Hi Bay_Area and thanks for your note.
As a person who often represents the buyer in a short sale, I've often had occasion to talk with the sellers to find out where they're going to go after the home is sold. Since all of them know I'm genuinely curious, most tell me that they were able to secure a rental after the home is sold. Of my four most recent short sales, all four were able to find rental homes--two are still in the area, not far from their original homes, 1 has moved up toward Oakland, and one moved to Tracy.
Since I, too, have been a landlord of a rental property in San Jose and understand exactly your concerns about credit, I did ask each how they were able to secure a rental situation since their credit was obviously damaged by the short sale. Not surprisingly, at least two of the sellers were able to get a rental thanks to the help of their listing agent. The other two were, on their own, able to speak frankly and openly with the landlord who agreed to rent to the sellers. Almost all of them told me that having a current job and documentable income was the reason that they were able to find rental units.
But more than that, Bay Area, I think a lot of the "stigma" associated with individuals who have sold their homes short has fallen to the wayside. Almost everyone understands that there are homeowners who have been displaced from their homes due to the decline in the market, and there is not the associated "blame" that one might assess to a short seller in trouble as one might with a person whose credit was damaged by a series of lost jobs, poor management of credit or bankruptcy. In fact, there seems to be a general feeling of sympathy toward anyone who was unable to retain their home, so that landlords are not nearly as reluctant to rent to a distressed homeowner as they would to in another time or circumstance.
As to your final comment about "short selling" beling so common that its "no big deal," I would argue that to those who have to give up the dream of home ownership, none would tell you that they feel the decision they've made was done lightly, without grief or sorrow, or without trepidation. I've seen the people who lose their homes in short sale and foreclosure and, frankly, these are really nice people who got caught up in an inflated market and are giving up their dreams to get out from under burdens they can no longer pay to maintain. It's heart breaking, and it can be one of the most difficult things for any Realtor to have to witness. It's easy to think that short sales are just someone's way of getting our a mistake, but until you get up "close" to a transaction of this type, you can't know the pain some of these people are enduring nor would you endorse that a person is simply walking away from their obligations.
So that's my take on the short sale. I'm not trying to be maudlin or defend the process, but simply to say there is a human face to each of these transactions, and while you may not be comfortable renting to a short seller, there are many landlords who do understand this situation and will give the seller a chance and a place to live while their credit and the economy improves. Okay?
Area Pro Realty-People's Choice