I’ve Completed a Short Sale… Now What? Do I Owe Anything Else?

Posted on August 30, 2011

Deficiency: If after the short sale there is a deficiency between what you owed on your loan and what the house was sold for you may be on the hook for that amount, unless there is a written agreement otherwise. In addition, if this amount is forgiven and it was larger than $600 you may have to pay taxes on it.

Owed Back Taxes: You should be free and clear of them going forward because your escrow provider and/or title insurer have to clear those tax liens, making sure they are paid up to the date of closing, before they transfer clear title to the buyer.

Homeowner’s Association Dues: You may be responsible for all of some of your owed Home Owners Association fees. Sometime the bank will pay them or contribute to paying them and sometimes the Buyer will contribute. But there are many situations where the Seller will have to pay all of them.

2nd and 3rd Mortgages that expressly agreed to let the short sale go forward on the condition that the seller/former homeowner would agree to pay some or all of the outstanding balance over time.

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