Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Well, my friends, we have FINALLY sold our house in Buffalo. Thank God!!! We have been looking in the neighborhood we want to buy in for 18 months so we know what is a good house and what isn't. There is one we like that we were considering as a lease purchase last fall but decided not to pay all that money out in rent if we didn't know when we would sell in Buffalo, how it would eventually appraise, too many risks etc. This particular house is now leased out until end of August. IF we were to come to an agreement on price with the seller, would you consider closing now and just assuming the lease? OR would you do a purchase contract now with a closing date of after the lease is over and specify the home be vacant at closing?
There are risks involved in us taking it over with a tenant obviously. The house could be in great condition now but what if they trash it between now and then? What if they don't leave for some reason? Whenever I drive by there are at least 4-5 cars there and all the shades are drawn. I have fears of those drug houses you hear about where they set up in the nice neighborhoods but, then again, we have all of our shades drawn in our rental and we're just doing Just Dance and watching Bravo in here. ;-)
On the other hand, they might be model tenants and we make some cash until we move in. The rent would be at least $1500 profit monthly so I'm not against making some dough and we could set that aside if there are any legal issues we need to address though I hope this isn't the case.
Of course, I would love to buy it and be able to move in right away. I'm sure we could approach the tenants after we close and see if they want to leave early or not. Does anyone know if you purchase a home with tenants, if you can give them a certain amount of days notice that they MUST leave? This is not a foreclosure situation so wouldn't fall into the laws Obama passed and I have read that Georgia handbook about tenants/landlords and it doesn't get into this specific type of thing. My best case scenario is that they want to leave early and go so we can move into the house before summer starts so my kids can start making friends (and we can to) and I can get all of my furniture and things back in my house!
Anyway, just looking for thoughts and advice. Thanks!!
First, congratulations on selling your home. Second, with all the properties available at great prices out there, why would you want to buy a house with tenants? It might work out great, or it might be a headache. I wouldn't want to bother with the unknown.
Thanks for your reply. We have narrowed our search to one specific neighborhood that is golf and gated in the school we want. There are not many homes on the market in there and the "good deals" homes are not something you can easily resell or anything we want. Out of the 40 homes we have looked at in this neighborhood, we only liked this one and one other that already sold. The fact that there are not many homes is a good thing because the neighborhood is very stable but bad for us buyers. Anything that has come on the market within the last few weeks that were nice, have gone under contract right away. We could ultimately buy this before it goes on the market. We can certainly wait a month or two before doing anything with this house since it is rented until August and that gives us time to see what comes on in the next couple of months. This is also an option but I like the idea of getting this home tied up and under contract and purchased since we really loved it and has most everything we wanted at a relatively good price for what we are going to get.
Can you just put it under contract from now until the tenants leave?
You can always get out of it before the closing. Maybe you could stipulate that you want a 2 week due diligence period after the tenants leave. You'll need to do your inspection, figure out what needs fixing, etc. I assume you aren't going to do that with the tenants living there. It would kind of be worthless as there is so much time for new things to break and come up before the closing.
I would just put it under contract and have the due diligence period start when the tenants leave. That way, if you decide to back out, all you have to lose is your earnest money, which may be worth it if you really think you would have a problem finding another house you love so much.
If you don't mind me asking, what is the neighborhood? Just curious, because nice gated golf communities in good school districts seem to be a dime a dozen around where I live.
BTW, having 4 or 5 cars parked outside would raise massive red flags to me. But you never know, maybe it's just a family who has really popular kids with friends always over.
I am assuming the seller could terminate the lease with a penalty. It would be to their advantage to pay that penalty rather than let a sale escape them. You could also agree to pay that penalty by bumping up your purchase price accordingly which would include it in your mortgage - assuming their is value in the home to cover it.
If you decide to accept the house with tenants here are some things to keep in mind:
Make sure that all deposits paid by the tenant are forwarded to you
Ask to see a history of the rental payments and if any credit check was done on the tenants etc.
Get the seller to pay for a professional cleaning (ie. $300) of the house after the tenant moves out. I did this when I bought my townhome since I did not believe the tenants would care about leaving it in good shape and the last thing I wanted to do was cleanup their mess
Ask to see the lease. If the lease stipulates that the current owner can get the tenants to move out with notice/payment (or whatever it says), then they can enforce that clause and get the tenants to leave, per the lease terms. The standard GA Realtor lease includes that clause, but you have to fill it out. If this lease does not include that clause, then the current owner can ASK the tenants to move and see if they will. The current owner CAN NOT "make" the tenants leave early unless the lease provides for that, or unless there is a legal reason to evict them. In this state, if you buy a house with a lease in place, the lease terms still apply for the duration of the lease period, the same as if you were the original landlord. So, you can't make them leave early, either, just because you now own the house. However, money often talks, and maybe they can be persuaded with money to move early. But they don't have to. And pray that they are not deadbeats, because in Fulton County it takes a solid 90 days at least to evict someone, if you do everything correctly and swiftly, and it involves several trips to the courthouse and some money. And there are some other potential headaches and expenses. Definitely you want to see the lease, and personally I would want to meet the tenants and see how they are living and what they are like. And yes you want the deposits and the rental history. I don't think that legally the owner can share the tenant's actual credit reports and background check (if they did them) with you, due to privacy laws, but I suppose you could ask general questions about the results and see if they would answer them. Good luck. If you love this house, maybe this is OK for you to do. It could be a situation where if you don't want to buy it with tenants in place, someone else might be fine with that and buy it, and you won't get the house. Only you can decide if the house is special enough/good deal enough to take on the risks. Good luck. Again, see the lease, meet the tenants. The seller could lie about the rental payment history (sorry I know that is negative) unless they showed you copies of deposited checks or something. There are a lot of deadbeat tenants out there, so be careful. In Fulton county hundreds of evictions are filed every month! And, when the crooks finally leave, they often leave a filthy house, and/or a damaged house, and/or a bunch of their junk in there that you have to hire movers to move in the presence of the sheriff. And again, 90 days at least, and they all know this. They will often lie and tell you they will move once you start the eviction process, but usually if their mouths are moving, they are lying. Don't believe it. They likely won't budge until the last possible day, in many cases. They know the system better than you do, they do this repeatedly and their friends do, too, and they all know just how long they can steal from you before they have to bounce out the day before the sheriff comes to remove them and their stuff. If you just put their stuff at the curb yourself then they can sue you for the "value" of their left behind junk and from what I hear, they can win. Seriously. The laws in GA are set up to protect tenants more than landlords. Be careful. Good luck. I would insist on meeting them and see what they seem to be like, but think in your head what you would do if they are entitled to be there until August, don't want to leave early, and then go on to stay there until eviction is over, which would be November/December. If that is OK, and they seem nice and the place seems clean so far, you might go for it.
