Replies to This Discussion

Permalink Reply by Bryant Tutas on June 23, 2011 at 11:24pm

Damon. I just did a short sale for a foreign owner and is was very easy. My suggestion though would be for your seller to hook up with a CPA now. For one reason you will have to deal will FIRPTA.  The seller is going to need a TIN and will need to file the past due Tax returns. I don't know if this will be a requirement of Wells Fargo (Wachovia) but it is an IRS requirement.

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Permalink Reply by Eric Mieles on June 24, 2011 at 6:09am

Damon,

 

I just closed one last week. Sellers live in Ecuador. 1st I would recommend checking to see if this qualifies under the fast track program. If it does you will only need 4 docs.

-Autho Letter

-Hud

-Purchase agreement

-Wachovia form

We did the mail away. The only hold up was the amount of time it took for them to see a notary to get all the docs signed and back to us. Other than that no toher issues. As Bryant said I would also recommend a good CPA.

 

Good luck.

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Permalink Reply by Bryant Tutas on June 25, 2011 at 11:26pm

I'm going to place this in the newsletter today to see what kind of responses we can get.

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Permalink Reply by Damon Botticelli on June 26, 2011 at 8:23am

Thanks for the replies, and I'll be certain to get a good CPA involved if the seller & I decide to pursue the short sale. 

 

Bryant & Eric: Did either of your deals require a FIRPTA withholding? 

 

The seller is considering letting it go to foreclosure rather than make the effort required for the short sale.  Obtaining a TIN#, filing past due tax returns (and paying penalties) all for the chance to apply for a short sale that may or may not go through is probably more than the seller is willing to do.

 

His goal for the short sale is to have the deficiency balance forgiven.  He would like to begin to establish US credit and even though he currently doesn't have any US credit, the thought was to resolve this loan before establishing any new credit.

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Permalink Reply by Bryant Tutas on June 26, 2011 at 8:34am

Hi Damon. My seller had her CPA file for an exception with the IRS. Once we received the letter form the IRS we were able to close without withholding.

Other solutions are: Some times once the filing is done the closing agent can hold the 10% in escrow instead of sending it to the IRS. The lender may agree to an escrow disbursement agreement where once the exception is received from the IRS the funds can be released to the lender.

Or there are transactions that are exempt from the withholding. The most common and easiest is if the buyer is purchasing as their primary residence and the purchase price is less than $300,000. You can read about the exemptions here.

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Permalink Reply by Julianne Thorne on June 26, 2011 at 9:23am

Should not be a problem if they have a work visa or green card....And, yes, the TIN will be inperative....And the IRS will want to know.... 

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