I want to sell my home short. Then buy it back.

Location: Washington State. Rural location. 20 acres, zoning allows dividable in half. I’ve lived here 8 years and am well employed. Owe $520K on current market value of $320K (maybe).

I have asked several agents to do Comparable Market analysis. No comparable sales.

I want to take advantage of the Obama forgiveness of Income Tax on the forgiven debt when one sells an Owner Occupied home short.

Am willing to buy back in the near future at a markup. I believe a S/S could be done at about $295-$325K. Maybe a Lease Option for a couple years till my credit is repaired.


if someone bought the property thru short sale at $295,000…that is like 90 - 100% ov FMV…

I don’t that is a realistic approach to a deal

if you are well employed…why not just continue to make the payments?

You’ll have to find an intelligent short sale investor, NOT your typical real estate agent…

If the FMV is $295k, then the short sale should be much lower.

The investor will have to agree to do the short sale, then sell it back to YOUR close friend or family member. The bank won’t allow a short sale to be sold back to you directly.

Also, something to explore would be the principle reduction programs that are available now. I don’t know much about them, maybe someone else chime in…

The bank won’t allow it, and if you work around the rules, you are commiting bank fraud.

Real estate prices go up, they go down, they go up again. Then they repeat the same cycle over and over. Just kept making your payments and that land will go back up in value and you will be just fine.

Obama has announced a new bank program where banks forgive part of the debt and reduce the interest for homeowners who are current and have good credit. I can’t imagine why the banks would do it, since there is nothing in it for them, but hey, keep making those payments, and maybe you’ll be eligible for that program.

You likd the land when you bought it. What? You don’t like it any more? It doesn’t matter what the market value is when you don’t sell. Market value flucuates steeply, even more so in the PNW and on agricultural land. Just hang in there.

Thanks for responding to my post.

As I search thru the various categories of Realestate dealings on this REI blog, one thing that seems common is that every investor needs an exit strategy.

It occurs to me that there are millions of upside down homeowners in this country. Most of them would be the “best” purchasor of the home they occupy, willing to pay a premium in order to be relieved of the current mortgage and paying a lower one…as opposed to just Walking Away and Renting the house across the street for half the amount. Current occupants are a built in exit strategy when they want to remain in the home and have income. Nobody in the free market would pay more.

I remember a tax dodge that was common back in the 70’s and 80’s where unrelated folks were able to write off the college tuition of a nonrelated student but not the tuition of thier own childern, so folks, especially those in the educational industry were making deals to pay each others’ childrens tuition…
(Likewise, I think we should all be buying each others homes at a deep discount and renting them back to each other.)…


My estimate of Fair Market Value is $360- 400K …after a year on the market. But I suspect that the lender would accept much lower because nothing is selling around here,…

Having someone not related to you buy the short sale and then maybe selling it to you after your credit is improved is not illegal.

How can a previous bank tell a new owner what to do a year from now?

Especially since it will take this time, if not longer, for you to repair your credit.

There is no law that states once a seller sells his home he cannot repurchase it at a later time.

The previous bank will not, however, allow you or someone you are related to to purchase the short sale.