Deficiency Judgement Language
I have a client who’d like to make an offer on a property in which the seller is attempting a short sale. The seller would like some language in the contract to protect against a 1099 and a deficiency judgment. Do you have any good language that I can add to my contract?
Darryl
ANSWER
Darryl,
A 1099, if one is issued, is issued by the lender. There is no way that a buyer can guarantee that the lender will not issue a 1099. I have heard of people putting such things into contracts, but I honestly can’t see what difference it would make given that the contract is still always between the buyer and seller and not with the lender, who is only agreeing to a reduced payoff.
It might be possible to ask the lender to sign a separate document stating that they will not issue a 1099 if the short sale offer is accepted. I would suggest not asking for this or telling the seller you would try to negotiate becasue this is risky because the lender will likely do whatever they want and such a request could gum up the rest of the deal.
Additionally, it is my experience that it is very unlikely and even unusual for a lender to go after a deficiency judgment even if they say that they will or might…
Phill
know any good private money lenders?
Do you know any good private money lenders for single family residential homes?
Dee
ANSWER
Dee,
If you are looking for private $$ for rehabs, I am selectively offering to fund projects that people partner with me on. Partnering is a great way to mitigate risk and do more deals. Call if you need more information.
Phill
Appraiser?
Hi,
First, thanks for the great database. I have been a lurker for a while.
I have two requests.
Can you recommend a good residential appraiser?
I would also be interested in a good commercial appraiser (does this exist?). I am considering a commercial property out toward Dripping Springs and I want to make sure the costs make sense. I am not sure if I am ready for this leap yet, though, so any other pointers to good resources for commercial property investing would be much appreciated.
Thanks in advance!
Matt
ANSWER
Matt,
In general, an appraiser will tell you how much a home will appraise for, for lending purposes, and a realtor will tell you how much you could actually sell a property for. These may or may not be the same number. For example, I had a home that appraised very high, but was virtually unsellable (without dropping the price a great deal) due to market conditions and unique issues with the home.
I’m sure this will generate all sorts of objections from appraisers. Sorry!
That said, I’m not sure I would rely on an appraiser, or want to pay for one, to help you evaluate an investment opportunity. You might instead find an experienced realtor or an experienced investor to help you evaluate the ARV of a property. Or, you might want to partner with someone 
Phill
