After three months of working the short sale, it got approved for a disount and I managed to sell the property for a profit.
Now, since I prevented a foreclosure on the homeowner’s credit, what is the next step for them? What do they need to do after this is said and done? Do they need to report that that they sold their house? Or does this not concern me at all?
Depends on the banks reply to you. Did they agree to waive the deficiencies? IF that is not in their reply to you, they may 1099 the difference to the HO. But if they have a good cpa, they should be able t avid it.
What is the best way to find out of they waive the deficienes?
Also, would this apply to the 1st or the 2nd?
I am new but i’ll tell you the answers i’ve come across.
I have heard that they can do only one of two things. They can go after the HO for the diffence (deficiency judgement) or they can send a 1099 to the HO. But they cant do both? (like i said i dont know this for sure, just passing info on)
So if the bank waived their right to a deficiency (which i always put in my contract) then they will send the 1099> I have been told that there is no getting around the whole 1099 thing in this scenerio.
So if they do go after the difference then their will not be a 1099 issued because they are going to get the difference.
I hope this is all right, but if not i will definetely be reading this discussion to find out.
So basically your HO could have to pay tax gains from the 1099.
And i’m not sure what “if they have a good accountant they shouldnt have to” means. Please tell me, this sounds great.
Baldyguy,
When the bank accepted the shortsale, it should have been somewhere in it unless you didnt ask for it. GO over you offer letter to the bank. Did you ask for it? If so, then it should be stated in the acceptance letter from the bank. Do you know what an acceptance letter is? If you are not sure, can you post it without including certain personal info.