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If you are currently trying to sell your house and you owe more than it's worth or what others are selling for - if you had the cash right now to make up the difference at closing would you drop the price right now and just write a check at closing?

No rent it out until market recovers. Sell in a sellers market.

Depends on the situation...have you already moved on to a new home or still stuck in this one? Can you afford to pay two mortgages? Are you willing to become a "de-facto" landlord if you decide to move out, move on and give over management to a rental agency which DOES NOT shield you from potential liabilty? Lots to think about - post back with more particulars.

REL & IR - are you currnently trying to sell a home that you owe more than it's worth?

I think you have misunderstood my post. Please read again.

How fast do you want or need to sell, that should give your your answer.

Without more details, my advice:

If you NEED to sell (not want to sell) and have the cash to make up the difference between the offer price and what you owe on it, I suggest you do so in order to move on cleanly.

If you WANT to sell (not need to sell), I suggest you wait out the market a while longer in order to get a purchase price as close to the owed amount as possible so to minimize cash outlay at closing.

(More details from you on your unique situation may change the above recommendation)

quote:

Originally posted by johnson7425:
REL & IR - are you currnently trying to sell a home that you owe more than it's worth?

I think you have misunderstood my post. Please read again.

Read your initial post over and over again - probably half dozen times - still sounds like what I thought after reading it the first time and posting what I thought was a helpful post.

So what did I miss? Please let me know...

Edited to Add: After the fact I noticed you just registered and this was only your second post - no problem there BUT very interesting that you addressed each of us via our nicknames here on the boards! How did you know them? And what was your previous user name? Just wondering... Sorry, no further help coming from here on what is clearly a bogus post...

This message has been edited. Last edited by: Idaho Resident,

Johnson---- are you selling a home with mortgage more than what it is worth?

renting a house out in todays market is not such a great idea either .Look at the show hgtv had on with people who rented there houses out and the problems they had .Rent not paid houses destroyed and I have seen it here agent suggested they reant and got what they thought were great renters background check everything and the renters took off and destroyed the house .Light fixtures gone ,appliances gone ,heat pump gone .toilets broken ,windows broken ,doors missing . These people had good references and the house was only 3 years old .

quote:

Originally posted by sissy77:
renting a house out in todays market is not such a great idea either .Look at the show hgtv had on with people who rented there houses out and the problems they had .Rent not paid houses destroyed and I have seen it here agent suggested they reant and got what they thought were great renters background check everything and the renters took off and destroyed the house .Light fixtures gone ,appliances gone ,heat pump gone .toilets broken ,windows broken ,doors missing . These people had good references and the house was only 3 years old .

I haven't seen the show you're referencing; but it is television. They want the high profile exception. Sure bad things happen, but for the most part if you have a good property manager you will not have those problems.

rentals are here to stay and an excellent option for someone who cannot financially justify selling a house in the current market.

quote:

And what was your previous user name? Just wondering... Sorry, no further help coming from here on what is clearly a bogus post...

Yup, the whole thing sounded odd, particularly after the 2nd post.

quote:

Originally posted by sissy77:
renting a house out in todays market is not such a great idea either .Look at the show hgtv had on with people who rented there houses out and the problems they had .Rent not paid houses destroyed and I have seen it here agent suggested they reant and got what they thought were great renters background check everything and the renters took off and destroyed the house .Light fixtures gone ,appliances gone ,heat pump gone .toilets broken ,windows broken ,doors missing . These people had good references and the house was only 3 years old .

No offense, but do you believe everything that you see on HGTV?
There are many reputable Management Companies, that is all they do. rentals, and they make sure that your property is taken care of, and that the rent gets collected on time.
I am sure that those things happen, but, I bet that any of them had a good management company.

I did not see this on tv and they did have an agency that checked these people out The management company said in todays market expect the worse but hope for the best ,They are even helping with some of the repairs .Thing was the agency was out there 3 weeks before this to do there inspection and took pics and everything was fine .They do an inspection of the property during the rental period ,Had a friend with a Florida rental to lady had 2 cats fine but she just took off and leaving 12 cats behind to destroy the place .I believe what I see not what I hear from anyone .

by the way the house I am talking about is right down the road from in a great neighborhood and with nicer homes on large lots .I was speaking about what I saw on tv as just extra concern .These people showed the damage to there house on hgtv and how the house was messed up and just before they were convinced to rent when they could not sell they had remodeled the whole house

quote:

Originally posted by johnson7425:
If you are currently trying to sell your house and you owe more than it's worth or what others are selling for - if you had the cash right now to make up the difference at closing would you drop the price right now and just write a check at closing?

