors'. Design © 2009 ActiveRain Corp.
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