Can the buyer of a short sale home, turn around and rent it back to the people that are short selling?
J L asked:
We are trying to short sale our house and were approached by some people from up north that wanted to buy some property here in Florida and rent it out or a copule of years. They offered to buy our short sale house if we would sign a 2 year lease and rent from them. At the end of the 2 years they would like to either move into the house, or sell it, possibly back to us at the appraised amount. Can this be done? I have only heard of this as an issue of having family buying a short sale so their family members can stay in their own house by renting it and then maybe buy it back when it could be afforded.
We are trying to short sale our house and were approached by some people from up north that wanted to buy some property here in Florida and rent it out or a copule of years. They offered to buy our short sale house if we would sign a 2 year lease and rent from them. At the end of the 2 years they would like to either move into the house, or sell it, possibly back to us at the appraised amount. Can this be done? I have only heard of this as an issue of having family buying a short sale so their family members can stay in their own house by renting it and then maybe buy it back when it could be afforded.
March 31st, 2009 at 10:36 am
Once they own it they can do whatever they want to with it.
April 1st, 2009 at 3:06 am
depends. Sometimes at your closing you will sign papers stating that you will live in the house, and not be allowed to rent it. depends on the bank whose loaning the money.
April 3rd, 2009 at 1:02 am
you have to look at the laws in your state. in california you can if the new buyer is purchasing the property as an investment property. if he is purchasing as owner occupied he has to live in the property for 6 months afther that he can rent it out. Hope this helps.
April 3rd, 2009 at 11:20 pm
If it’s an arms-length deal, yes it is legal.
It only works if their costs are low enough that you can afford to pay the rent and utilities. With a short sale and lower interest rates, this can happen sometimes.
April 4th, 2009 at 12:26 pm
Legally speaking, yes.
However, the lender will be looking closely at the proposed transaction, and are not required to agree to anything short of full payoff.
If they see this being done, they might just say “no”.
Once the deal is done and they get what they’ve demanded, they’ll never look at it again. Even if they do, as long as no one has lied to them about this aspect of the transaction, there’s not much they could do then. If anyone DOES lie to them, though, it could be grounds to rescind their part of the deal and come after you for any deficiency, even if forgiven.
Don’t offer the information, but if asked, don’t lie.
April 6th, 2009 at 8:45 am
Hi
You has owner may rent to anyone you choose.
April 8th, 2009 at 2:41 am
Sounds to me like this would be the ideal scenario. You get 2 years to stay in your home, repair credit ratings, and save money for the move!
Be careful, get an attorney, and GOOD LUCK!