Well,
Lets see what the verdict is for a typical situation.
Home is worth 135k
Loan balance and deliquency payoff is around 133k.
Short Sale verbally accepted at 111k
Home owner wants 5k under the table.
I offered 3k and he is not happy.
Would you offer the 5k or walk away?
What would be a reasonable offer given that there is no
equity to begin with and the homeowner is a useless dud
who is alcholic, jobless. The man is on the deed and not on
the loan. The lady wants out since she is the sole one on
the mortgage. He is holding the deal up trying to extort.
To add its a divorce situation.
Let’s see, you are dealing with the bank for the short sale right? Screw the loser homeowner. If the bank already accepted the verbal offer of 111k. Get it in writing. If the divorce is not final yet they both will have to sign off on the deed or face foreclosure process. Just from personal experience never bargain with an alcoholic, their word is useless. That is a sticky situation. Maybe the wife could speak with her divorce attorney to see how she could solve the problem with getting him off the deed. Graciez
Thanks for the input.
I never want back to the man to renegotiate. I was silent for
2 days and he called back asking for another $500 more.
I just threw it in and agreed to the deal.
Just found that the property is worth much more than what i
initially thought it was a couple of months ago when i started
the SS process.
I am turning this to a rental and will cash flow positive.
Do what you want, but personally I’d never do anything “under the table” when dealing with REI deals.
Not only are you violating the law and your short sale agreement (no money to the homeowner), you are also responsible for taxes on $5K which you don’t have. You’ll also have a $5K expense that you can’t deduct.
Personally, I’d given him $500-1000 for the furniture or something, asked for a thank you for saving my credit or I would have moved on.
Raj,
After having given the idea some thought, the plan is to send
the man a 1099 for the money we offer. It will just not be
reflected on the Hud-1. At 30% tax savings, it will be close to
1K for us and since he is unemployed, it won’t impact his tax
liability in a big way.
Most likely, i will tag it as an expense on another property
that i am currently working on a SS and will be acquiring
either way. Will tag him as a painter or landscaper.
Will need to run it by the CPA today.