Zillow Advice: Home Buying - Is it possible to buy a home for less than what is owed on the mortgage?

I understand that if the ...

Fri, 19 Dec 2008 05:48:00 GMT

I understand that if the lender allows a discount (short sale) on the amount due that it is considered income for tax purposes. Is that true?

Yes but you're better off ...

Fri, 19 Dec 2008 05:47:00 GMT

Yes but you're better off just buying a foreclosure home in some cases. Just wait till that home forecloses, and it will if they are desperate now, then just wait until the bank lists it and snatch it up. Foreclosures are quite attractive during this down cycle.

Not sure where you are. In ...

Fri, 19 Dec 2008 05:36:00 GMT

Not sure where you are. In California that is what short sale is all about.
You need to find a property where loan(s) are from 1 lender not two different lenders. With regular sale it is hard enough to get buyer and seller agree on every offer. Can you image how complicated the transaction is? In most cases, the 1st lender(80%) can recover most or all of his mortgage. The 2nd lender (20%) gets little or none. The success rate is how skilled your agent is.
Typically, if there is a concession the realtor(s) have to swallow the cost.
Assuming there is a $10,000 termite or repair that the realtors have to swallow. How motivated can your and other agent are. They probably do it for free. The success rate here(Silicon Valley) is low. It takes patience and all parties have to communicate effectively(easy say than to be done). When you hire an agent quiz him/her and asking the agent what forms or disclosure forms and if the agent is skilled he will immediately show a copy and explain the section to protect you. If he/she is not skilled find another willing agent. Good luck.

It's possible -- and increasingly ...

Fri, 19 Dec 2008 05:18:00 GMT

It's possible -- and increasingly common. It's called a "short sale." The current owner agrees to sell at the price you both agree to, subject to the lender(s) agreeing to accept less than what they are owed in order for you to get clear title to the home.