Renting while waiting for SS approval

I have a buyer that wants to rent the property from the seller while we are waiting for the short sale to be approved. Lender hasn't asked for an ALT affidavit to be signed yet but in the event they do, would this be considered a violation of that affidavit since there is a separate agreement between buyer and seller outside of the contract for sale and purchase?

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Permalink Reply by Tara Samney on April 9, 2012 at 10:41am

I wouldn't advise my seller to touch a rental agreement on a short sale (from a listing agent perspective).  The reason is if it falls through it could complicate a deed-in-lieu or listing for another short sale if renter needs to be evicted.  instead, I've used possession agreements where buyer pays $0 and good until closing.  Things can go south quick....i'd be cautious about a possession agreement if there wasn't at least a verbal or were in counters and buyer knew he/she could offer to net minimum. I wouldn't do one unless we were far along and out of options .

Permalink Reply by Smitty on April 9, 2012 at 2:24pm

I've done this, but only as a use an occupancy.  We did not want a tenant landlord relationship.  That said, I agree 100% with Tara, that I think this could REALLY complicate a short sale.  I did it and it was successful with hiccups, but I really think this should be avoided.

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