If you have been looking for some incredible real estate market deals, then the time is now! Although the number of foreclosures on the market is quickly dwindling, the number of short sales is soaring. If you are an investor or potential homebuyer looking for an incredible deal on real estate, then you have between now and the end of the year to take advantage of a rising inventory of short sale properties – which can be purchased well below market value.
Increase in Short Sales
Why, exactly, is the number of short sales rising? With the mortgage settlement agreement, lenders are encouraging short sales over foreclosure and are even offering cash incentives for struggling homeowners. As a result, more homeowners and lenders are agreeing to a short sale as opposed to foreclosure, which has contributed to the rise of short sale properties on the market.
At the same time, lenders have found out that having a high foreclosure inventory is taxing. Not only are the lenders then responsible for selling the properties, but they are also tasked with ensuring that the property is maintained and not a hazard to surrounding neighbors. Furthermore, many abandoned properties and foreclosures have been vandalized and used for squatting. In the end, lenders and struggling homeowners have been opting for short sales as opposed to foreclosure more and more over the last few years, which has led to a rise in short sales on the market.
At the same time, short sales are actually leaving the market quicker than foreclosures and potential homebuyers and investors take an interest in purchasing short sales.
End of Short Sales Tax Break
Along with the push from lenders for struggling homeowners to consider short sales instead of foreclosure, the deadline for the short sales tax break is quickly approaching – which is set to expire December 31. The tax break essentially makes it so that the homeowners are able to avoid paying federal taxes on the unpaid portion of their mortgage. However, this act – better known as the Mortgage Debt Forgiveness Act – will expire at the end of the year. As a result, many struggling homeowners are striving to complete their short sales before this quickly approaching deadline.
Fiscal Cliff and Real Estate Investing
At the same time, many homeowners and those who have been closely monitoring the real estate market are fearful of Congress being unable to resolve the issues associated with the pending fiscal cliff. As the fiscal cliff quickly approaches, many people fear that failure to resolve these issues will ultimately result in another recession, which would eliminate all of the progress that has been made in the current real estate market. This fear of the fiscal cliff has essentially kept home prices relatively low.
In conclusion, investors and potential home buyers looking to purchase short sales or other distressed properties has the perfect window of opportunity from now until December 31. Start searching for your perfect investment property or new home today!
The following video has more information on the fiscal cliff and its relation to the real estate market.