Why I won't list short sales
Tuesday, May 19, 2009 at 1:37PM Why I won’t list a short sale…..
Fact: According to Campbell Communications, only 23% of short sale transactions are completed......
Most buyers bail out in frustration from waiting long periods of time to get answers. Most liens have been packaged and sold so many times in “bundles”, they don’t know who the actual lien holder is.
But, you’ll laugh because that’s not why I won’t do short sales. I won’t touch a short sale because no one has been able to explain to me, in simple language, what the tax ramifications and penalties are for the deficiency, for the SELLER.
The Law Office of Diane Drain, a Phoenix Bankruptcy Attorney, has the closest thing to an explanation of what sellers May have to pay taxes on the deficiency. Look HERE for a comprehensive article covering both foreclosures and short sales. If you open the link, and read the article it becomes obvious that the SELLER needs professional legal help in terms of understanding both taxes and the actual deficiency.
Some of you reading this are saying, but Arizona is an ANTI-DEFICIENCY state. It is, but in the anti-deficiency statutes, it never mentions “short sales”, which are technically, “negotiated settlements” with lien holders. There have been cases where lien holders have sued the SELLER even after giving a notice of forgiveness of the deficiency.
The administration seems to be pushing for easier short sales to be made, by formatting the way short sales are done across the board, no matter the lien holder(s). We’ll wait and see if that moves the process of short sales along. Sellers of short sales should seek out profession tax and legal advice prior to signing on the dotted line.
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