Short Sale Northern Virginia

You’d be surprised with the list of short sale northern Virginia has completed so far this year. If you’re interested in pursuing, you can get an amazing deal on the property of your dreams. And if you’re interested in selling it’s comforting to take a look at the successful short sales that’ve taken place lately. Check it out!

3853D TIBURON PL #77D

This two-bedroom, 1 1/2 bath, 1,100 square foot condo short sale northern Virginia sold for only $90,000. It’s was appraised at $105,550 so the new owners got a great deal! Amenities include an on-site swimming pool.

5363 COURTNEYS CORNER RD – SUMERDUCK, VA

This three-bedroom, 3 bath ranch style home with 1,508 square feet of living area and 1.87 acres sold for $90,000 and was worth $163,000. It featured:

  • Kitchen/dining room combo
  • Den with brick setting for a stove
  • New windows
  • New doors

11260 TORRIE WAY #B – BEALETON, VA

Lucky buyers got this short sale condo in northern Virginia with two-bedrooms, 2 baths and 936 square feet for only $90,000 when it was worth $113,400. Located on the 1st story in a quiet and peaceful neighborhood that is ideal for commuters, it features a large family room, kitchen with island bar, separate dining area, and a laundry room with washer and dryer.

631 WATERLOO RD #124 – WARRENTON, VA

This two-bedroom, 2 bath condo sold for $90,000 and is worth $90,700. Buyers will enjoy a traditional floor plan with outdoor entertainment space in a great location.

1404 MARY ST – WOODBRIDGE, VA

This split level offering 3 bedrooms and one bath sold for $90,000 and was appraised at $162,700. It has a basement with stairway access and a beautiful yard.

411 BIRCHSIDE CIRCLE – LOCUST GROVE, VA

Buyers for this short sale got a lovely four-bedroom, 3 bath home in a wooded setting, offering 1,442 square feet of living space. Amenities include being located on a cul-de-sac street for minimal traffic. It sold for $90,000 and is worth $163,400.

In addition, it has:

  • Basement
  • Big porch
  • Galley style kitchen
  • Gated community
  • 24 hour security

Residents have access to golf, boating, tennis, fishing, beaches, and a community clubhouse.

5911 EDSALL RD #1109 – ALEXANDRIA, VA

This condo perfect for commuting to DC sold for $90,000 and is worth $90,189. Condo fees include it all, lawn care, Master insurance, parking, pool, security, sewer, snow removal, tennis courts, trash, water, workout room and sauna.

102 ESSEX ST – STAFFORD, VA

This three level, 3 bedroom, 1 1/2 bath townhome with hardwood floors, ceramic tile, newer siding, windows, sliding glass door, and undated deck came furnished and sold for $90,000.

As you can see, there are great deals to be had if you are interested in a short sale property. Take a chance and see if you can find the home of your dreams, or flip the property and make some money!

VA Loans And Short Sales

For many years, VA loans have been used by numerous military personnel past and present to obtain home ownership. Considered to be one of the U.S. government’s most successful ventures, the VA loan program has allowed many people to obtain homes for pennies on the dollars via short sale. In today’s real estate market, VA loans and short sales go hand-in-hand, although the procedure can offer both advantages and disadvantages.

Why Use a VA Loan?
In addition to allowing military personnel the opportunity to experience home ownership, a VA loan has a number of other advantages. When purchasing a short sale home, those advantages can include:

  • Zero cash down on some home purchases
  • Low interest rates
  • Up to six percent of closing costs paid by seller
  • No penalties for early or pre-payments
  • No monthly mortgage insurance premiums

In addition to these advantages, no further credit underwriting is needed by the VA when it comes to VA loans and short sales.

Hurry Up and Wait
While there are many advantages when it comes to VA loans and short sales, there are some disadvantages as well. Perhaps the biggest is the gap between the time an offer is made on the property and when the seller chooses to reply with an acceptance or counteroffer. In some cases, the potential buyer can wait 60 days or longer, during which time interest rates can possibly go up. In addition, the VA will not guarantee a property unless its living conditions are safe for occupancy and the sale price is justified.

Buyer Beware
Just like purchasing a used car or other big-ticket item, many homes purchased through VA loans and short sales carry a large amount of risk with them. Most homes that are close to going into foreclosure and wind up as short sales are sold “As Is” to the buyer, which can be both a blessing and a curse. While the price may be bargain-basement, the repairs needed to bring the house back to respectability may be substantial. In fact, some short sale homes are purchased sight unseen, which can be an extremely risky venture. To be safe when it comes to combining these loans and short sales, an inspection of the property should be done prior to any purchase being final.

The Perfect Combination
While there are always risks involved when purchasing real estate, those buyers who combine VA loans and short sales often have much success. The ability to purchase a home at a much lower price than market value, along with needing little if any money down makes the process well worth the time and effort it takes.

Can I Short Sale An Investment Property?

Absolutely.

Some people erroneously believe that short sales are only an option for personal primary residences. This is not the case.

You can still do a short sale for investment properties as long as the house is worth less than you owe + closing costs and you have a documented hardship. Hardship for an investment property could be any situation affecting your finances and/or the profitability of your investment property. This could include a significant damage or unexpected expense for the property (such as HVAC, structural, or other replacement necessary), an extended unplanned vacancy, decrease in rents, etc, to the point that you can no longer afford mortgage payments.

