Pre-Foreclosure / Short Sale - HELP!! (tenants, appraisal, auction, agent)
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there is a house Im very interested in and it's located in Naples, FL. It has every possible thing I could want in a house and it's the right price. I have noticed on the listing agents website that it's called a "pre-foreclosure / short sale" and I really need someone to explain to me exactly what this means in laymans terms.
The issue with our purchasing right now is that we won't know our job situation until the first week of April, then we plan to rent for a few months to get a feel for the neighborhood, home shop, etc. I have emailed the agent for more information and to find out if there is a possibility it can be leased with an option to own.
Could it be a possibility to lease a property like this and then buy it?
there is a house Im very interested in and it's located in Naples, FL. It has every possible thing I could want in a house and it's the right price. I have noticed on the listing agents website that it's called a "pre-foreclosure / short sale" and I really need someone to explain to me exactly what this means in laymans terms.
The issue with our purchasing right now is that we won't know our job situation until the first week of April, then we plan to rent for a few months to get a feel for the neighborhood, home shop, etc. I have emailed the agent for more information and to find out if there is a possibility it can be leased with an option to own.
Could it be a possibility to lease a property like this and then buy it?
Any help would be greatly appreciated.
Be prepared to wait a long time for a "pre-foreclosure/short sale"
If you are interested in the property, ask the agent directly is it a "bank approved short sale?"
Most of the time, agents or even sellers have no idea how to go about a short sale. They just list it as a short sale since they are underwater in their mortgage and short sales attract buyers.
You need to find out how much the owners owe on the mortgage vs. listing price. You need to find out whether the bank that owns the mortgage has ordered a broker's price opinion. If none of that has been ordered, it does not matter what the list price is. The bank's BPO will determine how much the property will sale for and how much the spread difference on the mortgage is.
I really can't see how a short sale could be turned into a lease to buy situation. The short sale process is already a pain in the rump without adding more complications.
As aneftp pointed out, a BPO or full appraisal needs to happen. For us, this didn't ocurr until we submitted an offer.
Why not? I'm about to do two of them right now. The tenants just need to be approved for financing, they go into a regular short sale contract, lease the house while the process is going on.
Why would it complicate it any more than homes offered on short sale basis to people other than the tenant presently living there, a situation that is happening daily? As long as there are provisions that the tenant/buyer needs to vacate if the short sale is not approved, I see no reason why it would be a problem... especially in Florida.
I'm kind of with palmcoasting on this one, I mean in these rough financial times especially in the area, I was being optimisitic and thinking perhaps the owners and we could work out something. I have heard before though that short sales do take a while. Well, one can only hope, right?
Why not? I'm about to do two of them right now. The tenants just need to be approved for financing, they go into a regular short sale contract, lease the house while the process is going on.
Why would it complicate it any more than homes offered on short sale basis to people other than the tenant presently living there, a situation that is happening daily? As long as there are provisions that the tenant/buyer needs to vacate if the short sale is not approved, I see no reason why it would be a problem... especially in Florida.
I agree. The tenants just need to know the prospective auction date in case things fail.
A pre-foreclosure means that the seller has not been able to make their payments, typically for at least 3 months. The bank sent a note to the county stating that they sellers defaulted on their loan and the bank intends to auction the home off to recoup some of their money.
A short sale means that instead of auctioning the home, the bank agrees to write off a loss. The house is worth LESS than the bank is owed. A homeowner can't clear the title to the property until the entire mortgage is paid off. The seller does not have the cash to pay off the money owned to the bank, so they are trying to get the bank to take a loss.
That is a short sale.
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