Skip to comments.Short sale of home
Posted on 11/19/2011 8:39:56 AM PST by ChocChipCookie
Are there any other reasons for the short sale of a house besides being underwater, a foreclosure, or some other negative financial situation?
Bobby Reich is involved?
“Some other negative situation” covers just about everything.
I think, if it’s not your home, you’d want to short sale that too.
The house is majorly messed up somehow
Being underwater on your mortgage is NOT a reason to short sale unless you absolutely have to leave thev area for some reason. Everyone keeps complaining about being underwater on their homes, but it’s no reason to panic. Just live there, pay your mortgage and carry on. Don’t try to sell and your fine.
A friend of mine was just relocated from Phoenix to Chicago and their neighborhood had a major crash due to neighboring foreclosures so they were in a major short-sale situation.
Even if it’s a bit underwater, by paying down a mortgage, you’re still building equity.
“some other negative financial situation”
That one won’t hunt.
Underwater and foreclosure are about the only 2 things that will induce a lender to accept a short sale. Usually you have to have had the property up for sale for at least 3 mos before they will consider it.
No. If you can afford the payments, don’t do it.
I have read that some lenders are issuing 1099s (I think that’s the one)for the difference as income.
If I can get this correct. Say you bought your house for $200K had a loan of $175K but found yourself underwater now, and could only get $150K. the bank agrees to the short sale (they want to avoid foreclosure). When the deal is complete they give you a 1099 for $25K. (The 150 + 25 = loan amount.)
Also have read that not all banks are doing that form.
I bought a condo in a short sale . It took exactly one year from start to finish. If I had known, I probably would not have done it. I
My family was overrun in medical debt (despite having insurance) and we considered a short sale just to get out so we didn't foreclose. We figured it would be better in the long run to walk away with good credit and a chance to own again in the future than to have the black mark of a foreclosure on our record.
Thankfully, we were able to hang on. Took us years to pay off that debt, but we did - to the last penny, and kept our house and exceptional credit rating intact.
Sacrifice, sacrifice, sacrifice...worth it in the end.
The Current FReepathon Pays For The Current Quarters Expenses?
You need to move, and you cannot afford rent where you are going AND house payments and do not want to try long distance land lording.
Someone died and you need to clear the estate up as soon as possible.
We ask our clients, can you make the payment? We’re upside down on our beach-view condo, but we can make our payments and want to stay here the rest of our ives.
The feds and others have generated a lot of potential loan relief programs, like it or not.
As brokers, we always welcome listings, but the first question is can you stay there and make your payment? Second question, have you contacted your lender for a renovation?
There are papers on the net comparing short sales, with deed in lieu of, and foreclosures. Read those and call your customer service before you put your house up for sale.
The VA will let you get another loan after two years. Read about FHA and conventional loans and building credit.
Most lenders are not reporting unpaid balances as debt forgiveness to the IRS. There are laws prohibiting that if you sell before the end of next year. In Cal they even have a state law so no state income tax.
Don’t believe some anonymous guy on the internet. Search the net for debt forgiveness on loan balance or talk to your tax preparer.
You don’t walk away with good credit with a short sale, but you may be able to rebuild it sooner. Consult lenders. They will tell you what they are accepting in new applications from those who were foreclosed or did a short sale.
I’m not contemplating a short sale! I probably should have mentioned that. LOL
Today some neighbors of ours are moving out, and when we were researching the possibility of selling our house, comps and the like, their home came up as a short sale. There was never even a For Sale sign out front.
They’re a semi-retired couple, and I had them pegged as, “the millionaires next door,” due to a lucrative family business they’ve owned. They bought their house before we bought ours 8 years ago, so there’s no way they could be underwater, unless they took out a massive 2nd mortgage on the house. The houses in our neighborhood are holding steady at the value they were 6-7 years ago.
It’s just weird and unsettling to suddenly see a moving van out front.
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