Your credit will still be negatively affected, but short sales are an alternative to foreclosure or an opportunity to get out from under a struggling investment property.

To learn more about whether a short sale is right for you, call Rob’s team today at 703-212-3344.

What Does a Short Sale Cost Me?

For homeowners who can no longer keep up with their mortgages, worrying about fees and expenses to do a short sale is the last thing they need. Fortunately, using a short sale expert to help your sale doesn’t have to cost you an arm and a leg.

When you use our team of experienced short sale agents:

You will not have to pay commission on the sale.

You will not have to pay any out of pocket fees.

You will be cleared of deficiency debt.

This is not necessarily the case (especially the deficiency debt erasure) with all short sale real estate agents, so make sure you ask!

There may be some costs along the way that will make the process smoother if you can at all afford to pay them. These include any unpaid Real Estate Taxes, Tax Liens, HOA fees, Condo fees, and any other liens on the property. At the very least, you need to let your negotiators know about any and all of these unpaid costs as soon as possible to coordinate your strategy for negotiation with the bank. Finding out about an HOA lien on the property at the last second can derail an otherwise progressing short sale!

If you think a short sale might be the right option for you, you can give us a call to find out more about how our team can help you get your underwater property sold at 703-212-3344 today.

 

Insolvency Clause Tax-Saving Alternative to Mortgage Forgiveness Debt Relief Act in 2015

On December 16, 2014, President Obama signed a bill that extended the Mortgage Forgiveness Debt Relief Act retroactively to cover mortgage debt cancelled in 2014. The Mortgage Forgiveness Debt Relief Act (MFDRA) prevented homeowners who went through a short sale from being taxed on the amount of their home mortgage debt that had been forgiven. For homeowners to qualify for a tax break in 2014, their short sale must have closed by December 31, 2014.

The Act was only extended through 2014. Congress is expected to debate further extension of the Act as part of a larger tax package in 2015. In the meantime, mortgage debt forgiven by a lender in 2015 might count as taxable income.

According to a brief from the National Association of Realtors (NAR), about 5.3 million homes are still under water. In addition, there are still more than 1 million homes in the process of foreclosure. If the Mortgage Forgiveness Debt Relief Act is not extended further, hundreds of thousands of American families who did the right thing by short-selling their home will have to pay income tax on income they never received.

IRS “Insolvency Clause” Offers Tax-Saving Alternative

Short sale sellers can still be exempt from tax liability under the “insolvency clause” of the Internal Revenue Code. The clause states that a seller is exempt from paying tax on any forgiven debt to the extent that they are insolvent. In other words, if the seller’s debts and liabilities exceed their assets by more than the amount tax breaksof debt forgiven, they do not have to pay taxes on the forgiven debt.

Here’s an example of how the Insolvency Clause works:

A seller has a home valued at $300,000, but the mortgage debt is $400,000. We short sell the property for $300K and the bank elects to forgive the debt on the $100,000 shortfall amount. Since debt that has been forgiven counts as taxable income, the IRS would treat the $100,000 of forgiven debt as income.

MORTGAGE DEBT $400,000
SALE PRICE -$300,000
FORGIVEN DEBT
(Taxable income)
$100,000

This is where the insolvency clause formula comes in. Begin by adding up all of your debts/liabilities in one column and all of your assets in another. For this formula, the IRS wants you to include the mortgage debt as a liability, and the fair market value of your house as an asset. Let’s say you have $600,000 in assets and $700,000 in debts/liabilities. You are insolvent by $100,000.

ASSETS $600,000
LIABILITIES -$700,000
INSOLVENCY [$100,000]

Since your insolvency amount of $100,000 equals the forgiven debt amount of $100,000, it’s a wash and you will not have to pay taxes on that forgiven debt. You are shielded dollar-for-dollar on the amount of forgiven debt up to your insolvency number. Let’s say you were only insolvent by $80,000. In that case, you would still have to pay income tax on the remaining $20,000 of forgiven debt.

INSOLVENCY [$100,000]
FORGIVEN DEBT -$100,000
TAXABLE INCOME -0-

If you are underwater on your home mortgage and need to sell your house, what do you do now? Call Robert Chevez’s Short Sale Team at 703-212-3344 today!

 

Doing A Short Sale While In Loan Modification

As a homeowner looking in to short selling your home, chances are you have explored several different options for your situation. Many people explore loan modification as an alternative to short sales. The main difference between the two is outlined below:

Short Sale involves SELLING your home. You list it for sale with a Certified Home Rescue Expert© realtor and find a buyer. Then your realtor, with the help of a professional team of attorneys, negotiates with your lender to accept the preferably market value offer and let you walk away owing nothing. It sounds too god to be true, but it works – just ask about my 99% success rate.

Loan Modification involves the homeowner working with their lender to change the terms of their mortgage loan to make it more affordable. Past due amounts and/or the difference in the new lower monthly payments are typically rolled into the loan.

There is a problem, however, if you initiate a loan modification and then decide to do a short sale instead. Many times, the loans get “stuck” in modification, and if the property owners do not disclose to their real estate agents that they have tried to do loan modification, it can tie up the process of doing a short sale, making the process even longer and more complicated.

The best thing to do if you decide to do a short sale after trying to get a loan modification is to follow up by calling your lender, writing a statement declining modification, and getting confirmation that they will end the loan modification.

If you are interested in doing a short sale on your property instead of a loan modification, give Rob and his team of short sale experts a call at 703-212-3344 today!