short sale article in california.
Explains that is critical that the listing agent can take a leadership position with a bank during a short sale negotiation.
Which is true. But I think leadership involves more than waiting for an offer to get submitted and then starting the process. A listing agent combined with an attorney can take real leadership role with the bank.
There are reasons to get these negotiations done quickly with a bank. There are ways to frame the negotiation so that the homeowner does not get stuck with an every increasing potential IRS bill for debt forgiveness.
In my opinion for many homeowners it may be negligent to wait to a buyer comes forward negotiate a short sale and tell the homeowner well the bank is not going to seek a deficiency judgment but you will get loan forgiveness bill and there is nothing you can do about it because it is a taxable event.
I suggest that homeowners contact attorneys familiar with this area of the law as well as real estate agents.
If the real estate market is falling - every day waiting for a buyer could be increasing the likelyhood of a larger IRS bill.
Just imagine how the owner will feel when she gets a 1099 for $100,000 and finds that her tax bracket is also higher.
San Jose Mercury News - `Short sales' can bail out underwater borrowers
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