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    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #1

    Jan 12, 2018, 08:35 AM
    Short Sale
    In a short sale on property, if the bank sells the property
    Comes of short of the amount owes, is the owner still have
    Responsibility for the balance?
    ma0641's Avatar
    ma0641 Posts: 15,681, Reputation: 1012
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    #2

    Jan 12, 2018, 11:11 AM
    Depends on the state. Some require absolving the debt, others do not. The money just doesn't disappear, in almost all cases, a 1099 will be issued for the difference in the sale. Let's say the short sale is $10K. The debtor will get a 1099 for the $10K.
    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #3

    Jan 12, 2018, 11:51 AM
    Great Information
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,277, Reputation: 7690
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    #4

    Jan 12, 2018, 03:59 PM
    If the bank sells the property is not really a short sell, the bank sells it for less than the loan amount. (this is normal after they forclose)

    A real short sell is when the owner sells it for less than the bank loan, with the bank agreeing, but the bank forgives the balance of the loan. (then that is an IRS issue since taxes will be owed on that forgiven amount)

    In this case, the property would have been forclosed on and bank took ownership. Then the bank sells, either at an auction or though a real estate company. Almost always this sells for less than the loan balance, since sell fees are added in.

    Almost all of those, the past owner will owe the balance of the money, it is in almost all of the loans.
    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #5

    Jan 12, 2018, 04:42 PM
    Very informative
    noseyrosey's Avatar
    noseyrosey Posts: 5, Reputation: 2
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    #6

    Apr 10, 2018, 08:52 AM
    It depends on your investor of your loan... such as if you have an FHA loan, you will NOT be responsible for the deficiency on the short sale.

    I work on short sales at a mortgage company, if you need more info, let me know.

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