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Welcome to Myrtle Beach Short Sale Service where our Clients are treated with the utmost respect, professionalism and confidentiality as we progress through a short sale transaction.

MISSION STATEMENT:

1. To educate you, our clients, on the short sale process, the pros and cons of doing a short sale and making sure it is the right decision for you.
2. To aggressively list our clients' properties and generate an offer.
3. And finally but most importantly to successfully negotiate the short sale offer with the client’s lender(s).

SHORT SALE SUMMARY

For those who can't or do not want to keep the property and want to avoid foreclosure:

1. Short Sale is when lender agrees to accept less than full loan balance to sell property.
2. Anyone with a "qualifying hardship" can likely be helped by a short sale.
3. Hardship = loan adjusting up, loss of income, medical, divorce, death, or departure.
4. Credit Score: A Short Sale is less damaging than foreclosure to your credit score.
5. Allows for earlier market re-entry. 2 - 3 years vs significantly more for foreclosure.
6. The government likes short sales! Federal tax code and lending criteria benefit the short sale seller.
7. A Short Sale is a win-win-win for all parties involved! Check out Dave Ramsey's video from Good Morning America on the upper left.

To Qualify:

1. Property Type: Residential, Investment, Multi-Family, Commercial and Land
   • Property can be either a personal residence or investment property.
   • Commercial Property and Multi-Family units can be "short sold" too.
   • Unfinished construction, Lots and Improved / Unimproved land is eligible.

Be Very Cautious About...

• Short Sale agents & companies that are not experienced in this type of transaction and could cost you $$$ from poor negotiating of your settlement or unneccessary delays in processing time.
• Agents who do not understand lender charge off rules and how that affects negotiation.
• Someone who requests that you sign your title over to them and therefore you give up control of the property.
• Agents and companies that charge up front fees for their services.NOTE: Our fee for doing a short sale is the standard 6% realtor commission which is paid by the seller’s lender(s).

There are no upfront fees. We do not get paid if we do not successfully execute the short sale. Myrtle Beach Short Sale Service handles short sales on every type of property; houses, condos, townhouses, multi family, and lots.

Cost:

• NO COST to Homeowner
• Homes are sold in "as is" condition, with no repair credits paid by seller
• Lender pays for real estate commissions, past taxes, and certain other items
• All parties sign documents acknowleding that the lender will reduce loan balances to cover costs and fees

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How Debt Cancellation affects you...

The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for this relief. This provision applies to debt forgiven in 2007, 2008 or 2009. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if single or married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. The amount excluded from income reduces the taxpayer’s cost basis in the home. The basis of your hone is generally the cost of the home plus any improvements you made to it during the time you owned it less depreciation if applicable. Principal residence is the home in which you live and you may have only one main residence at a time. All other properties do not qualify.

The questions and answers, below, are based on the law prior to the passage of the Mortgage Forgiveness Debt Relief Act of 2007.

1. What is Cancellation of Debt?
   If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the canceled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt. Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.
2. Is Cancellation of Debt income always taxable?
   Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:
   1. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
   2. Insolvency: If you are insolvent when the debt is canceled, some or all of the canceled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Insolvency can be fairly complex to determine and the assistance of a tax professional is recommended if you believe you qualify for this exception.
   3. Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your canceled debt is generally not considered taxable income. The rules applicable to farmers are complex and the assistance of a tax professional is recommended if you believe you qualify for this exception.
   4. Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences, as discussed in Question 3 below.
3. I lost my home through foreclosure. Are there tax consequences?
   There are two possible consequences you must consider:
   1. Taxable cancellation of debt income. (Note: As stated above, cancellation of debt income is not taxable in the case of non-recourse loans.)
   2. A reportable gain from the disposition of the home (because foreclosures are treated like sales for tax purposes).(Note: Often some or all of the gain from the sale of a personal residence qualifies for exclusion from income.)
4. I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
   No. Losses from the sale or foreclosure of personal property are not deductible.
5. What form do use to report cancellation of debt or debt forgiveness reported to me on form 1099C?

You need to use IRS form 982 To report or exclude canceled debt income reported to you on 1099C forms by your lender or other financial institutions.

FORECLOSURE vs. DEED in LIEU

FORECLOSURE

Simply put a Foreclosure is when you "let the property go."

The foreclosure process as applied to residential mortgage loans is a ban or other secured creditor selling or repossessing a parcel of real property (house, condo, land, townhome, etc.) after the owner has failed to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that "the lender has foreclosed its mortgage or lien". If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgement.

Deed in Lieu

A Deed in Lieu is when you "give the property back."

A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower ) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.

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Questions about about the Myrtle Beach area or Myrtle Beach real estate markets? Don't hesitate to call John Lindstrand at 843-902-8980 or email or text message John now