My client is renting a condo at a negative amount so each month he has to put in extra money to cover the mortgage. He was hoping for the market to come back so he could sell in a year or two. Now he lost his job and is moving from NJ to Minnesota for a new job where he will be making half the income. His tenant is interested in purchasing the condo as a short sale.
Would this be considered an arm's length transaction? Any other potential problems the SS Superstars can foresee?
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I had a tenant buy the home from her landlord with Wells (who uses some stringent arms length docs). It went very well and closed. The owner was already behind on payments. Not sure if your owner is already 30+ days past due already but loss of job and forced relocation are typically qualified hardships.
If your client is moving to the Twin Cities, I'm happy to help them get set up with a Rental, Rent to Own, or Contract for Deed.
Good Luck,
Nate
In todays market, what you describe is a perfectly logical lead generation approach!
The entire conversations of finding the buyer falls silent! We have one closing next week.
Sometimes the reality of it being a BFO (Blinding Flash of the Obvious)...is amazing!
We call that "Win - Win! Well done.
I recently closed a Wells Fargo short sale with my buyer as the tenant. No problems. All the arm's length aggreement is interested in is that no one may be related to by blood or family in-law, or in a business affillation. The fear is that one of the parties (seller or buyer) will do the other a favor by discounting the sale price for personal gain.
The Arm's Length Aggreement, however, in my opinion is somewhat vague and easy to manuever around if one wants to be creative enough.
Hi James. One of my present short sale transactions is the tenant buying the house from the landlord. It was disclosed and the At Arm's Length document was signed by all parties and provided to both the 1st and 2nd lien holders. We even added the Buyer's address on the HUD, which was obviously the property in question. Both Chase as a first, and Bank of America as a second, aproved it. What a piece of cake this transaction was compared to so many others. So go for it, I'm pretty certain you'll be fine. Isabelle
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