My husband and I are on a journey that involves a 9 month short sale with BofA that is just about (hopefully) to close. We got word back from the bank that the seller needs to come up with 10K in cash and then our offer has been accepted. The seller does NOT have this 10K in cash (if she did, prob would not be interested in the short sale) and we have agreed to come up with 8K if she comes up with the 2K. Now what happens with this 8K?? Is this just a lost cash to my husband and me and we have to look at it as it is a good deal with the 8K?? I hate to think that I just gave her the 8K with no tax benefits or ANYTHING coming back to me for it. Please help...
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In a recent transaction, the negotiators also asked for contributions towards payoff -- they asked for the contribution from buyers, sellers and even agents in terms of reduced commission. The buyers came up with the contribution especially since they knew that they're buying the property for significantly less than market value based on comps. They were getting a very good deal. Additionally, their tax basis was based on purchase price, not including their contribution. So that, too was a factor that made them feel right about making that contribution.
Do check with your CPA about how to treat that contribution. It may be considered as part of your closing costs.
Good luck.