Hi, my husband and I just bought a home (or are trying to close on it next week) that was a forclosure, a duplex, and had one side occupied by tennants. Due to the type of loan we were getting we had to have the tennants out by closing. And since it was a foreclosure, the bank selling the property sold it 'as is'. We couldn't legally evict the tennants until 90 days past closing, so that wasn't an option for us. We approached the tennants to see what their intentions were as to staying or moving out. They were planning on staying up until thier lease ended (4 mos away), that wouldn't work for us either. So, we asked them what the deposit was that they had put down for the house. Since it was a foreclosure, they were not going to be getting thier deposit back from the owner that had rented them the property in the first place. They woudl've been out $1000. Because this was an amazing deal of a house, my husband and I decided to offer them thier deposit back as a 'cash for keys' agreement. We found an agreement and all parties signed it. Even though the tenants were not thrilled about moving out prior to thier lease ending, they were happy to be getting thier deposit back. Of course, my husband and I were worried about the tenants doing damage and so forth, but if they wanted thier money. In the end the tenants moved out and the house was left clean and in good condition. We are still waiting to close, but that is another story. PM me if you want more info on the 'cash for keys' agreement.
ATLTJL- Yes, we could probably put it under contract now to close once they vacate and could back out if there are issues BUT I have to wait six months with all of my things in storage in our temporary housing and pay $2000/month to store the furniture. I also could not then make an offer on something else if it comes up in the meantime. It might be wiser for us to just wait to go under contract and in the meantime, see if anything else comes up. They did say they would call us first in mid-July BUT there is a small risk the housing market could bounce back or that they wouldn't agree to a price they might agree to now to lock us up. We don't want to pass on another house we might be IF we can't have the #1 house. I agree with the cars making me nervous. They are all expensive cars ie. Benz, Cadillac BUT I drove by yesterday at 10am- school was in session!
lorilove- good advice and we would definitely get records of everything prior and find out as much as we can about the tenants before hand. IF there is a provision in the lease, that would be great. We would rather them leave.
Whittier- This is exactly the kind of thing I want to avoid. It's not Fulton but Forsyth county and I don't care if it's faster here or not..I don't want to deal with that headache.
brooklynbarker- good luck to you on closing. I know how stressful this process is. I am familiar with Cash for Keys as I used to work in the REO department at a major mortgage bank. That would certainly be an option for us since we would have the storage expense anyway so would probably be happy to pay them off. Their rent is anywhere from $3500-$4000 a month. I should just tell them we'll switch houses- our rent is half that!
We are having problems with our buyers picking bull**** items they want fixed on our house. Things that would be expected with a six year old home- some rush on an outdoor a/c, a couple of cracked pieces of siding...annoying things like that. I need to get through this first and hope we still have a deal.
Thanks for all of your feedback. I think I'm leaning toward us not buying it until it's vacant, waiting until summer to go under contract or seeing if they can get them to move out with notice before we close as per their lease. I know they are allowed to start showing the home for sale with 30 days left on their lease so I'm wondering if they are NOT allowed to do anything until then. We shall see!!
Yes, well, unfortunately, the owners don't like us much. We already tried to do a deal last fall like I said and they were annoyed with us being so "picky" you know like in case they blew us off once we paid them months of rent and the house didn't appraise or we didn't like the inspection report.
So, for some reason, even though I am getting screwed up north, I have to ***** foot down here. I thought this area has a bad housing market? The neighborhood we are buying in is in demand in our district and there are not many homes for sale. That could, of course, change but the last few I've wanted to see sold right away. I think the sellers would just hold onto the house and keep renting it if they don't get what they want...that's what they have threatened anyway. They own two other very expensive homes, one in St. ives where they live and one in another subdivision near St. Marlo on Mcginnis ferry (name escapes me now). She's a realtor and they only have an interest only loan on this house we want and though they claim they are losing money every month on it, they don't seem too anxious to deal. My realtor feels like our position will be much better once our house is sold which is true so hope that makes a difference.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
