Lovettsville Real Estate News
By: Karen Wenner Cooper
Did you know that despite the health of our current real estate market, there are still a few bank owned or “REO” (real estate owned) properties available on the market, and quite a few short sales?
A bank owned or “REO” property, also commonly referred to as a foreclosure, is a property that is now owned by the bank. The process of the bank taking back the property in the event of homeowner default is called foreclosure, and once the foreclosure process has happened a trustee’s sale takes place on the courthouse steps whereby either a purchaser buys the property (sight unseen) or the bank takes it back (which happens often, as the reserve price is often above market). In some occasions, the homeowner may do what’s called a “deed in lieu of foreclosure” where they save the foreclosure process and agreeably give the property back to the bank. In either case, for distressed homeowners there can sometimes be “cash for keys” available to them from the bank or new owner to assist with moving expenses. When these properties come on the market, they are all sold strictly as is, and in some cases have sat vacant for months. Mold and water issues are not uncommon. Occasionally it is possible to negotiate with the bank for repairs in extreme cases (I was able to have a bank replace the roof on a property for one of my purchasers once; however this is not the norm).
The short sale process is what happens when a homeowner is unable to sell their home for the current market value, and so all offers must be reviewed and approved by the bank. They are “short” on the payoff, and the bank agrees to take less than what is owed. I’ve worked with many of these transactions over the past many years, representing both buyers and sellers, and can say that each one is different. In some cases the bank will foreclose even with a viable offer on the table. In other cases, the seller never misses a payment and the short sale is approved. I’ve seen them take 30 days to be approved, and other times up to a year. For the seller of the property, there are occasions where the bank will ask for a cash payment to agree to the sale, although that is less and less common these days. The IRS can tax the seller on the amount of debt that is forgiven, which can be a substantial hardship to an already struggling homeowner. However, there is currently a law in place that prohibits the taxing on that debt forgiveness up to $1,000,000 on a principal residence. That law will expire on December 31, 2016, and so if you have considered selling your home as a short sale, now is the time.
If you would like more information about bank owned listings, or the foreclosure or short sale process, please don’t hesitate to contact me at Karen@GoPlatinumGroup.com.
Karen Wenner Cooper is a lifelong resident of Lovettsville and top-producing licensed Virginia realtor since 2002. She is affiliated with Platinum Group Real Estate at Pearson Smith Realty. Written by:Karen W. CooperAssociate Broker / Realtor® Owner, Platinum Group Real Estate at Pearson Smith RealtyCell: 540.454.0467Email: Karen@GoPlatinumGroup.comWebsite: www.GoPlatinumGroup.com Click here for the printed article.