Can I short sale and buy again later?

Get Legal Help Today

 Secured with SHA-256 Encryption

Can I short sale and buy again later?

Sole owner 10 years in property – value declined so much so that I owe much more on the mortgage – attempted to apply for loan modification and this did not help. I am struggling financially so am considering short sale and buying in 2/3 years once I have regained my losses. What do I need to know?

Asked on April 12, 2011 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is no general legal impediment to selling property short then buying other property or even the same  property again later. Here are  factors to consider:

1) A short sale will still hurt your credit--though not as much as a default, foreclosure, or bankruptcy--because it's still not paying a debt in full. This will impact your ability to borrow and the rate and terms you get later.

2) If the bank does not approve the short sale, they can sue you for the remaining balance of the mortgage.

3) If you sell the property to person A, then buy it back later from person A, then--assuming you got bank approval, which means the bank essentially wrote off part of the debt--you will be under scrutiny to see if the series of transactions was not at arms length and was intended to defraud the bank.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption