With the tax exemption of debt-relief expiring at the end of the year, we keep thinking that there will be a surge of short-sale listings coming to market.
Not only is there NOT a surge of short-sale listings, there’s not a surge of ANY listings, relatively.
Here are the total new listings that came on the market in SD County between March 1st – 15th:
| Year | New Listings | LP $/sf |
| 2009 | ||
| 2010 | ||
| 2011 | ||
| 2012 |
Maybe people are just going to go into Foreclosure knowing that they can get another year or two of free rent?
What are the tax implications of a Short Sale vs. a Foreclosure followed by a Bankruptcy?
“What are the tax implications of a Short Sale vs. a Foreclosure followed by a Bankruptcy?”
As far as I know the tax exemption applies equally to Short Sales and Foreclosures. You’d have to be proactive enough and seriously worried that the government won’t provide some kind of relief after the fact to enter into a short sale now. It’s a gamble of more free rent versus getting nailed by the IRS in 2013 or later. Bankruptcy might get you out of the taxes but that’s not guaranteed. It wouldn’t surprise me to see the “free renters” get hammered later on by either the IRS or debt collectors that pick up seconds/HELOCs with a recourse option.
If I had to guess who would blink in a game of chicken between the free renters and Congress I think Congress will blink before the election. If I had any money in the game that would be where I’d put my bet.