Home Buying in 95835>Question Details

Sacrenter2bu…, Renter in 95835

My roommate and I are looking to purchase our rental house from our landlord through a Short Sale. What things should we worry about?

Asked by Sacrenter2buyer, 95835 Mon May 9, 2011

Help the community by answering this question:

Answers

10
Sacrenter - having gone through this same scenario with one of my clients (trying to purchase rental from landlord), this pre-existing relationship WILL cause most lenders to reject this scenario as it appears your attempting to help bail out your landlord....doesn't matter if you aren't related to your landlord, this is how it works...

Once my clients finally decided to purchase another home (we tried for over a yr to finance the first home), their lending options greatly expanded, and we closed on their home about 4 months ago....

Though it's possible to find a lending source to handle your transaction, you're fighting an uphill battle here.....

Good luck!

Jeff
2 votes Thank Flag Link Sun Dec 18, 2011
Living there, you probably know the house pretty well, but it would still be a good idea to have some one check out the systems of the house, the structural integrity, roof, wood pest damage or infestation. Oh, and all the stuff E Weintraub and the other agents mentioned
1 vote Thank Flag Link Mon May 9, 2011
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
I don't this was adressed yet, but you need to have a written ownership agreement with your roommate. Do some research on how to hold title, it can have a big effect on on what happens later. (Agents can't advise on how to hold title.) You need to address what will happen if somebody wants to move out, it ain't like a lease!
1 vote Thank Flag Link Mon May 9, 2011
That the bank might reject it because you have a pre-existing relationship with the landlord. Whether you will pay too much. Whether the home will go to auction before the short sale can be completed. Whether somebody else will offer more than you -- and yes, the bank will want to see that home is listed for sale. Whether you could get rejected by your own lender. And those are just for starters.

Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
Sacramento Short Sale Agent

Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your
1 vote Thank Flag Link Mon May 9, 2011
Using the same agent. Beware most often the buyer ends up paying for fees they may not have to if represented by another agent.
0 votes Thank Flag Link Thu Nov 8, 2012
In summary:
1. You and the seller should have separate Realtors experienced in Short Sales. Check their records if possible.
2. Be aware that the sale may not be able to go through because of your pre-existing relationship with the seller.
3. Make sure to do a home inspection, pest inspection, etc. Know about the structural integrity of the home.
3. Find out the proposed auction date (if there is one) and keep it on your calendar. Know that the home could go to auction while your in negotiations. Your Realtor can help with this issue.

Good luck!
0 votes Thank Flag Link Tue May 10, 2011
I think this was addressed by others but I wanted to emphasize. Both you (as the buyer) and your landlord (as the seller) need to be working with experienced realtors...experienced in completing short sales. There are more questions that would be asked by those realtors. For example, does the landlord have a hardship that their lender would recognize to approve a short sale on the home? Is there more than one lender to negotiate the short sale with, on behalf of your landlord? Who are these lenders? (knowing that might give some insight into the length of the approval process.) next, you must disclose your relationship and most will allow that this is not a traditional 'arms length transaction' in that you know each other as a landlord/tenant relationship...but it MUST be disclosed. Last, keep paying your rent on time, every month. Should the worst happen, and the home be foreclosed upon, you will be negotiating with the REO listing agent in relation to your right of possession. You might be in a perfect position to purchase the home directly from the bank as an REO. In either case, making an offer at or near market value is what will get approved from the landlord's lender. good luck!
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Mon May 9, 2011
Get a REALTOR on your side before you talk any more with your landlord. Things to worry about are:
The property can still go to County Auction even if it is currently listed as a Short Sale. Your landlord may try and negociate on his or her own with the bank and depending on the terms they are able to get in palce you may over pay for the home.
Get a buyers agent invovled who has proof they have closed multiple Short Sale transactions (Metrolist Print Out or closed Files available in their broker of records office) within the past 24months. There are more things to worry about being the SELLER on a SHort Sale then a BUYER but that does not mean as the buyer you have no worries. Use a professional whenever possible...
0 votes Thank Flag Link Mon May 9, 2011
Make sure you are represented by a Realtor with short sale experience. Who is negotiating the short sale for your landlord? You need to be sure that it is someone with a great track record for closing short sale deals.

Dot Chance
Keller Williams World Media Center
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Mon May 9, 2011
Make sure you find a Realtor who is familiar with the short sale process and is representing you.
Short sales do take up a good amount of time and your patience is needed.

Many banks will also want you to verify that you do not have a relationship with the current owner.

Step 1: Find a knowledgable Realtor
Step 2: Get Pre-approved
Step 3: Make your offer
Step 4: Patience is needed while you wait for bank approval.

Good luck to you!

Michele Peterson
Keller Williams Realty
(916) 743-5934
CallMichelePeterson@gmail.com
0 votes Thank Flag Link Mon May 9, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer