Should I pay My Property Taxes?

John Rittenhouse is a Realtor with Keller Williams Real Estate in Allentown, PA & is a Short Sale/Distressed Property Expert in Eastern Pennsylvania, serving the Greater Lehigh Valley, Bucks & Montgomery County – he specializes in helping homeowners who OWE more than their home is WORTH. Having earned the Certified Distressed Property Expert designation (CDPE), he successfully closes more than 98% of his Short Sale transactions. In this Frequently Asked Questions format Video Blog,

www.PAShortSaleHelp.com– John answers all of your Short Sale related questions.

Let me start by saying that I certainly can’t tell you whether I think you should continue to pay your property taxes or not – whilst completing a Short Sale.  But I can tell you what experiences I’ve encountered with past clients who’ve paid, and not paid their property taxes during their Short Sale processes.

5 Simple Steps to a Short Sale

John Rittenhouse is a Realtor with Keller Williams Real Estate in Allentown, PA & is a Short Sale/Distressed Property Expert in Eastern Pennsylvania, serving the Greater Lehigh Valley, Bucks & Montgomery County – he specializes in helping homeowners who OWE more than their home is WORTH. Having earned the Certified Distressed Property Expert designation (CDPE), he successfully closes more than 98% of his Short Sale transactions. In this Frequently Asked Questions format Video Blog, www.PAShortSaleHelp.com – John answers all of your Short Sale related questions.

Here are the most important points you’ll want to remember from The 5 Step Short Sale Process:

• Step #1:  We need to place your home on the market!
  • Remember, we’re not listing the home at the price you OWE, we’re listing the home at its current market value – Or, what a bank will lend a new purchaser to buy your home in today’s market.
• Step #2:  We need to receive an offer on your home.
  • This may sound like the most difficult part of the Short Sale process – but it’s actually the easiest.  Most of our listings receive acceptable offers within their first 2 weeks on the market.
• Step #3:  Submit the offer to your bank for review!
  • We’ll work together to compile an extremely thorough and complete Short Sale Package to submit to your bank.  The better the package – the better our results will ultimately be.
• Step #4:  We’ll wait for a response from your bank!
  • The time it will take for your bank to respond to our request for a Short Sale is actually determined by that individual bank.  Different banks take different amounts of time to complete the process.
• Step #5:  We’ll receive a response from your bank!
  • Once we receive a response from your bank we need to negotiate the terms of your individual Short Sale.  The terms can vary depending on each homeowners individual circumstances.

If you think that you may OWE more than your home is currently WORTH – be sure to Speak with John about Short Sales!  A Short Sale is absolutely nothing like a Foreclosure – they have nothing in common what so ever!  Additionally, Short Sales are NOT exclusively for homeowners who are in distressed situations!  A Short Sale can be beneficial to homeowners in many different circumstances.

If You’re Behind on Your Mortgage Payments…

John Rittenhouse is a Realtor with Keller Williams Real Estate in Allentown, PA & is a Short Sale/Distressed Property Expert in Eastern Pennsylvania, serving the Greater Lehigh Valley, Bucks & Montgomery County – he specializes in helping homeowners who OWE more than their home is WORTH. Having earned the Certified Distressed Property Expert designation (CDPE), he successfully closes more than 98% of his Short Sale transactions. In this Frequently Asked Questions format Video Blog, www.PAShortSaleHelp.com – John answers all of your Short Sale related questions.

What if the Buyer Walks?

John Rittenhouse is a Realtor with Keller Williams Real Estate in Allentown, PA & is a Short Sale/Distressed Property Expert in Eastern Pennsylvania, serving the Greater Lehigh Valley, Bucks & Montgomery County – he specializes in helping homeowners who OWE more than their home is WORTH. Having earned the Certified Distressed Property Expert designation (CDPE), he successfully closes more than 98% of his Short Sale transactions. In this Frequently Asked Questions format Video Blog, www.PAShortSaleHelp.com – John answers all of your Short Sale related questions.

TAX IMPLICATIONS?

John Rittenhouse is a Realtor with Keller Williams Real Estate in Allentown, PA & is the #1 foremost Short Sale/Distressed Property Expert in Eastern Pennsylvania – he specializes in helping homeowners who OWE more than their home is WORTH. Having earned the Certified Distressed Property Expert designation (CDPE), he successfully closes more than 98% of his Short Sale transactions.

In this Frequently Asked Questions format Video Blog – John answers all of your Short Sale related questions.Today John will provide a detailed answer to the Frequently Asked Questions: “Will I have tax consequences as a result of completing a Short Sale?” Firstly, John Rittenhouse is not an accountant or an attorney. Before completing a Short Sale it’s recommended that you consult with both. If you don’t know an accountant or attorney specializing in tax law – we can certainly recommend one to you.

When completing a Short Sale you’re obviously owing more than your home is currently worth. Therefore, there’s a negative difference between what you actually owed on your mortgage and what your home will sell for – we’ll call it a dividend. For example: You owe $200,000 on your mortgage and your home sells for $150,000 – the dividend is $50,000.

After successfully completing your Short Sale, you can expect to receive a 1099 from your former mortgage company classifying that $50,000 dividend as taxable income for the year in question.
Here’s the good news: As a result of the 2007 Mortgage Forgiveness Debt Relief Act, that dividend is not currently taxable for most homeowners.

As mentioned, the provision doesn’t apply to all homeowners, so it’s important to speak with an accountant or an attorney before completing your Short Sale. For instance, if the property isn’t your primary residence, you’re probably going to be taxed on the difference. Additionally, the maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven. If the balance was greater.
When filing for the year in question, the amount of debt forgiven must be reported on FORM 982 and attached to your tax return.

Short Sale vs Foreclosure

John Rittenhouse is a Realtor with Keller Williams Real Estate in Allentown, PA & is the #1 foremost Short Sale/Distressed Property Expert in Eastern Pennsylvania – he specializes in helping homeowners who OWE more than their home is WORTH. Having earned the Certified Distressed Property Expert designation (CDPE), he successfully closes more than 98% of his Short Sale transactions.
In this Frequently Asked Questions format Video Blog – John answers all of your Short Sale related questions.

It’s fairly commonplace for consumers, homeowners and even some Real Estate Professionals to assume that Short Sales and Foreclosures are similar and have few differences.  Please understand that this could not be further from the truth!  The ONLY thing the two have in common is that they’re both ways to get rid of your home – the only difference being – one is the responsible route, and the other is an irresponsible ‘easy way out’ that will in most case come back to haunt you later in the form of contact from the bank, collection departments or attorneys.  Be sure to take a look at today’s video to learn more.

As mentioned in today’s video – the differences between Short Sales and Foreclosures are profound.  Other than them both being avenues of which to rid yourself of real estate you can either no longer afford, or no longer want – they really have very little in common.

Get your Short Sale Starter Kit today!