Home Buying in 85224>Question Details

Cathy, Home Buyer in 85224

my X boyfriend is going to short sell his house. My name was never on the loan and i removed my name from title 6 months ago. Could i buy his house?

Asked by Cathy, 85224 Mon Mar 7, 2011

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Hi Cathy. This can be a touchy subject with some banks.

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!

Jim Mitchell
Century 21 All Star, REALTORS
3 votes Thank Flag Link Mon Mar 7, 2011
All parties involved in the sale of a short sale home are required to sign a Arms Length Transaction Affidavit. Being that you are a girlfriend of the owner, you are disqualified.
Web Reference: http://www.jameswehner.com
0 votes Thank Flag Link Tue Mar 8, 2011
Hi Cathy,

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
602-399-0663
Cara@CallCara.com
http://www.CallCara.com
0 votes Thank Flag Link Tue Mar 8, 2011
Dear Cathy,
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,
Nancy

Nancy Doyle
239-209-2237
nancy.doyle1@comcast.net
http://www.nancyd.listingbook.com
0 votes Thank Flag Link Tue Mar 8, 2011
Dear Cathy:

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.

Jeff Masich
Arizona Homes and Land
HomeSmart
Web Reference: http://ArizonaHomesLand.com
0 votes Thank Flag Link Mon Mar 7, 2011
Are you still living in the house?
0 votes Thank Flag Link Mon Mar 7, 2011
Consider consulting with an attorney who specializes in real estate before considering the purchase; he/she can best advise as it relates to your specific situation....
0 votes Thank Flag Link Mon Mar 7, 2011
Cathy, Jim's answer was excellent. Have your buyers agent contact the selling agent to make this inquiry. I would not do it directly since you will want your own representation and your interests are not the same as that of the seller.
0 votes Thank Flag Link Mon Mar 7, 2011
No need to respond. Jim Mitchell nailed it.
0 votes Thank Flag Link Mon Mar 7, 2011
Cathy

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.

Doug McVinua
HomeSmart

Arizona Homes For Sale by a Guy from Iowa
Web Reference: http://www.McVinua.com
0 votes Thank Flag Link Mon Mar 7, 2011
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