Short sales
There are 831 short sales presently on the market inside the Las Vegas valley. That is roughly 9.5% of all available properties. There were also 166 short sale closings over the last 30 days. So they are still happening and probably will so into the indefinite future, given that around 22% of all home owners in the valley are still “underwater”, owning more than their homes are worth.
There could be an increase in short sale listings this year. The Mortgage Forgiveness Debt Relief Act was signed into law in December and is retroactive for all of 2015. It looks like it is also part of the overall budget agreement for the coming year. That is important in that it will allow seller’s to do a short sale without, in many cases, the tax consequences. Without MFDRA in place, the debt forgiven is taxable income.
Another interesting option for potential seller’s is the HAFTA program. This program contains a short-sale lease back and option to repurchase the property within one to six years.
There are many other considerations if you are looking to buy a short sale, or are looking to short sale your home. First, if you are a buyer you need to know that the list price may be, or may not be, a reflection on what the bank, the damaged party, may be willing to accept. The seller usually also needs to qualify as to hardship. I have had short sales take anywhere from 4 to 11 months to close. I have also seen homes that were in escrow as a short sale, sell at auction while they are in escrow. The short sale departments of banks sometimes have no idea what their foreclosure departments are doing.
The market conditions are much more stabilized and the short sale process is generally smoother than it was a few years ago. Short sale negotiators, law firms have entered the market. They assist in the “negotiation” with the bank and usually this adds an additional cost to the buyer in addition to the normal costs of closing a real estate transaction.
