It would not be wise to agree to rental payments without advance compensation especially to sellers in pre-foreclosure. Take care of you and your family first and foremost. Good luck to you!
Should I have that language included to allow them to rent back for 60 days or the end of June 2012 or whichever comes first CONTINGENT on their lender's approval.
Should that have any effect on the length of time it would take to get bank approval at all?
I am sure it varies by lender but it doesn't look like this can (in most cases) be done in a short sale.
Will including this on the sale agreement make the entire process take longer? If it doesn't make it take longer maybe we can include language that makes the entire thing contingent on the language of the arms length affidavit making our personal agreement void should this be asked of us.
I am in love with the house and don't want to make the sellers not accept my offer but I am CERTAINLY not committing any kind of fraud.
They seem like good people and would be paying more in rent than my PITI so it would give me some money to put away and I doubt it would even come to that... I don't mind the wait it gives me more time to save.
I just want to make sure, above all else that I am following the rules and regulations and am not committing fraud in the unlikely chance that it comes to that.
1. It could take 6 months or longer, or less. It all depends on how willing the bank is to accept the short sale, and even if they do accept, how quickly they can move the process along. It also depends on how amenable the second lien holder is to the short sale. Some banks are very very tough in approving these sales. Lastly it also depends on how willing the SELLER is to accept any and all terms as set forth by both lien holders to approve the sale, ie: theycould request a note to be paid by the seller for the shortage. This mostly happens with second lien holders.
2. Be very careful as to what you agree to with the seller in terms of a rent back. As part of the short sale agreement you will most likely be required to sign an affadavit that says you have not or will not be a party to any type of arrangement in this regard. This is very important: Talk to your lawyer about this. A breach of this agreement could result in the bank taking the house back from you, worse case scanarion if they were to find out. I would not agree to ANY rent back in a short sale transaction. You are putting yourself at risk. Please talk to a good real estate attorney before you move forward with this.
As to the first part of my question I was hoping that since the BPO was already in the works (He has already been to the house to take pictures and whatnot) and that there is already a negotiatior at the table that it would be a good sign that things are already pretty progressed if not progressing... A lot of short sale snags I see from my research is that things take forever to just start moving.
I was never comfortable with the rent back... Just because I want to move in when I can because I'm excited... I just figured the owners seem like good quality people, it gives me more time to save, I would move in the summer rather than winter and I don't have to stress about when its going to close because I know either way it is going to take 6 months for me to move in... But if my lender would object anyway it might be out of my hands.
When it comes to renting the property, you'll need to feel comfortable. What type of loan are you getting? Is it FHA? FHA mandates you have to reside in the property? Have you met the current home owners? You'll need to ensure you have a contract with them to ensure they move when June comes or you can be heading into an eviction?
Do you have a buyers agent? If not, please feel free to contact me personally for further assistance and I will do my best to answer all the questions/concerns you have. My office is located in Cumberland on Mendon Rd and my name is Monalisa. My direct line is 401-413-8581.
Answer to the second question... maybe... you sound like a thoughtful person, but be wary...