Owner of the property where I live just received a short sale offer. Does this postpone the auction date?

Asked by andreapasley, 92128 Sat Jan 5, 2013

I had another question earlier, so refer to it to understand the situtation. Owner came by today and still wants me to pay rent regardless. We allowed the property to be shown and they received an offer today on their short sale. Does this postpone the auction automatically? Why should I have to pay rent if I have to move anyway? I don't have a lease agreement. We are month to month.

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7
Suzanne Hule…, , San Diego, CA
Sun Jan 6, 2013
Hello Andrea--An offer in a short sale situation does not stop the auction date unless the lender agrees to postpone it. It often takes lenders a little (or, more often, a lot of) time to respond to an offer in a short sale situation.

Of course, the owner wants you to continue to pay rent but he/she is almost certainly NOT paying that rent to the lender. I would never advise that you NOT pay the rent but maybe you can work something out with the owner that you will pay for the number of days you are allowed to occupy the property on a pro-rated amount, thereby upholding your end of the rental agreement.

Just noticed you have many similar responses to your question. Best of luck and I, too, would start looking right away for another home.
0 votes
Jerry Heard, Agent, San Diego, CA
Sun Jan 6, 2013
As long as you live there you have to pay rent. If you had a lease it would typically revert to a month to month agreement which you affirmed by staying in the home. If you fail to pay you could be subject to legal action by the owner.
Just because the owner accepted an offer does not postpone the foreclosure proceedings. Many times lenders will stall the foreclosure to allow the short sale. There may be some advantages for the bank to dispose of the property through short sale rather than foreclosure. You should contact your landlord and their agent for more information.
If the bank does foreclose then you still have certain rights as a tenant. The bank has to give you 30 days notice but you are still responsible for paying rent to the bank as they direct you.
Maybe you should consider buying a home so you will not be face with these challenges.

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0 votes
Cory La Scala, Agent, San Diego, CA
Sat Jan 5, 2013
Hi Andrea,

Even though you don't have a year lease anymore, you still are on an implied month-to-month tenancy, and are required to pay rent, because you didn't move out after a lease expired. The seller can successfully sue if you stop paying. You're living there, so you owe rent. Sorry!
0 votes
Kevin Sander…, Agent, San Diego, CA
Sat Jan 5, 2013
HI Andrea,

You still have to pay the owner rent because you are under contract to do so as long as the owner still owns the home. Your contract is completely separate from the agreement the owner has with their lender. You may not have to move out. You need to find out if the buyer is planning on living in the property or keeping it as a rental. I am available any time with any further questions you may have about your situation. Your best resource right now will probably be the owner and their realtor to advise you of the situation.

Kevin Sanderlin
Keller Williams Realty
kevinsanderlin@gmail.com
Cell 858-212-4702
0 votes
I just saw that the buyer wants to move in. Might as well start looking for a place to rent now. You still may have 1 to 6 months, but the sooner you find a place, the less stress you will have.
Flag Sat Jan 5, 2013
Paul Hartley, Agent, San Diego, CA
Sat Jan 5, 2013
As Beach Broker Bill said, the seller's receipt of an offer does not necessarily postpone a foreclosure sale. There are many variables over which you have no control. If you are not planning to buy the property you might consider moving. If you are indeed on a month to month rental agreement you need only give a written 30 day notice that you are leaving. This can be given to the owner on any day of the month, not necessarily on the 1st. This way you control the timing which makes a move less of a burden.

I would say that it your responsibility to pay the rent per your rental agreement regardless of the owner's troubles but again, I agree with Beach Broker Bill that you may be able to negotiate a reduction of rent for being flexible in allowing the owner's REALTOR to show the property. If you fail to pay your rent it is possible for an owner to get a judgement against you for that amount plus court costs and late fees. Don't forget to consider the disposition of your security deposit in your plans.
0 votes
I know that this is a speculation however what do you think it is the likehood he will get a judgement against me? Is that in his best interest? I take care of the place like it was mine, I pay rent on time, I don't bother him with anything. All I want is some time to save money and put a deposit and first month's rent in another place. Thanks
Flag Sat Jan 5, 2013
Cindy Davis, Agent, San Diego, CA
Sat Jan 5, 2013
I agree with Bill. The fact that you are trying to use this vehicle as a way to communicate with your landlord seems a tad bit absurd to me as well.

Call the owner directly! You will get much better answers to your questions :)
0 votes
I appreciate your input Cindy however where did you get the impression that I am trying to communicate with my landlord through this postings? And that's not what Bill said at all. For your information I have talked to him today as a matter of fact for one hour. I am using this to get OTHERS input, not the landlord.
Flag Sat Jan 5, 2013
Bill Hays, Agent, Cardiff, AL
Sat Jan 5, 2013
If I was you, I would be talking directly to your landlord's real estate agent and get regular updates. An accepted offer can (but not always) delay the sale, but there are a lot of variables including the amount of the offer and the capability of the short sale negotiator. You want to know what the terms of the offer are as they relate to you. Is this an investor offer or a family who plans to move in?

You also might consider negotiating with your landlord on the rent side. If you walk, your landlord has a bit of a problem unless your place is super nice and move-in ready. A vacant house is not a good thing for a landlord - you are an asset. The question becomes why should you pay rent if they aren't paying the mortgage? You can leverage your value by talking to them about a reduced rate for the value of your tenancy. I let a tenant stay 10 months free just so my listing wasn't vacant and so it would be taken care of. It worked nicely and I didn't have to deal with squatters. The bank wanted to know if my seller was collecting rent anyways, and guess what, the bank would have taken it if we were collecting rent.

Bottom line, do things on your terms. In other words, if you can't get a discount on rent - your future is clear, you are moving out sooner rather than later. Don't wait - start looking now and get a new place when you aren't in a pinch to do so.

If you contact me directly, I am happy to keep tabs on the bank sale dates and let you know when I see extensions being granted. Either way, if it does sell on the 25th, you are not kicked out. You still have your rights as a tenant and as Jim said on your other thread, you may be able to negotiate some cash from the bank to move sooner rather than later - but again, moving in your time on your terms is the more prudent approach.

Good Luck!

BeachBrokerBill
CA DRE 01775528
0 votes
Thank you Bill this was very helpful. I am registered with the place that is conducting the auction on the 25th so I can get regular updates. I have been in contact with the owner's realtor as well. The people that put an offer in just came in today because we allowed them to come in without an appointment. And they are a young couple moving in, not investors.
Again thank you for your input, very valuable.
Flag Sat Jan 5, 2013
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