Dave V.

Hi Gina,

Thanks again for a great answer. So, we go into attorney review and I get my inspection done like usual. Even though they may be selling it "as is", all that means is that they won't fix anything. Am I correct in thihking that I still have the right to back out if I don't like what I see on the inspection?
So then with regard to inspection, mortgage application, Section 8 inspection, state inspection (I heard this is necessary for a 3-family also), obtaining of CO, and closing, what's the sequence of events?
And can I go for the CO prior to closing, and if so, can I make the deal contingent upon my getting the CO?

Thanks,
Dave - Mon Jul 14 2008, 07:43

Gina and Joan,

Thanks for your great answers. I'm already pre-approved by Countrywide, so at least I have that in my favor.
There is one thing that confuses me however. If the seller and I agree on a price and go into attorney review, since this is a short sale, wouldn't the deal be contingent on the bank's approval? If so, wouldn't we be in attorney review the whole time (2-3 months, whatever it takes) until the bank approval comes through? If that's the case, how am I supposed to be ready to close right then? Wouldn't I have to go through the whole mortgage application process first? From my experience with other homes I've owned (not short sales), the mortgage application process takes weeks, even if I'm pre-approved. In fact, in the past, I couldn't even start the mortgage process until I was out of attorney review if I remember correctly. What am I missing? - Sun Jul 13 2008, 21:38

Scott,

When you say there may be tax consequences associated with a short sale, do you mean tax consequences for the seller or for the buyer? - Sun Jul 13 2008, 19:15

Hi. For the extra tax money that we pay, NJ homeowners (such as myself) receive the privilege of more traffic jams, more bureaucratic red tape for anything remotely connected to a state agency, more corruption at the state level, major flooding every couple of years, a state budget that is irreparably broken, and rapidly depreciating equity in our homes upon which those taxes are based, than any other state in the region. Where else can you pay 10K per year in taxes for 2007 on a house you bought for 630K last year, only to have both your taxes raised by 20% and the value of your home lowered by 20% at the same time in 2008?

While there are many towns in NJ that have excellent school systems and passable local government, there are just as many towns that do not. Unfortunately, the taxes for the municipalities that are run like crap are often higher. Why, you ask? Because those municipalities are run like crap, that's why!

Believe it or not, I actually like it here overall. But boy did you hit a sore spot! - Sat Jul 12 2008, 22:29

Thanks Diane, Developing a relationship with a couple of local contractors within each specialty might just work! Then I could run a tab and catch up at the end of each month. That's a keeper, and now I feel stupid for not having thought of it myself! Thanks again! - Fri Jul 11 2008, 21:06

Hi Gina. Thanks for the response. Yes, the reason I'd prefer section 8 tenants is because I want my money on time. While it's true that many (or most?) section 8 tenants don't keep the units in good shape, it's also true (and fair to mention) that most times the units are not in great shape to begin with. Section 8 inspections are concerned with health and safety issues, not cosmtics. Generally speaking, if you can get a Certificate of Occupancy, you can pass a section 8 inspection. I've been inside quite a few section 8 buildings in my time. It's not for the faint-hearted. The thing that usually keeps a section 8 tenant from totally trashing your place though is the fact that any complaints against a section 8 tenant by a section 8 landlord (or neighbor, or police) go in the tenant's section 8 file. Too many complaints, no more section 8 benefits for said tenant. Ever. Section 8 tenants are very well aware of this.
Anyway, in a neighborhood where section 8 housing is the norm, I myself would prefer all section 8 tenants. Let's assume a 3-family house, each unit with 3 BR, 1 Bth and each renting for $1,000 per month. Two units have section 8 tenants, one is vacant. As is typical, let's say that each tenant is paying $100 of the rent themselves, while section 8 pays the other $900. Given that the apartment, the building, and the neighborhood are by definition less than desirable, as I see it, there are only the following limited possibilities for filling that third unit - 1) get another section 8 tenant. Well, that's really about it because if a person can legitimately afford to pay $1000 per month on their own, they'll choose another area in which to live. Period. So, other than a section 8 tenant, what you're left with are people who somehow scrape together a security deposit, and from then on it's a monthly fight, whether they're leased up or not, to collect your rent, if you ever do.
So, the rent missed during the month or so it might take me to fill the vacancies left by insisting that all non-section 8 tenants are gone prior to closing, is nothing compared to the months and months of rent I'll miss while trying to evict the non-section 8 tenant who is now living in my property virtually rent free.
I don't have much actual experience as a section 8 landlord, but I've been considering it and researching it for a very long time. No matter what, all things being equal, I prefer section 8 tenants in a "section 8 area". But I'm still undecided about my current situation. Do I get rid of existing tenants (a bird in the hand) to fill the units with more reliable tenants (the US govt) or keep them (and end up with a handful of bird poop)? - Fri Jul 11 2008, 13:35