“NAR will be working to obtain an extension throughout the year”.
It sounds like they are getting ready to begin to think about starting their calls to Congress. But this is an election year, and if they don’t already have this well in hand by now, how much luck will they have in the next nine months?
Could it be positioned as a vote-getter?
It’s about the only way to get the attention of a politician, and even then there will be plenty of disgust among the good-paying Americans.
I think it will be allowed to expire.
The closer we get, the more panic we’ll see on the streets. The natural inclination will be to aggressively price a short sale, so it sells immediately. But it will be smarter to price them at the comps, so there aren’t appraisal issues later.
Even though the servicers have done wonders lately to pare down the processing time to 2-3 months, if a surge of short sales rolls in, will they be able to handle them?
Probably not, and they shouldn’t have any liability to process them expediently. “Heck, we’re doing the best we can!”
For buyers and sellers alike, to have some assurance that your short-sale escrow will close in time, you should be in process by mid-summer at the latest. Otherwise, the sellers will be hoping that the N.A.R. lobbyists can pull off a last-minute miracle, or get the new Congress to approve a new version, and back-date it.
Sellers will want to cancel sales that cause them to pay regular income tax on the debt relief – they’ve had it so good for so long that they’ll expect more favors.
Listing agents should write in their counter-offers that if the sale is not consummated by 12/31/12, then it automatically cancels if there is no new exemption in place.
How many buyers will go for that?
The exemption applies to those who get foreclosed too – will lenders do borrowers a favor and hurry up and foreclose on them by the end of 2012? It should provide more thrills to our wild ride the rest of the year!
Straight from the IRS: