Almost Half of Atlanta Home Sales in 2012 Have Been Georgia Short Sales, Foreclosures
The flood of foreclosure-related property sales predicted for 2012 by real estate experts seems to be well underway.
Of homes sold in Georgia during the first quarter of the year, a whopping 46 percent were either foreclosures or distress sales, according to recent data from RealtyTrac.
That's a 15 percent increase from the same period last year. In fact, the only states with worse rates were Nevada at 56 percent and California at 47 percent.
While the media tends to focus on foreclosures, distress sales refer to short sales and other arrangements in which a lender agrees to release the lien on a property in order to accept an offer for less than what the current homeowner owes.
Overall, the number of foreclosures has actually fallen while the number of short sales has increased. It's an indication that banks are ready to move homes quickly, say Atlanta bankruptcy lawyers.
Foreclosures can be expensive for lenders because banks must pay for legal fees and the upkeep of the properties. However, short sales allow banks to bypass many costs, which is why they're willing to accept lower amounts. Realtors also prefer short sales because they provide the opportunity to earn commissions.
But there's one group who may not benefit from distress sales: the homeowners the sales are supposed to help. Both foreclosures and short sales damage credit. But short sales often comes with unforeseen costs.
Unless otherwise directed, the IRS counts the value gap - or the difference between the amount a homeowner owed on their mortgage and the amount for which the home actually sold - as income. That means you could owe taxes on a home you don't even own anymore.
While foreclosures and short sales may seem like the easy way out, they sometimes come with new sets of financial problems.
Filing for Atlanta bankruptcy, on the other hand, can often solve the existing problems that caused a homeowner to become delinquent in the first place.
Many times, it's credit card debt and other obligations - not the fact that a house is worth less than what it was purchased for - that puts homeowners on the path to foreclosure, short sales, or deeds in lieu of foreclosure.
Chapter 13 bankruptcy has the power to stop foreclosure and allow borrowers to work out an affordable repayment plan. For those who qualify for Chapter 7 bankruptcy, debt may be eliminated completely.
Discussing your situation with an experienced attorney can help you make the right decision for your family's finances in the long run.
More Blog Entries:
Foreclosure Sales, Distress Sales Up in Georgia, by Christopher Quinn, The Atlanta Journal-Constitution