Potential first time home owner looking to rent then buy on a short sale

Asked by Steven G, Miami, FL Tue Jun 16, 2009

I have several concerns before i sign the paper work to rent...1. if the unit is sold to a new owner on short sale, do they have to honor my lease? 2. If the unit is either sold or foreclosed on, can i get my deposit back (the maintanance fees are being paid still)? 3. The list price is 198,000 (condo), would a good offer be 20% below that on a short sale? 4. My income is between 45k-50k this year, my girlfriend/wife's (dont ask) income is around 40k. With my credit being outstanding and hers being middle of the road, is this affordable with $530 a month in condo fees?

I am so completely lost in the process as I have always rented and never owned; I am especially concerned with this being a short sale... Any help would be appreciated

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Nayla Benitez, Agent, Miami, FL
Wed Jun 17, 2009
Hi Steve,

Like Wendy stated, usually the lease will stipulate whether or not the new owner will have to honor your agreement or not so make sure you read it carefully. If it's an investor buying the property odds are that he will be fine with it being rented. On another note if the unit gets foreclosed on there is a chance you may not see your deposit money back- when an owner goes into foreclosure his credit is ruined and odds are you will not hear from him again specially if he has no plans on returning your deposit ( I have seen it many times in this market). I think it's a good idea you find out what the situation is with the owner of this unit- you dont' want to see yourself in a situation were he is renting the unit to get some rental income and walk away.

If you are thinking on buying the unit from him then any realtor can get you comparables on the property and your offer price should be based on the comparables, you see most of the property sold today are foreclosure or short-sales so the prices will reflect that of today's market. However before you make an offer you should really sit down with a loan officer or Mortgage Broker and see how much you can afford to buy and get a pre-approval from them- this will make your offer stronger as owner will see that you have been qualified to make the purchase. If you are making the purchase with your girlfriend than both of your income and debt will be concidered in the loan amount granted.

Good luck!

If you have any questions feel free to call me.

Nayla Benitez
786 853 2333
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Wendy Taylor,…, Agent, Beverly Hills, CA
Wed Jun 17, 2009
Hi Steven

Great questions! 1. Leases go with the property. Yes, they have to honor it unless there is a clause in the lease stating otherwise. 2. Your deposit is part of your contract. It should be kept in a separate escrow account for your benefit and returned to you upon termination of your lease minus any damages. 3. Your determination of the price should be based on previous sales in the building, comparable sales within the last 30 days and how important the unit is to you. 4. Are you both going to hold title? If so, your combined incomes less your other consumer debt (the unknown factor here) needs to be calculated. A mortgage is based on PITI - principal, interest, taxes and insurance and in your case add HOA. Guidelines are swinging back to more conservative points of views - it is the total debt that you owe along with your FICO scores that will determine how much is the "right" amount.

Good luck!
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