Yes, I would. Personally, I would prefer to cut my losses and move on. Especially if I was purchasing another home, as I would see it as a win.

quote:

Originally posted by sissy77:
by the way the house I am talking about is right down the road from in a great neighborhood and with nicer homes on large lots .I was speaking about what I saw on tv as just extra concern .These people showed the damage to there house on hgtv and how the house was messed up and just before they were convinced to rent when they could not sell they had remodeled the whole house

Sissy, I am a landlord, have had lots of tenants over the years. Extreme damage is the extreme exception. My tenants are good, pay their rent like clockwork. I've never had much damage, almost all is normal wear and tear, some so are so clean I don't even have a cleaner come in to do a simple clean up before renting to a new tenant. The negative view of bad tenants is overblown on this forum, there are many good tenants out there.
BTW, I never ask my tenants for references, waste of time. I do run a credit check.

quote:

Originally posted by Lakelark:

quote:

Originally posted by johnson7425:
If you are currently trying to sell your house and you owe more than it's worth or what others are selling for - if you had the cash right now to make up the difference at closing would you drop the price right now and just write a check at closing?

Yes, I would. Personally, I would prefer to cut my losses and move on. Especially if I was purchasing another home, as I would see it as a win.

I agree life is too short to wait it out if you can afford it now.

It is true there are some good renters out there and there are bad renters out there .I was surprised what these people did and I was the one who informed the company of what I saw .I went for my daily walk by this house and saw the broken windows and called the police and these people were nice and had a credit check .I have seen several of these happening around here as the economy goes down so does the quality of the renters around here .I guess people want that rural feel but when they realize the cost of it well that is hard to handle .With gas prices going up it is not an easy thing to handle .You are lucky to have good renters .I have seen foreclosed homes out here that people take everything that is not nailed down and the banks are left with a shell of a home to sell .Sad and we all pay for it because when these houses sell at a much lower price it brings down the value of our homes ,so we pay .This home will be sold now I understand as a fixer upper for 25 thousand and they paid 89 thousand new on 2 acres

johnson7425, You have received a number of great responses re your situation with good suggestions yet no post-back - at least not for several weeks...

Why?

Johnson - be kind.

quote:

Originally posted by johnson7425:
I have not responded because it seems that no one has understood my post. I am asking for answers ONLY from people who CURRENTLY have their houses on the market. I am not asking a hypothetical question. But I understand that there are some people who respond to every post - regardless if it applies to them.
IR - it appears that you are very consumed with trying to "catch" someone posting comments with hidden agendas. Sorry that you have become so jaded.

WOW you!!!! seem to know a lot about IR without knowing who she is, or even having met her. In the message boards we just simply try to answer questions to the best of our abilities. I can assure you,that no one here has any hidden agenda. We just try to help in our own way.
Like REL stated be kind with your comments.

Johnson, it appears you previously received many helpful, hypothetical responses.

I understand your desire for current, RL responses without hypotheticals. However, if you think about your request, what % of mb users are in the RE market at any given time? Probably far less than 5% of the HGTV mb user population.

Then, what % of those mb users (sellers) are currently active and stumble across your post? (For example, I rarely view these threads.) In addition, how many users only lurk, i.e. view the mb's but rarely post?

Plus, you need sellers who are underwater. (Unfortunately, that might be an easier sub-population among current sellers.)

Sorry for the analysis but it doesn't surprise me that you've had difficulty locating your desired population: active, posting mb users currently selling a property and underwater. Until you hear from posters in that specific situation, please thank and appreciate the other mb users who attempted to help you by responding with their hypotheticals.

Good Luck!

This message has been edited. Last edited by: tsr-res,

Now this pretty funny - apparently Johnson7524 (or whatever his currently user name is) has posted back BUT I'm not able to see the response - must be blocked?

Thanks to all of the rest of you, I was able to see the various comments going back and forth. Johnson, I have no idea who you are or where you live BUT you do need to understand something. You need/want to sell your current place and the suggestions being posted here are simply that, suggestions!

Now, why you are upset with me? Not sure on that one - but I know it is frustrating to have a great place, knowing you will must likely have to bring a check to the closing table, just to move on...

BUT, hey, I didn't cause this real estate collapse, the upside-down mortgages or any of the rest of "those unpleasant topics" so, wish you the best - let us know how it turns out.

IR-

As you can see in Rker's post, who re-posted Johnsons' unkind post--the mods needed to be notified of Johnsons' off color remarks.
This is most likely why Johnsons' post is no longer viewable.

Our real estate boards here are great utilization for advice and suggestions to assess and feel we have, hopefully, given buyers clearer sailing through the home buying process, as well as sellers through their their efforts in selling. Buyers and sellers have generously given their experiences to help throw off possible roadblocks to others in the process ~~~ or those making plans for the future.

One hit wonders with off*ensive lyrics simply
won't be able to chart these waters.

This message has been edited. Last edited by: real estate lady,

REL - why is it that "the mods" were notified of my comments but not IR's? Hmmmm....

trs-res: You have a good point. My thought was that if no one fell into this category then no one would respond. Apparently my request was too complicated for this group.

One has to wonder though.......is REL and IR the same person?? Good cop/bad cop?? I think so.

Johnson - your thinking here is off base.

IR and myself are not the same person - IR is in Idaho and I am in Florida. There have been folks along the way with attitude not condusive with the momentum of the boards. For one reason or another they were unhappy with their circumstances and had a tendency to lash out on occasion. However those occasions were short lived, as they learned is was not the Drama board.

Your question was relative to someone upside down in their mortgage...bringing money to closing to avoid short sale. If you were not happy with responses from the boards, or if for whatever reason, people in that situation did not respond as you expected ~~ you can talk to a local lender, Realtor or title company for answers.

Good luck to you.

This message has been edited. Last edited by: real estate lady,

quote:

Originally posted by johnson7425:
REL - why is it that "the mods" were notified of my comments but not IR's? Hmmmm....
____

Response: I posted three times, all of which are still there - went back and re-read them all - not one was offensive as far as I can tell so what are you referring to? I only posted to help you focus on the various aspects of bringing a check to closing vs. hanging on and hoping the market will improve.
____

trs-res: You have a good point. My thought was that if no one fell into this category then no one would respond. Apparently my request was too complicated for this group.
____

Response: Wow, what a zinger from someone seeking help?
____

One has to wonder though.......is REL and IR the same person?? Good cop/bad cop?? I think so.

____

Response: Now, THAT made my day!

Sorry to disappoint you, "johnson," but REL and I are two different people, living on different sides of the country, who have never even met in real life but, REL, I absolutely insist that I get to be "Bad Cop" if we ever do meet and merge!

Thanks for posting, OP! These boards have been a bit slow so I appreciate your thread livening things up a bit BUT I suggest you concentrate on doing some serious research into the financial aspects of staying with a property you own that is upside-down, bringing a check to closing to get out of it once and for all, or hanging onto it as a rental with all of the ramifications that includes the tax consequences of both actions.

IR - just curious - what tax ramifications are involved in selling a house below what you currently owe?

johnson - Glad you posted back and my apologies that we got off on the wrong foot.

I was speaking of the tax ramifications of keeping a primary residence and converting it into a rental thus eliminating the capital gain exclusion on sales of a primary residence. Simply selling it at a loss, don't know of any particular tax problem there when you are upside-down BUT, as usual, do check with a qualified CPA before taking any action..

So happy that you posted back - I feel badly that this thread went in a negative way and I apologize if I was responsible for that. I wish you and all of your family a wonderful end of the year celebration! (See, I am trying to be PC so NOT saying any greetings in particular! )

In any event, I wish you and yours the best...

Hmmm, I've been away too long...

johnson, the serious and significant tax issue consists of potential tax liability on relief of debt income. Although a partial exclusion was granted on personal residences for the calendar years 2007 - 2012, the regulations contain certain limitations. Lenders forward Form 1099-C to allow taxpayers to calculate any allowed exclusion.

Definitely consult a CPA before initiating a short-sale of a personal residence (or the sale of any property whatsoever, for that matter) so you don't receive a nasty surprise when you calculate your tax liability.

Happy Holidays to all!

I'm not talking about doing a short sale. I am talking about writing a check out of my personal checking out for the difference between what I owe and what I can sell it for. For that transaction I see no tax implications.

quote:

Originally posted by Idaho Resident:
Depends on the situation...have you already moved on to a new home or still stuck in this one? Can you afford to pay two mortgages? Are you willing to become a "de-facto" landlord if you decide to move out, move on and give over management to a rental agency which DOES NOT shield you from potential liabilty? Lots to think about - post back with more particulars.

Then it comes down to the factors in my original post and only you can make the decision since we still don't have any idea of the circumstances.

Good luck with whatever you decide to do...

johnson,

Your exact question was "what tax ramifications are involved in selling a house below what you currently owe". You provided no other information.

For not only your benefit but other readers of this thread, I believe it's extremely important for someone to post the proper answer to the question you raised.

the answer is....consult a tax attorney or an accountant in your town.

quote:

Originally posted by johnson7425:
I'm not talking about doing a short sale. I am talking about writing a check out of my personal checking out for the difference between what I owe and what I can sell it for. For that transaction I see no tax implications.

That is correct. There should be no taxes or 10-99 issued by the bank if you paid off the mortgage in full with the proceeds from the sale plus your own funds.

You're welcome, johnson - any time.

BTW, if we changed another item (only one) of your scenario's fact pattern, other tax effects could occur.

To anyone out there contemplating a major transaction, if you have questions or concerns, please consult a professional. These m.b. postings are informal and shouldn't be relied upon. They're worth exactly what was paid for them.

quote:

Originally posted by tsr-res:

For not only your benefit but other readers of this thread, I believe it's extremely important for someone to post the proper answer to the question you raised.

No one can post a proper answer to the question Op raised as he/she has failed to post any particulars of the situation or provide any further information other than venting his frustration at being under-water...

quote:

I'm not talking about doing a short sale. I am talking about writing a check out of my personal checking out for the difference between what I owe and what I can sell it for. For that transaction I see no tax implications.

Why are you thinking about writing a check and for what amount in relationship to the value of the home? Sometimes it's better not to. Do you have a contract on your home and you are thinking of paying off the difference? Why?

From what she has stated, she just wants to leave at all costs. She rather pay from her own money than rent or stay. At least is what I have understood from all of this.
Of course, she is asking questions that only a Tax Accountant really knows for sure.