Home Selling in Bridgeport>Question Details

basiaa1313, Home Buyer in Chicago, IL

If you short sale your condo, when you can buy a property for cash?

Asked by basiaa1313, Chicago, IL Fri Oct 19, 2012

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17
Hi Basiaa,

True you can purchase immediately after you close, however, there is a clause in the short sale approval letter that clearly states that if the bank discovers there was "fraud" committed they can sue you for the forgiven amount (balance minus the proceeds they received).

Hope this helps and good luck!
2 votes Thank Flag Link Fri Oct 19, 2012
Basia,

As soon as you have the money, then you can buy a place for cash. It is unlikely that your lender would approve your short sale if you have a pile of cash.

Best of luck,
Ivan Sagel
312-515-7823
1 vote Thank Flag Link Fri Oct 19, 2012
In the short sale process with your lender, you need to make a hardship case. If you have cash to purchase a new property, you may want to review the documents you signed to qualify for your approved short sale. You needed to disclose that cash you intend to use for the new purchase. If you do not disclose your assets, there may be significant consequences! Talk to your attorney!!!
1 vote Thank Flag Link Fri Oct 19, 2012
Once the short sale is completed.
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
1 vote Thank Flag Link Fri Oct 19, 2012
Thank you everyone for advices :-)
0 votes Thank Flag Link Sun Oct 28, 2012
Immediately.

However, as suggested already, if you have (are hiding) that much cash, you're likely (I'm not a lawyer, so this isn't legal advice) committing fraud by telling your lender that you have a financial hardship.

Don't do it.
0 votes Thank Flag Link Sat Oct 27, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
you can do it right after you close on the short sale however i would wait till the bank waives it deficiency and you get a 1099C at the end of the year
0 votes Thank Flag Link Sat Oct 27, 2012
Speak to an attorney. I would think you can possibly buy it in the name of a Trust to avoid having the bank find out
0 votes Thank Flag Link Fri Oct 19, 2012
The only way that you can buy a property cash and have no problems in the future with the Bank is if you settle with your Bank or financial institution and they report your short sale as paid in full. Otherwise, is an excellent idea to wait a few years to buy another property cash.

I have that situation with a customer and the Bank find out a year later and now they charging her the full amount that she originally owed.

Best of Luck,

Maria Cipollone

Century 21 Tenace

http://www.Flahomespecialist.com
0 votes Thank Flag Link Fri Oct 19, 2012
There are so many different answers here.

Let's look at a general picture. I am not giving you any legal or tax advice and recommend you consult with those trusted resources.

In a short sale the lender wants to see your bank accounts and see that you have a hard ship. If you have money you probably don't have a hard ship.

The laws of state vary so you will want to check on consequences of the lender coming after you after a short sale and any tax you may have to pay due to the release of the financial burden.

If you were to purchase first before or after short selling, there will be no credit check on the purchase so that is removed.

If you purchase before short selling the funds are no longer available as assets. Your current lender may look for homes you own.

Have you already closed on your short sale? If not, there are so many variables that can affect the outcome, I encourage you to talk with the trusted professionals so that you take the best course of action for your goal.

Have an amazing day!
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Fri Oct 19, 2012
Not for a while. At least a few years. You can try but they will probably come after you for money on the other short sale.
0 votes Thank Flag Link Fri Oct 19, 2012
you can buy immediately, especially if you disclosed to the short sale lender that you had these funds.
There should not be an issue if the money you use is not from your own sources.
Gift funds should work.
0 votes Thank Flag Link Fri Oct 19, 2012
I would be careful. In Illinois, the lender can sue you for the difference between the amount you owed them and the final sale amount. Did the lender waive any of its rights to pursue a deficiency judgment? If not, you better hope they don't find out about using cash to buy another property.
0 votes Thank Flag Link Fri Oct 19, 2012
There is no connection between a short sale and cash. Although you might want to hide the ownership of the property you buy because IF the lien holder does not let you off the hook for the deficiency judgement, they could come after your other assets to collect. If you have $$$ laying around in bank accounts waiting to buy something cash, when the lien holder does their homework on you and discovers it they clearly will NOT let you off the hook. You might want to speak with an attorney about this.
0 votes Thank Flag Link Fri Oct 19, 2012
It is better to wait after closing. You may open up a bag of worms if your current lender finds out you purchased another property.
0 votes Thank Flag Link Fri Oct 19, 2012
wait till it closed, you do not want your lender to know that You haves some interest in some NEW property, deed will show!
0 votes Thank Flag Link Fri Oct 19, 2012
Immediately:
If you are paying CASH, you are not dependent upon a LOAN.

Good luck and may God bless
0 votes Thank Flag Link Fri Oct 19, 2012
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