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Old 10-17-2007, 05:56 PM
 
1 posts, read 8,937 times
Reputation: 12

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Hi:

I am in dire straits with my home and now owe more than the property value. I was told I need to find a realtor to do a short sale. Does anyone know who can help me, or what I should do?

Any assistance is greatly appreciates.

Yours
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Old 10-17-2007, 07:08 PM
 
2,755 posts, read 11,765,609 times
Reputation: 1464
I know that this seems bad, but you're actually fortunate to be able to do the short sale. The bank is doing you a favor: They're willing to forgive you your debt and leave your credit alone in exchange for some help in selling the home. It's a deal you should take up.

Realtors can better answer your question, but the key for you is to find a realtor who will work with your short sale. It's of course in your best interest to see the sale go through, so best find a realtor that you think will work hard in marketing your home for sale.

Your realtor will market the home as they normally would, but the only difference is that the bank has to evaluate any offers that you would receive. If you receive an offer that the bank accepts, then the house is sold, the difference between the amount you owe and the price is forgiven, and the realtor is paid. You escape from a bad situation with your credit intact and not losing any additional money than you already have.

Of course, if you don't get any offers or you get offers not to the banks' liking, eventually they'll probably proceed with foreclosure. So, as I said, it's in your best interest to make your home as attractive to the buyer as possible.
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Old 10-17-2007, 09:33 PM
 
Location: Just south of Denver since 1989
10,914 posts, read 29,404,684 times
Reputation: 7144
Find a local Realtor. They either know how to help you or know someone in their office who can.

You can DM me for a referral, if you want.
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Old 10-17-2007, 11:01 PM
 
2,652 posts, read 7,801,187 times
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If you are behind on payments, you will soon be getting postcards in the mail from investors wanting to help you through a short sale. If you go that route, be sure to screen them to make sure they can see it through to the end. Lots of those are newbie investors who have never done a deal. I doubt if you want to risk being their guienia pig.

Also, if you do a short sale, you will be taxed on the portion the bank forgave. They consider forgivable debt to be taxable. So if you owe $200,000, and you sell it on a short sale for $130,000, you will be taxed on $70,000. I know it sucks but it's the way it is. You can try to convince the bank to give you some form or something that allows you not to be taxed. It's worth a phonecall.

The best thing for you to do is talk to the bank. The absolute WORST thing you can do is not talk to them. DON'T IGNORE THEM. The bank doesn't want to foreclose on your house. Try to get them to negotiate whatever it is you are having trouble with. I am going to assume you got one of those ARM loans, and it has readjusted to a very high rate making it unaffordable.

CALL THEM. See if you can negotiate a lower interest rate, and a lower price owed on it. The bank does not want your house, but they WILL take it if you do nothing.
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Old 10-18-2007, 07:36 AM
 
Location: Just south of Denver since 1989
10,914 posts, read 29,404,684 times
Reputation: 7144
The lender may or may not 1099 you for the shortfall.

Be aware that the way foreclosures are handled in Colorado will change on January 1, 2008.
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Old 10-18-2007, 12:04 PM
 
136 posts, read 682,281 times
Reputation: 37
Quote:
Originally Posted by Luke9686 View Post
If you are behind on payments, you will soon be getting postcards in the mail from investors wanting to help you through a short sale. If you go that route, be sure to screen them to make sure they can see it through to the end. Lots of those are newbie investors who have never done a deal. I doubt if you want to risk being their guienia pig.

Also, if you do a short sale, you will be taxed on the portion the bank forgave. They consider forgivable debt to be taxable. So if you owe $200,000, and you sell it on a short sale for $130,000, you will be taxed on $70,000. I know it sucks but it's the way it is. You can try to convince the bank to give you some form or something that allows you not to be taxed. It's worth a phonecall.

The best thing for you to do is talk to the bank. The absolute WORST thing you can do is not talk to them. DON'T IGNORE THEM. The bank doesn't want to foreclose on your house. Try to get them to negotiate whatever it is you are having trouble with. I am going to assume you got one of those ARM loans, and it has readjusted to a very high rate making it unaffordable.

CALL THEM. See if you can negotiate a lower interest rate, and a lower price owed on it. The bank does not want your house, but they WILL take it if you do nothing.
Very good info, Luke. I didn't know the meaning of "short sale" before.
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Old 10-18-2007, 09:47 PM
 
Location: Colorado, Denver Metro Area
1,048 posts, read 3,986,248 times
Reputation: 397
Quote:
Originally Posted by 2bindenver View Post
The lender may or may not 1099 you for the shortfall.

Be aware that the way foreclosures are handled in Colorado will change on January 1, 2008.
I believe they have to by law to do a 1099-C for any amount over $600. It is NOT Always taxable, however. Seeking a tax professional is a must in this case as this would involve a fair bit of work, research and some of such forms have to be done by hand (I had to do it once for someone).
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Old 10-18-2007, 09:57 PM
 
2,652 posts, read 7,801,187 times
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I agree. Make sure you talk to a tax professional who specializes in real estate. I want to say again the worse thing you can do is nothing. Talk to the bank ASAP.
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Old 10-18-2007, 10:20 PM
 
Location: South of Denver
291 posts, read 1,919,927 times
Reputation: 150
How short are you? Do you have a 2nd? You may want to talk to an R.E. investor. They won't need to pay an agent and you might get a more acceptable offer to present to the lender. Look for ads in the paper or places like HomeVestors - We Buy Ugly Houses..
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Old 10-21-2007, 03:30 PM
 
1 posts, read 8,781 times
Reputation: 10
Default Short Sale

We were in the same situation last year and we used a company called Premier Short Sales. They were very easy to work with, they helped us avoid the tax issues and even paid our moving expenses. I don't have their phone number, but their website is Home

Last edited by Eric Boswell; 10-21-2007 at 03:33 PM.. Reason: Link wasn't showing
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