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I just sold my place for HALF of what I paid for it in 2006 and I dont owe anything to the taxman or bank.
I did not even realize that I had this option, a short sale, until doing some searches and research online. Yeah, it hurt my credit but it wasn't worth paying twice the amount of my mortgage that my new neighbor was paying... for the next 27 years nonetheless! Anyway, my credit will rebound in a couple of years and I'm all good. Plus, I didnt even pay my mortgage and prop taxes for 8 months and walked away with a nice nest egg.
I'm renting for now because I just moved for work. I wouldn't want to buy anyway right now with prices still dropping and foreclosures going up.
My Realtor was awesome and my deal went smoothly but I hear stories of long escrows because banks are backed up.
Anyone else have good or bad experiences with short sales in Los Angeles?
I just sold my place for HALF of what I paid for it in 2006
I dont owe anything to the taxman or bank.
I didnt even pay my mortgage and prop taxes for 8 months
walked away with a nice nest egg.
Unless I am missing something here either 1) you lost a lot of equity, or 2) your lender didn't get paid for money loaned to you or 3) some combination of 1 and 2.
Am I missing something?
Who is footing the bill for the money not paid to the lender (if that is the case)?
Who ended up paying the property taxes?
I purchased for $500K, it sold for $265K. I never really had equity because I had a 100% loan 80/20.
The difference in sales price is being written off as a loss by the lender. I do not need to pay taxes on the difference. A 1099 will be sent to the IRS for the difference but since it was my principal residence, not an income property, the tax man ignores it. This law was enacted during the Bush admin, I believe.
The property taxes are paid my the my lender at closing. Same would be true of HOA dues. I am pretty well educated on this subject now because my Realtor was really good and explained the process and my options.
Last edited by Green Irish Eyes; 08-17-2009 at 02:47 PM..
Reason: NO realtor links OR recommendations, per the T.O.S. -- thanks.
You are out raving that you got to short sale your house and got to save a bunch of money saved up because you didn't have to pay your mortgage? So you were fully able to pay your mortgage the whole time, but lied about your income?
I can understand if there is job loss, medical problems, etc.., but this is rediculous, you signed a contract and could afford it anyway.
Moderator cut: personal - off topic
You are out raving that you got to short sale your house and got to save a bunch of money saved up because you didn't have to pay your mortgage? So you were fully able to pay your mortgage the whole time, but lied about your income?
I can understand if there is job loss, medical problems, etc.., but this is rediculous, you signed a contract and could afford it anyway.
You have no idea what my financial state is, was, and will be. You have no idea what I put on my loan docs.
The rise in real estate values was a fraud, not perpetrated by the buyers, but by the banks and gov't who pushed the country into homeownership.
I wouldn't brag too much about it because we all paid for it. I am glad you got out of a troubling financial situation but there is no money fairy. It is all of us.
I wouldn't brag too much about it because we all paid for it. I am glad you got out of a troubling financial situation but there is no money fairy. It is all of us.
You paid for it? Really?
Real estate values were and still are artificially high. Until the market corrects itself, by dropping home values, and the average joe getting out from under his under water property, we will not recover unless another bubble keeps values artificially high.
Real estate values should equal a multiple of income. They are still no where near where they should be. A short sale or foreclosure does not hurt the economy, it is putting back on track so that a true equilibrium is reached where buyers want to keep paying their mortgage, maintain their property, use it slowly build equity and be able to enter the real estate market.
You have no idea what my financial state is, was, and will be. You have no idea what I put on my loan docs.
The rise in real estate values was a fraud, not perpetrated by the buyers, but by the banks and gov't who pushed the country into homeownership.
Moderator cut: personal - off topic
I have a condo that is underwater, but you don't see me short selling it. I signed a contract, I live up to my word when I signed that paper.
Well I lost $137k real cash (principal plus real estate comissiom) selling my home last month.
I make too much money (according to Obama)
So I am responsible and get screwed and Obama and the govt wants to screw me more buy raising my taxes even more?
But the OP is bragging about having his short sale tax implication waived? OP must not be in the same 35% tax bracket or just games the system.
That's why I always state that the more govt interferes with housing, the worst it makes the housing conditions. Plus there are millions of homewoners like th OP who put zero down and get to have ther 1099 waived.
Congress is so stupid. When they passed that bill in dec 2007 (mortgage foregiveness act) they should have excluded those ho did zero down.
Let's face it people with zero down are playing with house money these days. They had no skin in the game so they can do a calculated foreclosure if they wanted to.
Honestly and this is a question for the OP. If you knew you would get a 1099 at the end if the year and would have to pay taxes onthe amount shorted, would you have short sold your house? Probably not. But you would have just walked away and let the home go into foreclosure. So you win both ways.
The sad thing is that there are millions of homeowners (I mean glorified renters) like the OP who are gaming the system.
People who had 100% loans have nothing to loose and they shouldn't have been in the housing market anyway. I suspect if you ever want to buy property again it's going to play out a little different.
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