Not sure if this the correct forum, so I apologize in advance…
I have a client that is behind on payments, due to the bank that holds the mortgage, she can get a short-sale but that will leave her with a potentially high tax burden…
One of my potential buyers thinks that a quit claim would be the best route for her.
I am not sure since Georgia law is a real pain. Anyone got any advice on this?
Any help for a relative noob is appreciated…
I am confused. What will a quit claim solve? There will still be a mortgage and there will still be tax reprocussions.
Also please read the message i posted up about 1099s a day or two ago explaining in some detail how the tax reprocussions work. Might not be as bad as you think.
RDR,
The grantee will take over payments and rent the house out to make his payments.
The taxes are up to date on this house, so no back taxes. Just the past due mortgage.
For the client, she will be able to walk away from a mortgage that she can’t afford.
The grantee might be able to re-fi within 6 months to 1 year…if he can find a bank that deals with non-seasoned property.
Thats tough. What would you be getting out of the deal. The problem would lie if the buyer were to NOT make the payments they are supposed to. I couldn’t see them doing anything to you depending how you structured it but it could become a rough situation if that were to happen.
RDR,
Might be able to squeeze a couple grand out of this. Not promised from the buyer. I just want to make sure that the buyer doesn’t squeeze the seller by not making payments.
I didn’t see your post on 1099s regarding the tax implication.
Check out here:
http://experts.about.com/q/Tax-Law-Questions-932/Short-Sale-Home.htm
and
hmm, can’t find my second link, I thought I had two posts up. But check that one out, explains briefly a way to lower tax implications.
Chase
Just of curiosity, did you consider putting the property into a Illinois type land trust? That way, all parties are protected. You also have to watch for equity skimming if the buyer for some reason didn’t make the payments to the mortgage company.