Las Vegas, NV -- One of the most common questions we're asked is, "Can I stay in my home after the short sale is complete?" Many Realtors and even some Attorneys claim they can sell your home to an investor (i.e. Cash Buyer, Hedge Fund Buyer, Non-Profit Buyer etc.) who will allow you to "lease back" your home as "tenants" after the short sale is finalized...or possibly "Buy It Back" after three years. Who wouldn't want to take advantage of an opportunity like this? Staying in your home would avoid the inconvenience of moving, costly moving expenses, etc. This seems like an attractive solution, however, is it really an option? Is there a catch?
While laws have prohibited such occurrences from happening, an amendment was made to the Making Home Affordable Program that allows a Non-Profit Organization to buy a home, and then resell or lease the home back to the seller. Section 7.3 of Chapter 4 of the Home Affordable Foreclosure Alternatives Program (HAFA) provides the clause which allows a non-profit organization to buy and rent back as long as all other HAFA requirements are met. As with most things sounding, "too good to be true," the devil is in the details. Here are a few things to research before considering a program like this:
1) The ability to participate in this program applies ONLY if you qualify for a HAFA short sale. Many people in Nevada DO NOT qualify for HAFA short sales. For example, if you purchased your home by obtaining an FHA or VA loan, you may not qualify for HAFA. Additionally, this program is SUBJECT TO APPROVAL BY THE SERVICER AND INVESTOR. This means that "IF" you qualify for HAFA, your bank must still approve the sale to a non-profit organization. It is NOT a guarantee and is at the Servicer's discretion. (Please refer to section 7.3 of Chapter Four of the Making Home Affordable Supplemental Directive 11-02: otherwise known as directive 1102)
2) Non-Owner Occupied Properties may not qualify for HAFA. Therefore, if you purchased your home as an investment, you may not be eligible for this program.
3) Ever wonder why a "non-profit organization" would be willing to purchase your home and allow you to lease it or buy it back after several years? If they're a true "non-profit" organization, and cannot "earn a profit," then what is their incentive? The answer has to do with rental income. Currently in Las Vegas, there is a very low inventory of properties for sale. This is due to a recent influx of CASH Buyers, and/or CASH Investor Hedge Fund Groups who are taking advantage of current market conditions and buying everything in sight. The majority of these CASH investors are not interested in "flipping" the properties. Instead, they're looking to rent these homes for profit for the next 5-10 years. This has resulted in a record number of available rental properties in Nevada. Competition for tenants is fierce. Most investors are trying to rent these properties for top dollar, however, many are currently sitting vacant due to the large inventory of properties recently purchased by these investors. Did you know that if you sell your home to a "non-profit organization" with the intent of "Buying It Back" you will likely be asked to sign a 3 YEAR LEASE? Per HAFA guidelines, you must rent for a minimum three year term before they will allow you to buy the home back. Before you agree to sign a "three year lease" what will your rent payment be? Will the rent be competitive with other homes in your area? What if there are bigger homes with better upgrades available for less rent in your area? With so many rental homes available in this market, landlords are offering perks such as paying for lawn maintenance, gardener expenses, pool maintenance, etc. Will the person who buys your home expect YOU to pay these expenses? If something breaks, will they expect YOU to pay for repairs, etc.? With thousands of homes currently in escrow being purchased by CASH investors, what will happen to rental prices when these homes flood the market and the current rental inventory grows even bigger? Will rental prices drop? When you buy it back, how much of a down payment will be required? Do your research and make the best decision for you and your family. Don't get taken advantage of by someone who knows you may be emotionally attached to your home and wants to lock you into a THREE YEAR LEASE. Most importantly, whomever you hire to do your short sale (Realtor or Attorney), will they agree IN WRITING to refund your money if you don't qualify for the "HAFA Buy It Back Program?" IF NOT, GET UP AND LEAVE! The decision to short sell your home is a business decision. You need to do what is best for your family. Staying in your home and possibly paying more than you should for rent could cost you a lot of money in the long run...money which could be saved to use as a down payment on your next home purchase.
The Myers Team with The Caliber Realty Group is nationally recognized as one of the most influential figures in Real Estate today. According to Myers Team owner, Bill Myers, "Surrendering a home worth half of what you owe is NOT a failure, it's a business decision. A short sale is an opportunity for you and your family to take control and walk away free and clear. Nobody wants to lose their home; however, loan modification doesn't work and there is no need to go down with a sinking ship. Homeowners need to know when to say enough is enough.
Bill and Francoise Myers have helped hundreds of Las Vegas families avoid foreclosure. Myers said, "Sellers facing foreclosure must remember that banks are not looking out for you or your family. When you work with The Myers Team, our job is to get between you and the bank. We represent our clients, NOT the banks. It is our job to negotiate the best possible outcome. Ultimately, our job is to take away the stress, and make the transaction as smooth and stress-free as possible."
Visit The Myers Team web site at http://www.NevadaShortSaleInfo.com
Also visit http://www.VegasShortSaleInfo.com
*Above production is based on results from January 1,
2007 through December 31, 2012 (short sale listing ends only from non-lawyer
affiliated Realtors and Brokers.) The information provided is obtained from
public records, it is deemed reliable but not guaranteed.