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Great news for short sale sellers- Obama signs tax credit extension and expansion

Congress recently extended the 8000 first time homebuyers tax credit deadline from the end of November to buyers who sign contracts by the end of April 2010.  In addition to this buyers who have owned a home for atleast 5 years are eligible for a reduced tax credit of up to 6500.  The tax credits are 10% of the value of the home purchase or their respective amounts, which ever is less.

Today President Obama signed this into law.

What does this mean to sellers in a short sale situation?  It will likely not mean much in direct financial impact to a short sale seller however sellers will likely get a bit more for their houses in the months proceeding the deadline.  Ultimately the loss will not typically be coming out of the home owners pocket.  But with higher sales prices short sales are easier to negotiate.  Also if the house sells after the expiration date and prices drop afterwords, then  it might be harder to convince the bank that the value is 8000 less just because it is may instead of April.  A good time to sell would be starting now (especially if you have a very slow to short sale bank like Bank of America) and if you can’t start now, consider strongly trying to get your house in the market after the Holidays.   That will give you time to catch the post holiday market pickup as well as get people who are taking advantage of the tax credit and still give you time to endure a delayed short sale negotiation period and get it closed before the deadline.

If you are looking to short sale your house make sure you are working with an expert who has a sense of urgency to sell your house and get your debt foregiven.

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