Korene's Blog

2010 is to be known as the year of the short sale stated by many in the know and is a great way to save you from foreclosure but be very aware of so called short sale investors who claim to be your friend. Many times they are just looking out for there best interests to make some $$$ on your property.

Here is how the scam works: You list your property with a realtor (friend of the investor) who says he has a investor who will buy your property for a low price after all the foreclosure act of 2007 says you can write off the amount the lender losses. WRONG! Please check with YOUR CPA or attorney. There are a lot of circumstances were this debt will noy be forgiven and you will owe taxes on the amount the lender lost.

In other words lets say you owe $250,000 on a property and you take a offer on your home from a investor for 150,000 and the lender takes 100,000 loss you could be taxed 100,000 as earned income in the right (wrong) circumstances.

If you sold the property to a regular client for 200,000k and the bank only lost 50,000 then you would be taxed on 50,0000 as earned income.

Many of these so called Real Estate Investors are broke, broke, broke did a mention they are broke!! They use a lenders money for 1 day called transactional funding and pay usually 1 or 2 points to the lender for the use of that money for a few hours to sell your home by doing what they call a A to B closing then B to C closing on the same day to a end investor ( a flip) usually putting large profits in there pocket and meanwhile leaving you with a large Tax Bill from uncle Sam.

That's not to say that all real estate investors are bad if your house needs a lot of repairs and the investor purchases it and does some work then sells it a few weeks or month later and makes a profit nothing wrong with that just be careful of the same day flips as you may find a hefty tax bill that you could have cut in half as many times another realtor is bringing that end buyer to your property .There are a lot of advantages to doing a short sale and always list your home with a quality realtor who can sell your home to the end investor without using one of these so called Real Estate Investors if your home is in great condition.

We are experts in mortgage banking and mortgages, short sales and there are many new procedures that came out in April dealing with short sales. If you or a friend is thinking about doing a short sale on your home contact us and we can help you with your decision by referring you to the best experts for your situation.