Short Sale, Deficiency And Cash To Seller

Short Sale, Deficiency and Cash to seller

Thanks for all replies



How does one short a 2nd mortgage and then pay the seller some cash?

This is a pretty house and the seller deserves some cash outside of the deal.

Can It be done legally and still have a zero for the seller on the HUD-1?



One Idea I have, the seller needs a used car, about 5k I would buy for them?



Deficiency:

I always ask the 2nd mortgage lender state in my short offer acceptance letter that they WILL NOT seek a deficiency judgment from the seller for the difference. If the lender agrees to the short with no deficiency will the seller still get a 1099 for the difference?

Comments(8)

  • dsREI25th February, 2007

    SS Pro
    Thanks
    How about any cash to the seller?
    Is it possible?

  • topbro1st March, 2007

    Why not just fill out a Bill of Sale for several items in the house equal to the amount you are offering the Homeowner. I usually pay for appliances and such that are not mandatory in purchasing a home. Just food for thought

  • dsREI1st March, 2007

    Yes, Bill of Sale is the best way to go.
    That is totally seperate from the closing docs

  • dsREI10th March, 2007

    Chris,
    Thanks
    Why is Deficiency a factor?

    Because the Sellers Accountant told him that if the lender seeks a deficiency judgment he MIGHT get a 1099 for the difference of the short offer I made, In this case would be 41k
    Short offer: 10k
    2nd mtg: 51k
    So 41k might be considered income to the seller if we do the deal?

  • dsREI21st March, 2007

    SS Pro,
    Thank You for clearing this up, very precise answer

  • mcole26th March, 2007

    If it were me, I would definitely have an attorney to protect my interests.

  • smithj226th March, 2007

    I would contact the legal department of the bank that did the foreclosure. If the former owner is challenging the foreclosure as a wrongful foreclosure, then you can be sure they will go after the deep pockets. It would most likely be in their interest to help you defend this case.

    JS.

  • BercoGroup26th March, 2007

    Yes, she can challlenge the foreclosure sale.

    Yes, If the outcome will affect you financially, I strongly suggest you bring an attorney.

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