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    Homestead Exemption

    Are you allowed to subtract liens & home equity loans from the equity of the home?

    For example,

    155 K = Value of Home

    Deductions
    15.5 = Cost of selling (10%)
    80.0 = Owed on mortgages
    2.5 = Liens
    13.0 = Home Equity Loan

    111 = Total Deductions

    Equity = Value - Deductions = 44 K

    Homestead exemption in Colorado = 45 K

    Does this sound right?
    *** THIS IS NOT LEGAL ADVICE--ONLY A LAWYER CAN PROVIDE THAT. ***

    My posts represent hours of research on and off the web, these forums, my experience, and my opinions.

    #2
    I'm not sure you can subtract the costs to sell the house if you want to keep it.

    When we've been chatting with attny's during Consults, they know we are trying to sell, we intend to give up the house in BK, and we have a Contingent offer.

    Their first question everytime has been, "Is there any equity in the house?"

    After we pay our mortgage, realtor fees, docs fees, and other closing costs, there would have been about $5K. But now with all the lates and additional fees piling on by the lender, that's eating into the $5K.

    And every attny says, "So there's no equity in the house."

    You can deduct the mortgage, any 2nd's or HELOC's you may have, Liens, etc. from the value of the home to determine equity remaining. You are right on that part.

    But if you plan on keeping the house, I don't know if REA commissions and associated selling costs enter in there or not. That would be a question for an attny.
    Filed Ch 7 - 09/06
    Discharged - 12/2006
    Officially Declared No Asset - 03/2007
    Closed - 04/2007

    I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

    Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

    Comment


      #3
      Noticed on more recent posts...

      ...that you are expecting to get a realtor's estimate on your unit 6/22. Hope you get a figure that works for you! Let us know what you've uncovered re: the above earlier post for your situation in Colorado. Hope this is good news for you.
      August '05 Business failed.
      Spring '06 Found this site, thank heavens
      Chap 7 (no asset) filed 11/10/06; 341:1/31/07
      disharged 2/26; closed 4/17/07

      Comment


        #4
        I have to postpone the market evaluation until Monday (yesterday was a crazy upsetting day and I just couldn't deal with it).

        However, the lawyers I have contacted said it is alright to deduct the cost of selling; however, the trustees differ as much as 7 to 10%.
        *** THIS IS NOT LEGAL ADVICE--ONLY A LAWYER CAN PROVIDE THAT. ***

        My posts represent hours of research on and off the web, these forums, my experience, and my opinions.

        Comment


          #5
          IMHO, 7-10% is too much swing between FMV appraisals. 2 or 3 independent appraisers should be closer than that. Generally they will have at least 1-2 identical comps. Their extra 1-2 comps may vary. But all their values should be very similar.

          We've done Corporate Relo's where the Company worked on 5% max variation. The house we were looking to buy,.......... The purchase price offer had to come within 5% of what the Company's appraiser said, or the Company would not back the deal. We would have to renegotiate the price with the seller, or move on to another property. The Company's appraiser tended to run a bit low compared to the Loan appraiser.

          And, since I initially posted, I have learned that you can indeed deduct the costs to sell the home. There's gonna be 6-7%, or whatever REA's charge in your area. The Title Company will charge a fee for their services. If you offer/are required to provide the buyers a Home Warranty, there's a fee for that. Prorated taxes to the date of sale. Seller's Title Insurance if that's typical in your area. So the total selling costs can easily run up to 10% of the FMV appraisal.
          Filed Ch 7 - 09/06
          Discharged - 12/2006
          Officially Declared No Asset - 03/2007
          Closed - 04/2007

          I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

          Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

          Comment


            #6
            The difference is that some trustees use 7% of FMV as the cost of selling where others permit 10% of FMV to calculate the cost of selling. I wasn't talking about the actual FMV of the house.
            *** THIS IS NOT LEGAL ADVICE--ONLY A LAWYER CAN PROVIDE THAT. ***

            My posts represent hours of research on and off the web, these forums, my experience, and my opinions.

            Comment

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