Need possible short sale advice. Tampa Area (Orlando, Clearwater: short sales, real estate)

[Dan Diego]

Have a Tampa/Clearwater area rental that is underwater and I need to sort out all of my options. I live out of state and have very little experience or knowledge about the ramifications. I need to know what my options are. Sorry if this has already been covered elsewhere, I just signed up not long ago here. Thanks.

[debvic]

Originally Posted by Dan Diego

Have a Tampa/Clearwater area rental that is underwater and I need to sort out all of my options. I live out of state and have very little experience or knowledge about the ramifications. I need to know what my options are. Sorry if this has already been covered elsewhere, I just signed up not long ago here. Thanks.

You would benefit from talking to a Real Estate attorney. Too much at stake not to get professional advice.

[HWTechGuy]

I had a relative who did a short sale (in Pennsylvania). IRS is currently hounding them for taxes. They owed X on the house, sold it for Y. My understanding is that they are basically treating the difference as income and want a very significant amount of money.

That is just one reason the advice above is the answer you are looking for. There are ramifications, as you noted. Good luck.

[bentlebee]

You don't need a real estate lawyer unless you have money to the lawyer...

Any experienced realtor can do it since it is basically submitting papers to the lender ( correct paper work!!!!)

And than constantly following up. The negotiator at the bank will inform what else is needed and is e contact with the investor who is holding the mortgage note and behind the scenes it is all decided.

We always advise against buyers payingq for lawyers fees because the sellers agent is too lazy to do their job! We advice to look else where instead of wasting approx. $2000-$3000 for a lawyer for the seller who is just doing the same as any realtor, which is submitting the requested forms.

Any short sale needs to be listed with a realtor so you can skip the lawyer but not the realtor.

Keep in mind you need an experienced realtor for this.

We do short sales on a daily base and so do other realtors, some are more experienced than others and some lenders are easier to work with and some sellers are not willing to provide all the papers in a timely matter which is holding the short sale up for a long time...

Some sellers never provide the right papers and make the short sale not go any where and buyers get frustrated.

To close on a short sale successfully it requires all parties to work together and to get a buyer that is motivated and has proof of funds that are based on a possibility to close and not barely having a chance and than not getting the mortgage, so the entire process needs to be started over once approved!

[algia]

I think you're making a mistake. You should keep renting it and pay your mortgage. In the long run, you will have permanent income from that rental. I am still sorry we sold our house in Orlando, we could have kept it as a rental, and have had a good chunk of extra income now. (Live & learn)

Originally Posted by Dan Diego

Have a Tampa/Clearwater area rental that is underwater and I need to sort out all of my options. I live out of state and have very little experience or knowledge about the ramifications. I need to know what my options are. Sorry if this has already been covered elsewhere, I just signed up not long ago here. Thanks.

[rnedd]

Dan,

I'm a Certified Distressed Property Expert and work with people who are in your type of situation. There are several possible solutions but they will depend on your situation.

A short sale is one of the possible solutions but to qualify for a short sale you would need to show a financial hardship since you purchased the property such as loss of income, health problem, divorce, bankruptcy, etc. and be able to document it. You would also need to show insolvency which is that you don't have liquid assets that are adequate to cover your debts (meaning you don't have the cash in some type of account which could be used to pay off your mortgage or at least the shortfall between what you owe and what the property would sell for). You would also need to be able to show that you have a monthly shortfall between what your income and expenses are or that you will be in this situation in the near future (I have a client right now that is able to cover their monthly expenses currently but one of them is being relocated for work after the beginning of the year and with the added expenses of having 2 households they will have a monthly shortfall).

If you aren't able to document these points then it is likely the lender would not approve a short sale, but there might be other solutions that could apply.

I agree with the posters above that it would be smart for you to check with a professional regarding any ramifications to your credit, however, the credit ramifications of doing a short sale or one of the other possible solutions are almost always much better than just allowing a foreclosure to occur or 'walking away from' the property.

Since this is an income property rather than a primary residence, there would likely be tax ramifications regarding any amount forgiven by the lender(s) if you were to do a short sale and this is something that you should discuss with your accountant or a qualified and knowledgeable tax advisor or CPA. Realtors cannot and will not give legal or tax advice and can only advise on the possible options and which might be possibilities for you, so the other aspects should be checked into with the appropriate type of professional.

Moderator cut: self promoting website

I think it is smart that you are trying to determine what you should do rather than just walking away from the situation.

Sincerely,
Ron