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Old 06-28-2010, 10:17 AM
 
6 posts, read 9,792 times
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Sellers of Short Sale Going to have renters lease until Short Sale Goes Through?
Hi, All. We currently are under contract with the sellers of a short sale property and are awaiting for approval by the bank. The Sellers do not live in the property as they have another home in the area. They were renting out the property to another couple who have since bought another house and moved. Right now the property is vacant and the sellers agreed that we may "rent" the home until the bank approves the short sale. We proposed a rent amount of $1,800 a month (which I think is more than fair given the fact that the sellers are no longer paying their mortgage and the money is going straight to their pockets). They are saying they will only take $2,200 a month and that if we don't pay it than they will find other renters to stay there. My question is how can they rent to other people when we are in negotiations with the bank? What happens if the bank wants to close in two weeks and their renters have a lease? Also, given the fact they don't even pay their mortgage, isn't $1,800 fair? I would love to hear others opinions about this! Thanks!
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Old 06-28-2010, 11:11 AM
 
Location: Just south of Denver since 1989
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What happens if the bank says no to the short sale?
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Old 06-28-2010, 11:16 AM
 
Location: Austin
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And how does the seller show proof of "hardship" if they're collecting rent on the property as income?
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Old 06-28-2010, 11:52 AM
 
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I completely agree.....we have faith that the short sale will go through...or trying to have faith. Our offer price matches the appraisal exactly and the short sale is being handled by a professional short sale company with a very high success rate. I argued from the beginning that even $1,800 is way too high given that they don't pay their mortgage. They just seem to be being completely unfair in the situation. Especially bringing in new renters adds so much complication to the deal.
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Old 06-28-2010, 01:05 PM
 
Location: Tempe, Arizona
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As the owners of the home, they can bring in renters even though in negotiations for a short sale. As indicated, it may hurt their chances of short selling due to the extra income, but it's their choice.

You can still close with the renters in the home, but you will have to honor their lease (you become their landlord). If month to month, you may be able to give notice to vacate (usually 30 days), but depends on your state's tenant laws. If a longer term lease, you will have to wait for it to expire, or they move on their own.
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Old 06-28-2010, 02:54 PM
 
Location: NJ
17,579 posts, read 39,754,055 times
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I'm curious if the sellers renting out the house would be grounds for cancelling the contract. It seems like it almost has to be. Imagine buying a house and all of a sudden finding out there are renters.
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Old 06-28-2010, 07:58 PM
 
Location: Tempe, Arizona
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Quote:
Originally Posted by manderly6 View Post
I'm curious if the sellers renting out the house would be grounds for cancelling the contract. It seems like it almost has to be. Imagine buying a house and all of a sudden finding out there are renters.
More than likely depending on what the contract says. Most say the house must be maintained in the same condition as when accepted. Bringing in tenants after the fact is probably grounds to terminate. In any case, most short sale agreements should have a cancellation option anyway prior to lender acceptance.
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