Have you discussed this with your lender? Cosigning on a house is not the same as a car, and the cosigner is equally responsible for the debt. You must be able to afford both places on your own and have equity in the condo. Banks are aware of this scenario and will protect themselves.
Talk to a lender about your plans before you get too far along. I donâ€™t think, based on what you have provided here, that you will be able to do this.
Talk is cheap, the I.R.S. in NOT! I am not trying to scare you, but no one is going to pay your bills if this goes wrong for you. Get legal advise and C.Y.A. Find out who is responable for the taxes on the loss, and if the bank can come back after later, even if you have a letter for their loss? The Realtor is right, we can not give financial or legal advise, but we can and should advise you to do so.
For example, I am helping a couple to short sell the condo, the wife was single when she bought the 1b condo, then she got married & they purchased a home together, now they're short selling the condo because they can't afford both places when the husband refuses to keep inserting funds into a sinking ship.
The bank is well aware that the wife was a co-borrower on the new house because they had to list it on their financial statement, they aren't trying to defraud the bank. Our short sale is now approved.
There's a lot of misinformation out there about short sales. Aaron, I would like to talk to you about your own unique situation & how to go about buying & what to do with the condo, I know I can give you some good advice. **Please email me directly as I don't look back on this same Trulia thread for answers posted after mine.
Bottomline: It's all about disclosure to the bank, if they'll agree to take the hit on the short sale, they'll agree & write off the loss at the end of the day.
Realtor Since 1996
Main Street Realtors
Short Sale Expert
That is a valid question. On the other hand, it is legal in nature, and it should be directed to a real estate attorney, as real estate agents, we are not in the position to give you legal advice. On the other hand, if you buy a home with your parents, and rent out your condo so you do not have to default on it, you will be in good shape. Let me know if I can help you further.
Have you tried to do a loan modification yet? There are several other strategies that might work to help you accomplish your goals depending on the answers to these questions.