House short sale/for sale by owner

[lastcall190]

Anyone here have experience with these? My parents house I don't believe will sell, I told them they could try a short sale, they have no idea what it is, I have little idea what it is, but from a quick google search I kind of understand it better. Still have a question though: Is this done through a realtor? As I understand, a short sale is an agreement with the lender to sell the house for less than the outstanding note. Right now my parents are "selling" for what they owe plus anticipated commissions due and lawyer fees. However they have gotten an offer for nearly what they owe, but that wouldn't include comms/fees.

Anyone sell a house by owner or be involved in a short sale in some shape or form? Thank you for your help. Had trouble wording the question so my apologies for the garbled mess. Figured I would highlight the actual questions in this mess.

-J

 

[Tylerc]

If you have an interested buyer then just talk to a real estate lawyer. They will charge extremely low commission and will do all the paperwork and title transfers.

 

[Screw-Rice]

Does this house need updating or repairs? Is there a decent split between what they're trying to get and what it would sell for in perfect condition? Are they selling due to financial reasons, or just ready for something else? Depending on these answers, you may have a few options.

 

[lastcall190]

Repairs needed, not to my knowledge. House is 100% inhabitable. Cosmetic/updating? Yes absolutely. Kitchen, bathrooms, wallpaper on 75% of the house, some mild landscaping, and (here's the big one) cedar shake siding that is in pretty piss poor shape and 1977 single pane windows. In perfect shape compared to local market it should have no issue. Original owners and while not updated my father did a good job maintaining the house (furnace, Central Air, fixed things when they broke, etc.) Financial reasons foremost, ancillary reason of wanting to be near their grandkids is close second (they might argue which is the main reason but I'm telling what I know). They will be going to an apartment rental after this.

Thanks for replies.

-J

 

[Phil'scobra]

I went through a short sell about 7 years ago. At the time I did not have to pay taxes on the amount of money that according to the US government considered fantom income. That would be the amount that is forgiven. Make sure this is still in place. Also I went through a realtor, The bank paid all the fees other than $1000.00 I had to pay, My credit went down 100 points, but since I had good credit it did not hurt that bad.

 

[verbal]

Original owners and the house was built in 1977? It sound s like they have a bunch of home equity loans on the property. If that is the case and there are multiple lenders they may have a hard time getting multiple lenders to agree to a short sale.

 

[lastcall190]

^^ They have never told me what the deal is but that's all I can think of is multiple home equity loans.

Didn't think about needing multiple lenders to agree. That information is helpful, thank you.

-J

 

[IronSnake]

I've always wondered/worried about the equity loans that you can take out on homes. It seems to be a slippery slope that creates these problems. Suppose a good heavy dose of conservative living would be the best bet to avoid it.

 

[lastcall190]

I don't disagree one bit.

 

[DHG1078]

How long has the house been on market?

 

[lastcall190]

Which two? Updates, yes it could use a lot from an aesthetic standpoint. Are walls falling down, roof caving in, pipes rotted? No. Just trying to understand what you mean and I will clarify.

Been on market on and off for about a year.

 

[Screw-Rice]

If they've owned it since 77 it should be paid off, so they may have multiple loans on it, which is a big issue. To really help, you need to know what they actually owe to everyone that has a lien position on the note.

 

[Screw-Rice]

Which two? Updates, yes it could use a lot from an aesthetic standpoint. Are walls falling down, roof caving in, pipes rotted? No. Just trying to understand what you mean and I will clarify.

Been on market on and off for about a year.

uninhabitable means it can't be lived in, lol.

typo

 

[lastcall190]

Whoops

Wait I thought uninhabitable was not able to be lived in?

Also yes it should be paid off and I would agree there are likely loads of loans on it.

 

[Screw-Rice]

Whoops

Wait I thought uninhabitable was not able to be lived in?

Typo on my reply. You said it's habitable but needs repairs. That can be a large variance, such as the siding falling off wouldn't really make it habitable.

 

[DHG1078]

I read it as UN-inhabitable when I skimmed your post.

What kind of flooring does the house have? How much will it cost to replace the siding on the house? How far below market is the house priced? Or is it priced in line with other houses? How quickly does it need to sell?

If they have a few months time, I would do cheap updating that makes a big difference. Remove the wall paper and put up a fresh coat of paint. Hardwood flooring? Have it refinished. If its not too costly and its in your budget, replace the siding on the house. Then when it looks more updated, pay someone to stage the house and do another open house.

 

[lastcall190]

Could've fooled me as I thought about which word I was supposed to use for about 10 minutes when writing the post!

Hardwood parkay floors downstairs with linoleum in the kitchen and some type of tile in the bathroom. Siding I believe he was quoted 7-10k, I can't recall. For the area I would say it's slightly below, though hard to tell because most of the houses I see that are updated within 10 years. In terms of how quick to sell? Hard to say. I would say they want to be gone within the year. My dad is retired but still works occasionally, though he wants to stop after this summer, as his eyesight is going and he's been through back/knee/hip surgeries and just can't be on his feet a bunch.

Thanks for the suggestions and I agree. I will talk to my dad and see what his plan is and what he might be able to do. Curb appeal would go a long way as right now, it's not fantastic.

-J

 

[ford fanatic]

We did a short sale with my wife's house last year, yes we had a realtor take care of everything.

All said and done we were responsible to pay tax on the amount of "forgiven" money on our taxes this year, that sucked but I'm glad it's over with.

 

[lastcall190]

We did a short sale with my wife's house last year, yes we had a realtor take care of everything.

All said and done we were responsible to pay tax on the amount of "forgiven" money on our taxes this year, that sucked but I'm glad it's over with.

Thanks. Yes I had read about the 1099-C for cancelled debt as well.

Glad you got it all behind you.

-J

 

[598]

If you are going to help your parents financially, weather directly or indirectly, you need to know what the real finances are. Do they have a ton of credit card debt? What are their total assets and liabilities? You may find yourself fixing one problem not knowing about the 5 underneath, and have wasted your time and money. If you are putting one 20k liability to rest, even by loan forgiveness, but they have more that you don't know about because they didn't want to bother you with it, no one wins but the creditors, and in my experience, the creditors helped your loved ones dig the hole they are in today. If they are over a certain age, like retirement age, I'd explore all credit forgiveness options, including bankruptcy.