Manage episode 152363560 series 1058001
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I'd like to take this time to elaborate on some recent events in the Chester County real estate market that may impact your clients in the near future.
Some different organizations around the country have been alerting us to the fact that many lenders over the last year have been sending deed in lieu of foreclosure packages directly to homeowners that have not been including a satisfaction of the deficient balance.
If you have clients that are considering a deed in lieu of foreclosure, I have two things you should know:
1. Carefully read the documents: Make sure it specifically states that the deficient balance will be forgiven and that they will not pursue their right to collect that deficient balance.
2. Deed in Lieu of Foreclosure is treated as a foreclosure by credit bureaus: When your clients apply for a loan in the future they'll have the same waiting and seasoning period as they would if they had a foreclosure in the past. This is why a short sale may work, but this is not always the case.
Mortgage Debt Forgiveness Relief Act
At the end of 2014, Congress extended the Mortgage Debt Forgiveness Relief Act. If you have clients that completed a deed in lieu of foreclosure, a short sale, or a foreclosure and received a 1099 for the deficient balance, then this may not be a taxable event if it was their primary residence and they settled the issue in 2014.
The good news is that we're hearing whispers from Congress that this act will also be extended into 2015. So, if you have any clients that would be impacted by this development, we urge you to inform them as soon as possible. If you have any further questions about this, please don't hesitate to contact me, I have much more information on this subject.
Quick Real Estate Market Update for Chester County
It's been a tumultuous year in real estate for the Philadelphia area, and with 2014 now on the back burner, I'd like to give you a brief recap of what happened with our local market.
- Inventory Accumulation: At the end of 2014, Philadelphia had 5.7 months of inventory, indicating a balanced market. Year to year, there are more homes on the market now than in 2014.
- There were 5-8% more homes under contract in 2014 in Chester County than there were in 2013.
- The number of sold units was down in 2014. This could be a result of the weather from last January-March, but the third and fourth quarters of the year picked up the steam nicely and should help us in 2015.
- On average, the sales price increased by 3.8% in Chester County, which is helping to stabilize the market and allow sellers to get out of their homes while the market appreciates.
It's hard to say what will happen in 2015, but a lot of it will depend on our inventory in the next 60 days. We've seen lots of activity and aggressive offers throughout the holidays, which indicates a very strong first quarter for 2015. Prices should continue to increase, days on market will decrease, and this will create a healthy and balanced market for the Philadelphia area.
As always, thank you for your referrals. We greatly appreciate doing business with you. If there is ever anything we can do to help you, or if you have any questions about any of the topics covered, be sure to contact us by phone or email.