Tanya asked:
I have a home I want to sell that is facing foreclosure. An investor wants to buy it for less than I owe. What happens to the diff between his offer and what I owe? Can I quick claim it to him for a profit?
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Saturday, December 26th, 2009 at 3:06 pm
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December 29th, 2009 at 12:41 pm
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Profit is not going to be made on this sale. You MIGHT get the lender to do a short sale (take less than owed) but no lender will do a short sale and let you make a profit on the sale.
December 29th, 2009 at 4:19 pm
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Why don’t you just put it up for sell on the open Market? A realtor will help you set the price for the area and it’s sure to be more than what you bought it for unless you have let it go and it’s a dump. Why did you wait until it’s about to go into foreclosure?
January 1st, 2010 at 4:57 am
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Of course you cannot do that. If you sell for less than you owe, you will need the permission of the lender involved. This is commonly termed a ’short sale’. The decision on whether to hold you responsible for the shortfall is the lender’s to make.
Do not do anything about selling this house without the express permission of the lender, unless you somehow find a buyer who will pay you AT LEAST what you owe, or more.
January 3rd, 2010 at 10:43 am
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Your house isnt prolly worth what you owe. Most places in the USA are like this since the housing market is so terrible and lots of homes for sale. Your not going to make a profit. If you do a short sale, the bank is accepting less then what is owed so therefore the bank is losing X amount of dollars so you wont be making a profit. If the bank accepts a short sale, then the money they were screwed out of, they cant go after you for it because they agreed to the short sale.
The ONLY possible way to make a profit is if your house sold at sheriff sale at 20k and your house is worth 100k. Then you could sell your house for 100k and BY LAW, you only owe the bank 20k so youde walk away with 80k but thats highly unlikely. You’ll have both your lender and the lenders lawyers at the sheriff auction bidding against eachother to make sure the sheriff sale is at the amount you owe.
Lets say you owe 100k and the bank takes that property. 6 months later, they sell your home for 75k. The bank just lost 25k on that deal so what happens? In order for the bank to write it off, the IRS will be coming after you for the remaining amount of money because that 25k was a profit to you because you didnt pay the lender back that money. You’ll be paying taxes on that 25k and the bank will go after you for that 25k so youll be screwed if you dont do a short sale and catch back up on payments.
January 6th, 2010 at 3:11 pm
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No to the quick claim! Sorry. Too easy and you have lender obligations! So there are only 4 ways to solve the issue:
1. Talk to the lender
a. Lender may let you pay a part of what you are behind and take the rest over a couple of months.
b. Lender may let you renegotiate the entire mortgage and interest rate.
c. Lender may agree to “shortsale” You sell they take less-there may be tax (IRS)impact seek counsel!
d. Lender may agree to “Deed in Lieu” Lender takes the property back and forgives the mortgage. See C for tax impact! Seek Counsel.
Best advice-If investor wants the house talk to lender.
IF investor doesn’t want the house-talk to the lender-loss mit department! Good Luck!
January 8th, 2010 at 5:06 pm
sell my home
You can only sell for a profit if you receive an offer to purchase the property that would result in a profit to you.
The difference in this deal would have to be paid out of your pocket at closing. Or, you could try to convince the bank to accept a short sale and forgive the difference, which means you wouldn’t owe it at closing.
Quit claiming the deed to the investor would not help, as that would only transfer the ownership of the property to him. In fact, it would probably hurt, as your mortgage’s “Due On Sale” clause would become applicable, making the entire mortgage due immediately upon transferring the deed.
January 11th, 2010 at 11:34 pm
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Unfortunately no. You can’t profit on your home going into foreclosure. i’m sure your lender would prefer it not go into foreclosure, especially if you owe more than it’s worth. Do everything possible to hold onto the property even if you have to take on a renter or get a second job, the devastation you will cause over the next 8 years will not be worth it.
January 12th, 2010 at 6:39 pm
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how do you make a profit if he’s offering to buy it for less than you owe? – you would still owe the mortgage company the difference and they may not let the sale go thru as a result