[TimTam1]

Here's the situation. My attorney said that I should stop my short-sale process. We are in the process now of going BK. Unfortuantely the real estate sales person always has a buyer lined up to purchase the house. Also the bank last Friday approved the short-sale. If I back out of this as the attorney is advising me, can the real estate company and bank sue me???

Confused..........

[Scott456]

why not ask your attorney? read through all the papers you have signed or bring them to your attorney.
do not trust your real estate agent. It is in his/her own interest to sell your house so he/she can make money.

[lvoc]

Originally Posted by Scott456

why not ask your attorney?
do not trust your real estate agent. It is in his/her own interest to sell your house so he/she can make money.

But trust the lawyer who may make much more money depending on how the home is handled? I would trust both agents or neither...can't have it both ways. If standard GLVAR forms are used the seller and buyer must approve the banks approval letter. Don't..

[tbill618]

Originally Posted by TimTam1

Here's the situation. My attorney said that I should stop my short-sale process. We are in the process now of going BK. Unfortuantely the real estate sales person always has a buyer lined up to purchase the house. Also the bank last Friday approved the short-sale. If I back out of this as the attorney is advising me, can the real estate company and bank sue me???

Confused..........

If you don't mind, why does your attorney advise stopping the process?

[TimTam1]

Originally Posted by tbill618

If you don't mind, why does your attorney advise stopping the process?

Yes to avoid the 1099. I explained that I should fall under the Debt Forgiveness Act. The house was our primary from 2003 to 2009. Then we rented it out.

[macgeek]

I Think you should sell the house, as promised.
If you owe people money, and you can pay off some of your debt in the short sale, then you should man up
and sell.

Filing for bankruptcy is not a privilege.

Jonathan

[lvoc]

Originally Posted by TimTam1

Yes to avoid the 1099. I explained that I should fall under the Debt Forgiveness Act. The house was our primary from 2003 to 2009. Then we rented it out.

Ohhh ny...that is 2 out 5 year rule. So when in 2009? Can you move back in for a few months? Nah that does not work...too late. I would vote to go with the lawyer. But learn a lot Many of them don't understand this stuff either.

[WestieJeff]

I agree with lvoc, depending on when you started renting out the house, you probably/may not fall under the debt forgiveness exemption as I understand it.

You should be able to reject the banks approval. If your estimated closing date on the original offer would have put you in a timeline that would have been acceptable tax wise, then I'd say it's pretty cut and dry, if the approval sets the estimated closing date after your "ok" date tax wise, well that's not your fault the buyer's knew that was a potential issue.

If you signed an offer with an estimated closing date that was no good (tax wise), that's failure to do your own due diligence. Likely you can still legally get out of the offer, but as a buyer if I knew all the details, I might rake you over the coals in this case.

Buyers should know short sales are not solid deals. Hopefully they haven't seen the approval letter yet. I'd communicate it to the buyer as something along the lines of, bank provided approval but seller didn't agree to terms and leave it at that.

This is one case where I actually think, if you're willing to file bankruptcy, you deserve to get out of your house. I've seen way too many people buy and bail and their credit is 700+ in two years. That's not OK in my book. But a bankruptcy will put a big dent in your financial future and obviously you're in dire straits if you're considering that.

[TimTam1]

Originally Posted by WestieJeff

I agree with lvoc, depending on when you started renting out the house, you probably/may not fall under the debt forgiveness exemption as I understand it.

You should be able to reject the banks approval. If your estimated closing date on the original offer would have put you in a timeline that would have been acceptable tax wise, then I'd say it's pretty cut and dry, if the approval sets the estimated closing date after your "ok" date tax wise, well that's not your fault the buyer's knew that was a potential issue.

If you signed an offer with an estimated closing date that was no good (tax wise), that's failure to do your own due diligence. Likely you can still legally get out of the offer, but as a buyer if I knew all the details, I might rake you over the coals in this case.

Buyers should know short sales are not solid deals. Hopefully they haven't seen the approval letter yet. I'd communicate it to the buyer as something along the lines of, bank provided approval but seller didn't agree to terms and leave it at that.

This is one case where I actually think, if you're willing to file bankruptcy, you deserve to get out of your house. I've seen way too many people buy and bail and their credit is 700+ in two years. That's not OK in my book. But a bankruptcy will put a big dent in your financial future and obviously you're in dire straits if you're considering that.

Problem is that my agent didn't fully explained the Debt Relief Act. He said I would qualify with no problems. When I did my math, I am short 3 months. The bank has sent a approval letter already. Is it too late to back out without getting sued from the mortage company and the real estate company.

[WestieJeff]

Your bank won't sue you, they don't care. Your agent and the buyer could in theory maybe sue you, but like lvoc said, if you used the GLVAR standard short sale forms, you should be covered legally and able to exit the deal.

Besides, nobody is going to want to sue someone who is filing bankruptcy. It's not free to sue someone and the likelyhood of getting any money from you is nearly zero.

Originally Posted by TimTam1

Problem is that my agent didn't fully explained the Debt Relief Act. He said I would qualify with no problems. When I did my math, I am short 3 months. The bank has sent a approval letter already. Is it too late to back out without getting sued from the mortage company and the real estate company.