We've had a house for sale for five years. We haven't lived in the house for all but one month that it's been on the market.
This past August, we began the paperwork to get approved for a short sale. The mortgage company has made the process as slow as they can. We send in paperwork, and they wait three or four weeks to get back to us only to tell us that we need to send in more paperwork. We didn't have an offer when we began this process. Our hope was to get ahead on the process, so that when there was an offer, it the short sale approval could be expedited.
We decided we should get an attorney involved in the process. Our thinking was that the attorney could help speed the process, and help with negotiations down the line. The first attorney we spoke with said he doesn't handle cases like these. It cost us $45 to hear that. We set up an appointment with another attorney. I tried to better explain our situation as I was setting up that appointment.
We talked with the attorney last Thursday. That was a very good meeting. The attorney is about our age, he's a bit arrogant, and kind of feisty. But he also came across as nice, and someone we can work with. The kind of guy we would like in our corner. He also assured us that he would attempt to negotiate no 1099 for any forgiven debt. That's about a $9,000 savings if it happens.
Less than 24 hours after our meeting, we got a viable offer on our house. $7,000 less than we're asking. I sent the offer to the attorney. We're scheduled to have a call with him this evening. We'll see where it goes. Regardless, things are looking much better for us than they were a week ago.
Update on our "for sale" house
October 31st, 2012 at 05:18 pm
October 31st, 2012 at 05:46 pm 1351705609
I am kind of LOL at the attorney. I think he means well, and this is all moot if you can get a sale this year. But, you can not change the tax law. This is a common theme I see in divorces. Divorce attorneys write all sorts of weird tax things into settlement agreements that can not be done because they are contrary to tax law. When filing taxes, you have to follow tax laws. Anyway, so if this home sale happens next year and no tax laws are changed, the lender would legally have to issue you a 1099, and whether or not they do so, you are still legally required to pay tax on the debt that is forgiven. There are a lot of what-ifs in that there could be some tax break extensions in this area. Let's just hope the home sells fast and you don't have to deal with debt forgiveness!
October 31st, 2012 at 05:53 pm 1351705988
November 1st, 2012 at 12:20 pm 1351772421