Do I need to pay anything in a short sale transaction with the bank??

Answer 1

Let me clear the air for u.

The reason you MIGHT have to pay the difference is because your bank gave you the money for your house when you bought it, and now your just paying them back.

Since you didnt pay back the full amount but the gave you all that money when you bought your home the difference is considered "earned income". YOU WILL BE 1099 AND & MEANS YOU WILL PAY TAXES ON THE AMOUNT THE WRITE OFF.

Lets use an example:
Say your you owe 125,000.00 and you get an offer for 100,000. The net amount (after all fees are taken out(realtor fees, closing costs, etc,,) comes to say......90,000. You will be taxed for the difference. in this case u will be 1099 for 35,000.

To put this in prospective, lets say you gross 50k a year, well its like you made 85k that year (50k gross income + 35k difference). So the short sale is the way to go because the bank can 1099 for much more if it goes into foreclosure.

There are ways out of it! you might want to consult a CPA and claim insolvency, you could file bankruptcy.

You can always give your lender a call and ask them b4 u continue with your short sale.

Dont trust just any realtor! I have many realtors send me email or call me because every short sale is different. They mostly worry about getting their commission.

Feel free to send me an email if you need any other questions answered. I am also starting a new company to help people just like you for a very very low fee.

Take care.

Answer 2

even if your lender allows it, which is going to be doutbul you still have to even up with your lender. Failure to do so will most likely result in a deficiency judgment on you and if it is not collected or noncollectable they will notify the irs and you will have to pay income tax on that amount.

Answer 3

yes any amount that is left owing