More boring terms/definitions, etc.: POTENTIAL TAX CONSEQUENCES OF A FORECLOSURE FOR THE BORROWER: When a lender forecloses on a home, the IRS treats it as a sale. If the borrower is not personally liable for the debt, such as would be the case for a nonrecourse loan, then the selling price is equal to the price of the cancelled debt. If the borrower is liable for the debt, then the sale price is equal to the canceled debt up to the fair market value (FMV) of the home. If the canceled debt is greater than the FMV, then the difference between the debt and the FMV is treated as ordinary income, for which the lender is required to send a Form 1099-C, Cancellation of Debt (COD), listing the amount of ordinary income. Any unpaid liabilities on the property, such as property taxes, will reduce the FMV of the home and increase the COD. However, if the liabilities are paid by the borrower, then this will increase the FMV and decrease the COD. The lender will also send a Form 1099-A, Acquisition or Abandonment of Secured Property, that will allow the borrower to determine the capital gain or loss from the foreclosure. Taxes must be paid on the capital gain in addition to any ordinary income from the canceled debt that exceeds the FMV of the home in a recourse loan. For a nonrecourse loan, any income is treated as a capital gain equal to the canceled debt minus the adjusted basis of the propertythere is no COD income. However, a capital loss from a foreclosure cannot be deducted. With the recent decline of home prices, many homes are worth less than the amount of money owed on the property, especially for borrowers who took advantage of lax lending standards, and bought with no money down or used inflated home appraisals. Consequently, many homeowners whose homes were foreclosed by the lender may owe a significant amount of taxes.The IRS treats all forgiven debt as ordinary income, even though in the case of foreclosure, the homeowner doesnÂt get to keep the home. If the taxes are not paid for the year the debt was canceled, then the IRS adds penalties and interest to the total tax bill, which can often be tens of thousands of dollars. However, the tax is not owed: ...if the debt is discharged in bankruptcy; ...the debtor is insolvent, with debts greater than assets; ...the fair market value of the home is greater than the canceled debt; ...or the loan was from a friend or relative and the canceled debt is treated as a gift. Any debt canceled by a commercial lender is not considered a gift by the IRS. ...Because the lender has some discretion in valuing a home, it can sometimes be successfully argued that the fair market value of the home was greater than the debt, in which case, no tax on COD is due. TITLE INSURANCE: An insurance policy used to ensure ownership where abstracts are not used. The borrower pays for the lender's policy. They are wise to also cough up another $50, or so, and purchase one for themselves; but the lender does not require it. CLOUD: Doubt, a gap in the chain of ownership. Or, it could be a lien, unpaid taxes, or something else that affects ownership. ENCUMBRANCE: Mortgage, lien, tax, or any restriction on the use of the land...could also be an easement. ABSTRACT OF JUDGMENT: An abstract is a summary (see title abstract). An abstract of judgment is a summary of a judgment. A judgment is the end result of a lawsuit. It shows who won the lawsuit, who lost, how much is owed, what Court made the decisions, the date of the judgment, and the attorney for the winner of the lawsuit. Once the abstract of judgment is recorded (filed with the county clerk or county recorder), it creates a general lien on the judgment debtor's property, including the real estate. An abstract of judgment will be discovered by a title company whenever a landowner tries to sell the land. Most title companies will demand that it be paid off as a condition of insuring the resale. /tricia

There are good agents and bad ones. The system down here is like an e-bay acution. The advert reads offers above $X. I'm used to a system where the vendor states their price, and the vendee (?) offers under that price and they compromise somewhere in between. Well the last 3 realestate purchases we have made, have worked on the old system - we have been happy, the sellers have been happy, the agents have been nice. All the agents that work on the dutch auction system seem to be "ar53h0135" if you don't mind be saying so. Daughter has had similar experiences. we nearly bought a house as a rental investment. I made an offer, the agent said they had a higher bid, I said tough. The agent pestered me for a week. Then he told me 2 weeks later that the previous offer had fallen through, so we were back in the running. I told him I had lost interest. He told me I knew nothing about buying investment properties. I swore at him and hung the phone up loudly in his ear. end of story. How does the dutch auction system work? Well - you put in a bid. They tell you they have a higher bid, and pester you to raise your bid, but they don't tell you how much has been offered, or by whom. etc, etc. FGS they might not even have another person bidding, like in the case I described above. It sucks big time. Another thing I have learnt about buying real estate ..... get a survey done before you buy. Make sure the land fits the description exactly. 3 times it hasn't for us. twice it has worked out in our favour, and not been disastrous. The last time we pulled out of the contract because of the survey. Lucky for the vendors, or we would now own not only the land they were selling, but 1/2 their house that they weren't selling. It had been built across the boundary of 2 blocks. The agent doesn't really tell you any of that. Our solicitor told us to check it. A conveyencing officer will do the conveyencing cheaper than a solicitor, but they might not tell you to check the boundaries, and it is the responsibility of the purchaser to do that.

Lukki, I surely understand what you are saying - and I don't get any of this either. What I have to do right now is believe my son. I am thinking he may be misinformed, but I don't believe he is lying to us. I am still thinking that when I sign the title over, it will have both of their names on it. I do not know what I will do then. My sister is also on the title; I cannot even imagine her reaction. She does not know what has transpired over the last two weeks. I do not know what her parents are thinking either. They are on the other side of the country and I have met them twice. Our offer of money was way before theirs, so it would seem to me that they might have contacted us?? They know at the moment this is my house. If I were them, I wouldn't be putting a penny in. Kswl, this is not a new situation. When he first offered to buy the house, my sister and I sat down with both of them and explained the terms of the sale, which were basically the price and title. No other strings were attached. So she knew the terms from day 1. But you are right, no outcome will satisfy all parties. The whole situation is horrible. I have tried and tried - we all have, and when any one of us wants to give up on her, I say try harder. We have all bit our tongues and tried to keep the peace. My son defends her every move - and can explain away any of her antics, FB postings, etc. She is both the antagonizer and the victim. I think he feels the need to take care of her. But at this point, at least we see our son, not as much as we would like, but we do. He is the youngest and we always seemed to have the closest relationship with him. Unfortunately, not anymore and there is nothing we can do about it. I don't know what I will do if both names are on the title when I have to sign. I just don't know, but I do know that whatever happens, this nightmare will be over by June 1st. Thanks to all of you for your support! Great day to all!!

Timely subject. Our neighborhood just received our property tax assessments for 2016, payable in 2017. Our property taxes have gone up 45%. Our home values have not. We had a refi appraisal within the last year & our home value was less than the current property taxes, prior to this increase. A 45% increase & our taxes are already high. Illinois is number 50, of 50 states, in public pension debt. In the recent past, the federal government has given Illinois stimulus money for education. The majority of that money has NOT gone to schools & students - it has paid for pension debt. We're going to need another bailout from the states that have been fiscally responsible. Edit: We will be appealing - we do every year. The first time we used an attorney, whose fee was 50% of of the tax savings. Then we started doing it ourselves. We have the choice to appeal based on "uniformity" or "overvaluation." "Uniformity" involves collecting & submitting comps of other comparable homes. "Overvaluation" is submitting a home appraisal with a date of Jan 1, 2016 so we get tax credit for the entire year. We've had better results with the home appraisal, overvaluation method. Everyone in our neighborhood's home value has jumped up by between $200,000 - $400,000, according to the taxing authority. I'd have no problem with it if our home value had truly increased, but it hasn't.