Hi - we bought our home in VA, Sept 2006. After husband's contract went south, he accepted another job in Kansas, Oct. 2007. We placed our house for sell, received an offer that very weekend, but it fell through. His new job was very understanding, and let him fly back and forth until Jan. 2008 - when He moved to Kansas and rented out a room, while I stayed in VA with our children. We received another offer May 2008 - and again it fell through. At that point, we decided to rent the house out - taking a loss of $1000 month. I was pregnant with our 3rd child and due soon, and we needed to be together as a family. Our tenants will be moving out May 2009.
We have decided to short sell the house. We owe $335,000 (1 loan only). The house is worth $220,000 (house next door sold foreclosure Nov 2008 for $210,000). We bought for $429,000. Have no PMI. Have contacted several realestate agents and have found one that has done many short sells and has a team in his office doing them. Quite aggressive and experienced.
Questions: 1) Will we have to make payments on the difference in the sell - or can we negotiate that?
2) Will the bank want our bank account $? We currently have $35,000 (all that we have).
3) How are the taxes handled (1099)? Do we pay taxes on the $100,000+ diff in the sell?