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Ok…everyone knows the real estate market is not too good right now so we are thinking of short selling our house. It is a house we bought for my parents and now they cannot afford it. Yea..yea…please save the lecture. I wish we had never done it.
Can anyone out there please tell me more the pros and cons for short sell on a house. We’ve heard that we will have to pay back taxes at the end of the year if we did short sale our house? I am scared. Please help!
Thank you so much in advance.

2 Thoughts on What are the pros and cons to short selling your house?
  1. Reply
    jombi
    October 15, 2011 at 12:26 am

    Well I think the biggest PRO is that you get the house sold and you are no longer having to service the loan.

    On the CON side you of course lose your down payment (if any) any equity and the value of any improvements. You also will get a 1099 from the mortgage company where they will report the amount of loss they took on the loan as income to you, which you’ll be on the hook for come tax time.

    I read one article where the Federal government may be proposing to do away with taxing that as income. A break for the unfortunate in these changing times.

    I really don’t know that it will do anything to your credit – does anyone know how the mortgage companies report that to the bureaus?

    Hope this helps and good luck.

  2. Reply
    jarke
    October 15, 2011 at 12:58 am

    are you too lazy to think it up yourself?

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