Most lenders who approve a short-sale will require it to be an 'Arm's Length Transaction', meaning that no 'blood' relative of the seller can purchase the home. Both buyer and seller (and their respective real estate agents) are typically asked to sign an affidavit stating that all parties agree that the sale is an 'Arm's Length Transaction'. There are penalties to all parties involved should the bank determine that the affidavit has been violated or entered into fraudulently.
Since you aren't married, and never were, and you're not a 'blood' relative, you should be able to make an offer and purchase the home IF your offer is sufficient to meet the bank's minimum NET. However, since you were on title at some point, albeit with different last names (I'm assuming), even though you were never on the loan, they might NOT consider that to be 'Arm's Length' should they look at the title history, which they might.
That being said, before you wasted your time and energy making an offer, I would have the seller call his lender and simply ask a few questions about what 'type' of buyer is allowed. Be up front with them, and try and get their definition of what they consider to be an 'Arms Length Transaction'. To be perfectly honest, the seller's personal life is of no consequence to the lender, so long as it doesn't violate the original loan agreement and deed of trust, at least that's how I view it.
I'm sure there will be varying opinions from the agents here on Trulia, however, but that's what this forum/blog is for!
Hope that helps!
Century 21 All Star, REALTORS
Unfortunately under the short sale agreement the Banks usually includes the following clause in a purchase contract:
"Seller and Buyer each represent that the sale is an "arms length" transaction and the Seller and Buyer are unrelated to each other by family, marriage or commercial enterprise." The Buyer agrees not to sell the property within 90 days of closing of this sale."
There will be a title search on the property and they will see that you were on the property previously.
You need to talk to an Real Estate Attorney, here are a few links for low cost legal assistance http://www.azbar.org/LawyersHelpingYou/freelegal.cfm or http://www.azlawhelp.org/housing.cfm
You could also talk to the Bank to see if you can qualify to purchase the home.
I hope this information is helpful. If you should need assistance or additional information please do not hesitate to contact me.
Thank you, Cara J. Simmons
I agree Your first answer by Jim. he was right on. Find out from the lender if this would be a problem.
Best of luck,
If your name was on the title it could be an issue. Each bank, has their own rules in this regard when accepting a short sale offer from a family member or insider or owner that is or was involved with the bank's loan being short paid (less than balance owed). The only way to find out is to disclose when you submit the offer or have your Realtor review with the asset manager at the bank.
The good news? If this home does not work out, there are many more out there.
Arizona Homes and Land
The answer is we could likely accomplish that goal. We may have a hurdle or two to overcome in doing so, might be best for us to talk about the details.
Lets talk soon about the details that you might not want to air on a public site such as this.
Arizona Homes For Sale by a Guy from Iowa