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Life After A Short Sale.

By
Real Estate Broker/Owner with Southern Living Realty Partners TN Lic# 266926

Where will I go after my home sells? Where will I live?

In the middle Tennessee area, the rental market, especially for single family homes, is strong. There are a lot of out-of-town landlors and investors who have properties that have been vacant for months. The availability of vacant houses in your immediate neighborhood is probably high right now. Your new rent payment may actually be lower than your mortgage payment. The landlord may require a larger than normal deposit and this is where cash is important. While you are going thru your short sale, you need to be saving as much money as possible. Even with mortgage lates on your credit report and a lower credit score, there will be landlords who will rent to you with the larger cash deposit.

Another good option to consider is a rent-to-own or lease-purchase property. In this scenario, nice single family homes are available to be rented or leased first, normally for a period of 12-24 months. A portion of monthly rent is credited to the buyer towards the purchase of the home. For example, if the rent is $1200 per month, $200 may be credited to the buyer each month towards the purchase. The down payment or deposit is normally larger on a lease-purchase than on a simple rental but this deposit also goes towards the purchase price. At the end of the lease period, the buyer purchases the home from the seller. The down payment is already in place from the deposit and the monthly credit. During this time period, the renter should be working on repairing their credit so that they can be approved for a mortgage at the end of the lease. This can prove to be a fast way back to homeownership following a short sale.

Posted by

Southern Living Realty Partners Logo

Rhonda Burgess, Broker

615.554.0832

 

Dr. John McMillen
Clovis Real Estate - Clovis, CA

Again, another good post.  Keep the info coming!

Sep 19, 2009 07:48 PM
Bob & Leilani Souza
Souza Realty 916.408.5500 - Roseville, CA
Greater Sacramento Area Homes, Land & Investments

Great post, Rhonda! My biggest concern with lease options is the status of lending institutions when the lease period expires and the renter is expected to purchase the home. Will the renter/buyer be qualified and approved at that point? That's a tough one to predict based on the volatility we've seen in the last few years.

Sep 19, 2009 08:20 PM
Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Terms for a lease w option to buy may not be favorable to buyers right now. . no one predicts prices to skyrocket in a couple years. .but sellers want premium plus for their properties.

in this case, you buyer is more likely to refuse the option. .

why pay above market monthly payments when you know that the option may not be exercised? 

Sep 19, 2009 11:19 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

  There is no crystal ball available for home prices...if a short sale is a part of a sellers transaction...ask the realtor to write a letter to perspective landlords..divorce or under employment doesn't make the prospect a bad tenant.

Sep 19, 2009 11:45 PM