Home Buying in 49615>Question Details

C.j., Home Buyer in 49615

My son is renting w/option to buy. Recently he found out that the owner is going into bankruptcy and

Asked by C.j., 49615 Mon Mar 3, 2008

foreclosure on the house he is renting w/option. He wants to purchase this house, but has gone through bankruptcy/foreclosure himself. It will be 3 yrs ago on June 1, 2008. A realtor advised him to try financing with Rural Development after June 1st. Meanwhile, his landlord told him not to pay rent - because it would be considered Taxable income to him. So, he currently is living there rent-free and saving the money for a down payment/closing costs. He is worried about his family of 4 getting kicked out because of the impending foreclosure. What is your opinion on the situation?

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I would speak with a lawyer too. There could be issues if you son has made an option payment or if any portion of his payments were to be used for the payment on the house.
Web Reference: http://mioaklandcounty.com
1 vote Thank Flag Link Mon Mar 3, 2008
Maureen Fran…, Real Estate Pro in Birmingham, MI
MVP'08
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C.J., I would have to agree with the suggestions to seek legal advice. While the professionals on this site may empathize with your son’s position; we are not privy to all the information.
Web Reference: http://mi-living.com
0 votes Thank Flag Link Mon Mar 3, 2008
It is important what the initial contract said. Was some of his former rent going towards the down-payment? Was the option to purchase attached to the rental agreement. I would spend the money and seek legal advice. Realtors are not suppose to give legal advice.
Web Reference: http://MissyCaulkTeam.com
0 votes Thank Flag Link Mon Mar 3, 2008
CJ, this is a really great question. Sounds like the biggest concern is not getting kicked out of the house. Do you know where in the foreclosure process this landlord is? Generally speaking the process is as follows. 1.) Owner is 2-3 months behind in payments 2.) Owner is given a 30 day notice about a Sherriff's sale taking place 3.) Over the next 6 months to 1 year there is a redemption period where the owner can redeem the property back. *6 months for properties that are less than 3 acres and if they 3 acres or more than the redemption period is 1 year.

That is a good question for your son to ask the landlord if the landlord is willing to tell him. If the owner is in the redemption period perhaps your son could purchase it from the bank on a short sale. He may have time to work on getting a mortgage and submitting an offer. A real estate agent who understands this process would be in your best interest.

I hope this information helps. Let me know if you have any further questions regarding this. Best Wishes!
Web Reference: http://www.gomelinda.com/
0 votes Thank Flag Link Mon Mar 3, 2008
Hi CJ -

I would have your son speak with a mortgage lender IMMEDIATELY! Have them check his current credit/income to see if he will quailfy for a mortgage now, instead of waiting. There are many mortgage available, for all types of credit. The current owner may be able to negotiate a "short sale" with his current lender that could help him get from under this property. I work with several great lenders that I could recommend. Good luck. I hope everything works out for your son.

Nicole Sleeva
nsleeva@cbpreferred.com
Web Reference: http://www.NicoleSleeva.com
0 votes Thank Flag Link Mon Mar 3, 2008
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