I am working on my first Nation Star Short Sale. We did not receive an offer prior to the auction and therefore the auction went on. The day after the auction we received an offer that was 30k more than what the auction price was. Of course I told Nation star and they said that they could not entertain any other offers. Now they are wanting my seller to sign off on a contract with the auction winner even though my seller is the one that will receive a 1099..... I was also told that if my seller declines the auction bid that NationStar will decline the short sale. Does that mean we start over with the short sale process or does that mean they won't consider a short sale period? (I have sent this question to the asset manager and am awaiting a reply)  Can my seller counter the auction buyer? How do we get away from this auction buyer? I have not received a contract from Homesearch.com with buyers signatures yet. Please help. Any information will be helpful. I'm so confused by this crazy evil process.

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Asset managers response was "they will decline the short sale and move forward with the sale to the auction winner". How can they do that if the seller still owns the home?

Sorry to hear about this. This is a tough position to be in.  If the auction buyer "walks" it's very likely they will put this back on Auction and then the other buyer should be able to participate in the new homesearch auction.

I'd be having my client consult with a CPA. At the end of the day depending on their tax position they may not be liable to pay on the 1099-C if the short sale is completed.

Feel free to call me if you'd like at 310-564-6389.

[email protected]

www.ishortsalenow.com

You should first advise your seller to get legal advice and do not offer legal advice. I know we are all tempted but it is in everybody's best interest not to do it. It is very likely that a lawyer would advise the seller to let Nationstar close the file and reopen. Hold a new auction and then the new buyer can bid. Unless you are up against a foreclosure, the seller is still in control. A lawyer should probably review any paperwork the seller has signed with Nationstar regarding the auction.

Having said that, I can also add none of my sellers pay tax on the 1099. I think I've had one seller out of hundreds over the past 10 years who had to pay tax, and that was due to an investment and over basis. So you may also want to advise your seller to obtain tax advice from a competent adviser.

They are all evil.

My experience with auction is that they occur after forfeiture.  Was there a law date that passed (becoming bank owned) and subsequently a sale date (auction).  If this is the case then honor the auction winner.  If not, decline and start the process over.  I recommend getting a short sale approval and a sale price from the bank before you list the property for short sale.  This should be standard operating procedure anyway by both the bank and the short sale processor.  Hope this helps..

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