Financing in 32920>Question Details

Peg, Both Buyer and Seller in Cape Canaveral, FL

Can I do a short sale and roll the differnce into a new property?

Asked by Peg, Cape Canaveral, FL Tue Feb 12, 2008

2 votes Share Flag Financing in 32920

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You may want to check into q 10-31 exchange.

NOT sure if this is a primary res or investment, BUT I would HIGHLY recommend talking to a CPA or CFP before moving forward.

Hope this helps! Stay in touch and let us know how it tuns out for you.
0 votes Thank Flag Link Tue Feb 12, 2008
Hi Peg,

It's interesting to see that everyone is assuming that you want to roll a positive difference into the new property, but I'm guessing that you are asking about being able to more the negative difference into a new property. It sounds like an honorable idea, but I think it would only be considered if you are using the same lender. if you do not want to walk away from your debts, then perhaps just sign a note to repay would be easier.

Good luck.
1 vote Thank Flag Link Fri Jun 4, 2010
Hi Peg.

As part of the short sale, you will not receive any money, as stated below by other Realtors. The bank will eat the difference of what you owe on the mortgage and what you get for the sale of the property. They will pay the Brokerage fees and will even pay the movers. Bottom line on the HUD, you get nothing.

If the home is a primary residence, you will not have to pay taxes on the shortcomings up to $2 million. That federal law HR? I don't have the number in front of me at the moment. You can email me for it, if you wish and see for yourself. And, your credit is not nearly as affected as it would be if the bank repossesses on a foreclosure. You can qualify for FHA immediately after a short sale.

Consult with a local FL attorney who specializes in short sales to be sure, as this is what I was taught at a short sales seminar in NJ.
Web Reference:
1 vote Thank Flag Link Tue Feb 12, 2008
The whole point of a short sale is you owe more than the property is worth. The bank agrees to "short sale" the amount of the payoff so you may sell the property and be released from the mortgage. You as the seller are not allowed to receive any funds at closing since you asking the bank to accept less than what is owed to them.
1 vote Thank Flag Link Tue Feb 12, 2008
depending what state you are in you may have to pay taxes on the forgiven debt. In NY State they look at the difference that is forgiven as income and give you a 1099. Bush has developed the "Debt Forgiveness" program looking to end that, you may want to google the program to get all of the specifics.
1 vote Thank Flag Link Tue Feb 12, 2008
There is no difference to you the borrower. The lender makes up the loan balance and you can count on not having a FICO score with which to buy anything else using a mortgage.
1 vote Thank Flag Link Tue Feb 12, 2008
No you can't. If you short sale, it will be at least 2 years before you can qualify to purchase again. You can not roll the difference in what you owe on your current home to the new home, because a lender will not lend more than a property is worth.
0 votes Thank Flag Link Thu Sep 1, 2011
A couple of points:
If you qualify for a short sale, you are supposed to be insolvent (meaning unable to pay your bills). In most cases that means you will not qualify for financing a new purchase for two years. So how do you plan to purchase the new home?

Also, you might be able to negotiate a promissory note for the shortage. Depending upon the amount of the note and how it is negotiated might determine the impact on your credit score.
0 votes Thank Flag Link Fri Jun 4, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
Unfortuantely it's not like being upside down on a car. The good news is if the short sale is approved you walk away owing nothing in most cases. You have to prove a hardship. Look for a CDPE (Certified Distressed Property Expert) agent in your area to advise you.
Web Reference:
0 votes Thank Flag Link Thu Jun 3, 2010
On a Short Sale you will have no difference to roll anywhere. You will walk away from a short sale with NO proceeds from the sale.
0 votes Thank Flag Link Thu Jun 3, 2010
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