Suggestions for dealing with current owner who does not want to leave?
I am set to close on a short sale next month. However, the current owner who is losing the house does not want to move out because he is living rent free and wants to continue doing so for as long as possible. He is threatening to let it go to foreclosure, in which case we lose the house. We proposed the idea of renting the house to him, though he has not responded and we do not think that he will want to do that either, since he has not had to pay on the house for two years and do not think he wants to start now.
1. Even if we work out some agreement for him to pay us rent for a month or two, what type of guarantee can we create that he will have to move out after the month or two is up? Any suggestions? Maybe have him put up some sort of collateral? Have any of you heard of anything like this before?
2. Any other suggestions for how to deal with this?
Thanks!
Replies to This Discussion
-
Permalink Reply by Gabe Sanders on
-
First, you will probably not be able to rent back to the current owner as in almost all cases there is an arms length agreement that you'll need to sign prior to completing the short sale. You can ask the lender to allow this, but it's doubtful.
Now the fact that it's a short sale means that at some time the seller has agreed to this sale, agreed to your contract, etc.
So you have lots of legal recourse against him. Unfortunately, it's civil and in most cases this is handled by monetary judgements, and if the seller has no money, suing him won't help. If he does have some money you should be able to scare him enough to get him to cooperate with the sale. If in your state, with your contract, you might still be able to close and then have the appropriate sherrif, police, etc. evict the now former owner.
Your best bet at this time is to seek competent legal advice in your state.
-
Permalink Reply by Wendy Smith on
-
don't close until the seller vacates - how about cash incentive comparable to HAFA relo assistance? payable at closing, after a pre close walk thru of course.
-
Permalink Reply by Linda Gregory on
-
I am wondering why he can' be held to perform on the purchase contract? Technically, I would think he is bound legally to perform on the contract? If he signed off on the offer and that contract is executed...
I would definitely seek legal and/or your Broker's opinion on whether he can be made to follow through-it is quite a hassle as everyone has said-and it depends on how far you would like to take it-
What he is doing is unconscienable. I really feel for your situation-I a not quite sure if you are his Listing Agent, Buyer's Agent or transaction Broker.
One thing for sure, after what he has said, I wouldn't trust him to a rental agreement at all...and as someone pointed out, his Lender may not allow it...and more to the point may even include a document to be signed attesting that he will not be sold the home back and will not rent.
Good Luck.
-
Permalink Reply by Alejandro J Morin on
-
If i were the buyer, i would ask an attorney to write a letter to the seller and to the seller' lender (and the seller's negotiator) advising them the buyer's readiness to close, and seller's rejection to close is a default of the sales contract, and the attorney can add his/her legal language customary in these matters that when read by the seller they may not want to risk cancel of the sale closing and risk their lender being aware of their ill actions. This documentation may be your last resort to influencing seller to close, with an additional letter for demand of broker fees to seller's agent and investigation. Verify your documentation is in order and take action, what do you have to lose...good luck! This is not legal advice but a broker giving his own business experience responses from past files and caution is given to seek the advice and direction of a real estate attorney for your specific situation as all situations are different and many important details of this case are unknown and specifics to your state laws and real estate regulations are necesary to summarize course of action by an attorney.
-
-
Excellent answer-and that is what I would do-I believe the Seller has gotten away with some bully tactics and it's time to call him on it!
Alejandro J Morin said:If i were the buyer, i would ask an attorney to write a letter to the seller and to the seller' lender (and the seller's negotiator) advising them the buyer's readiness to close, and seller's rejection to close is a default of the sales contract, and the attorney can add his/her legal language customary in these matters that when read by the seller they may not want to risk cancel of the sale closing and risk their lender being aware of their ill actions. This documentation may be your last resort to influencing seller to close, with an additional letter for demand of broker fees to seller's agent and investigation. Verify your documentation is in order and take action, what do you have to lose...good luck! This is not legal advice but a broker giving his own business experience responses from past files and caution is given to seek the advice and direction of a real estate attorney for your specific situation as all situations are different and many important details of this case are unknown and specifics to your state laws and real estate regulations are necesary to summarize course of action by an attorney.
-
-
Give him a few hundred bucks. I've had to do that a few times to get the seller out.
-
Permalink Reply by Trina Gonzales on
-
Honestly, your situation is common with shortsales. Unfortunately, there are people who play the system. Sounds like this is yours. These people sound like they know what they're doing. They probably don't intend to cooperate and perform. Get your CAR forms and call their bluff. If they continue to act like they're acting, get out. Eviction issues are hard! When I enter contract with buyers and sellers I do a conference call with each side and their agent to confirm that everyone understands the process. After we've obtained written approval and all buyer contingencies are satisfied, I have my sellers vacate just before the buyer's final walk through. Best of luck to you...
