The last quarter of the financial year saw a rapid increase in the number of short sales throughout the country, particularly in Las Vegas. The reasons for this increase are many and varied, but each of them is somehow related to the current economical situation and state of inflation that the market has been facing.
Though the signs of recovery are definitely on the horizon, it may take a while for home owners to get out of the clenches of massive mortgage debts and reduce the risk of losing their property. For now, a short sale seems to be the best bet for compensating a portion of the revenue and make way for a fresh start.
The Economical Boon
The Las Vegas Market rose to profitable heights in the past decade, attracting many potential buyers for property investment. The attractive rates at that time caused many people to lock into mortgages.
However, as the property values increased and mortgage rates elevated at a rapid pace, many homeowners failed to keep up with their payments, earning a defaulter status. In order to avoid the risks of foreclosure, short sales gained momentum and therefore the number of people opting for a short sale in order to get rid of the debt increased significantly.
Benefits for the Lenders
Foreclosing is a tiresome and lengthy procedure which proves to be a headache not only for the homeowner but also the lender. Foreclosing procedures often take too much time and money, causing the money lender major losses.
A short sale in the initial stages helps save time and revenue on their account, making it a win-win situation for all parties involved. Though a loss is still encountered, it is still more justifiable and reasonable than the losses encountered due to a foreclosure.
Therefore, a large number of lenders encourage the prospect of a short sale in situations where a foreclosure seems to be inevitable. Even home buyers are opting for short sold properties to make up for a profitable deal these days in Las Vegas.
The Mortgage Debt Relief Act on the Verge of Expiration
The Mortgage Debt Relief Act was set to expire at the end of December 2012, and this was also one of the major factors that had stimulated the number of short sales in the country during the past year. According to this act, anybody opting for a short sale will be exempted from the tax liability for the mortgage amount forgiven by the lender.
People who would have opted for a short sale after the expiry would have been entitled for thousands of dollars of taxes, making the short sale ineffective in the broader context. Thus, a lot of homeowners who felt that they would not be able to complete their mortgage payments went for a short sale in time to reduce the amount of financial loss.
Thankfully though, the mortgage debt relief act has been extended for one more year, and thus prospective home owners can breathe a sigh of relief. The number of short sales in the region continues to grow, but it is always a smart idea to take help from a short sales expert for expert advice and guidance in sealing the deal.
Paul Cook wrote this article about Las Vegas Short Sale on behalf of the geniuses over at Rothwell Gornt Homes.