Property Q&A in Englewood>Question Details

Maryann Casey, Real Estate Pro in Englewood, FL

I currently have a short sale under contract, the buyers want to rent the home until closing. What is your opinion?

Asked by Maryann Casey, Englewood, FL Thu Nov 5, 2009

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Answers

6
No, No, and NO!!! Too many potential problems to even consider doing this.
0 votes Thank Flag Link Thu Nov 5, 2009
Hi Mary Ann,
I have to agree not a good idea. Besides all that is mentioned what if the buyers decide they don't like the house? Say byebye deal.
Laura Kildahl
Floridian Realty Services,LLC.
0 votes Thank Flag Link Thu Nov 5, 2009
I also failed to mention that the lender will want the rent money as well. So in hindsight I would not recommend renting. Too many things that could go wrong. Short Sales are a pain in the butt to begin with so no sense on making it any harder than it already is...

Jason Stevens, REALTOR®, GRI, ABR
Graduate Realtor Institute
Accredited Buyers Representative
Real Estate Broker Associate
REOTrans Platinum Certified
Kevin Flynn Realty, Inc.
Cell - 941-662-0379
Home Office - 941-698-0973
Home Fax - 941-698-0973
Website: http://www.jasonestevens.com
0 votes Thank Flag Link Thu Nov 5, 2009
Very good question Maryann. Is this a personal home of yours that you are selling as a Short Sale? My biggest concerns would be what if the Short Sale does not get approved? If they are financing and for some reason are unable to get the loan to close, then what? Are the buyers paying cash and provided a recent financial statement that they have the funds available for purchase? If you do decide to rent it make sure you get a good deposit. I've heard many of horror stories of folks purposely going out and trying to rent Short Sales knowing that the sellers are in financial hardships, then don't pay the rent because they know the sellers are in no position to pay the costs of eviction, or simply are bad tenants and destroy the place. Also most lenders when deciding whether or not to approve the Short Sale make you sign an affidavit stating that this is an arms length transaction. If you let them move in and they now become "tenants' I'm not sure how your lender will look at that. Long story short I would contact the lender and see if a "tenant" purchasing the property violates their interpretation of an arm's length transaction. Also make sure that you protect yourself in the event the Short Sale in not approved by making sure the lease is a week-to-week and can be terminated at any time for any reason by you.

Jason Stevens, REALTOR®, GRI, ABR
Graduate Realtor Institute
Accredited Buyers Representative
Real Estate Broker Associate
REOTrans Platinum Certified
Kevin Flynn Realty, Inc.
Cell - 941-662-0379
Home Office - 941-698-0973
Home Fax - 941-698-0973
Website: http://www.jasonestevens.com
0 votes Thank Flag Link Thu Nov 5, 2009
Hi Maryann,

I was approached with a similar question and turned it down. Jim is right. You would want to be extremely careful doing that in a regular sale, in fact I would not recommend it. That is why I point out to short sale home buyers if you need to move quickly , this is not your house.

Wishing you a speedy closing,
0 votes Thank Flag Link Thu Nov 5, 2009
HI Maryann,

Probably not a good idea. You know how delicate a short sale deal is. They can fall to pieces at the last minute if the bank should change it's mind then you're stuck with an unwanted renter in the house. Also, if the bank finds out that your renting it to the prospective buyer, they're going to want the rent money.

--Jim Reske
0 votes Thank Flag Link Thu Nov 5, 2009
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