-
Permalink Reply by Tni LeBlanc (805) 878-9879 on
-
The new buyer can still go forward with the sale.
He or she can then evict the old owner and sue them for damages under the contract he signed. Then good luck to the seller/freeloader in finding a rental with an eviction AND two years of a bad payment history.
Buying a short sale home is not a game of chicken for the buyer. The seller will leave, the question is just how.
-
-
Stanw,
I am not an attroney and am only offering personal opinion below.
I would never, EVER enter into a rental agreement with someone with a proven track record of not paying a mortgage; this idea is quite foolish, IMO. All indications to me are that this seller would never pay the rent, and I would expect an eviction in CA (where eviction proceedings favor the renter) to take up to 6 months; you can easily research this and I encourage you to do so. I very much believe that you will be letting yourself in for many, many months of misery, much extra cost to attorneys, and probable damage to the property if you rent to this seller.
Besides, the standard home mortgage you would obtain for your own home will very likley prohibit you from renting the property. It may allow it for a short time, but mortages for rental have to be for property classified for that purpose, and will likely carry a higher interest rate. Be careful on this part if you are obtaining a new mortgage on this property, and have any intention of renting, even for a short time. If you are not clear about this with the mortgage originator, you may be guilty of fraud.
You have asked several questions about how could this seller have any motivation to damage his/her credit history. You have to either accept that this person is/has become a deadbeat and/or minor scam artist, intentionally using the steps of short sales and foreclosure proceedings to live rent-free, or has been through such a horrid economic experience in the last few years that they don't care any more. IMO, you need to assume that this is the case and protect yourself. Regardless of their reasons and circumstances for this behavior, you need to realize that this person is not like you (you seem to be responsible and reasonable); there are plenty folks out there who will cheat others, and this sounds like this is the case. IMO, It is time to stop being naive about this seller.
The best advice I have seen in this string so far is to engage an attorney and write the letters to try to force completion of the purchase contract. But here's is an important question to you: Have the bank and the other lenders, investors, etc., actually agreed to final terms for the short sale, and the seller is just balking at signing the agreement? You need to be clear upon this point; you only say that you are ready to close on the short sale. If this is the situation, then the seller has every right to reject a short sale completion agrrement with any terms proposed that he/she does not like, or cannot comply with. (Examples: seller cash contribution at closing, seller signing up to a promissory note, etc.)
Unfortunately, I believe that info that the only good legal recourse mentioned so far for the seller's failure to cave into threats to complete the sale (IF HE/SHE HAS SIGNED OFF ON THE FINAL SHORT SALE TERMS) is a civil suit with money damages, which will likely get you nowhere IMO. So, if this course of legally framed letters does not get prompt results, then it is time to either:
- Move on to another property.
- Consider the prior suggestion of a cash offer as an inducement to the seller to move out, payable only xx days after they completey leave the property, after the closing is complete, and the deed is recorded in your name. AND, change all the locks on the day you take possession !!!! I personally would NOT take the course of a cash inducement offer, as it is no gurantee that they will agree, and this is a way of further encouraging this seller's bad behavior to demand even more. If I did this, I would give them only a few days to agree; i.e., have a short expiration date on this kind of offer. AND I WOULD ONLY make this make this kind of offer through an attorney; the attorney may know of a good reason to NOT do this. A realty agent should not tackle this type of offer on his/her own, IMO, under these circumstances.
Good luck....with this guy/gal, you need it. IMO, this type of case IS the right time spend money with an attroney; it is money well spent to protect your, and I would spend $$ to avoid losing many, many more $$. I know this situation seems unfair (And it is!), but you appear to be dealing with that type of dishonest and scheming person. If you are set on this property, then you have no really good path IMO unless the seller caves into a legally framed letter. And sorry for the long reply, but this situation set off alarm bells in my head when I saw the idea of renting to being proposed under these circumstances.
-
Permalink Reply by Bev Dudley on
-
Sellers have no motivation to move with a short sale or foreclosure, check with the sellers lender to see if the seller will qualify for the HAFA program that will give the seller up to $5000 at closing for relocating. This has worked for me on more than one occasion and motivates the seller.
-
Permalink Reply by Bill Travis on
-
Offering a cash for keys may be a solution. The cash would be paid after the person moves out, and after close of escrow, and leaves the property broom clean. It would be inspected by the buyer and the seller, and the cash and keys exchanged at that moment.
The FTC MARS program allows the seller to back out at any time prior to close of escrow, without being in breach of contract.
It appears the seller is just playing the system and has no intention of moving until he's forced out. If he doesn't accept a CFK deal I would walk away and find another property.
-
-
Have you tried suggesting HAFA for the homeowner? There is $3,000 usually at stake if he agreed to move.
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons