Thanks for the  post. I will bookmark this and share with others.

I think short sales are so unpredictable sellers need to be ready to improvise!

Kathleen, 

Love the way your shared this information.  Yes, you will have to pay rent, but look at the bigger picture- debt forgiveness.  Should be a no-brainer.

All the best, Michelle

Kathleen, the new owner is giving them a great deal to stay until their apartment becomes available. Great response!

It does not sound like the seller is motivated to move.  The seller is luck that the bank has agreed to allow him to rent their house back.  Most lenders do not allow this in a short sale.  The seller is luck again that the buyer is willing to lease the property back to them at a reduced rate.

Good luck with this one

yes you do to the title of the post...I currently have a client that just purchased and has to evict the tenant in possession....The tenant feels they are entitled to everything....after living rent free for 18 months

Kathleen, Great post, and this is true in Denver now too.   We were one of a few States left where the seller could remain in the property up to 3 days and not pay rent.   That changed this past January, and now have to have a Post-Closing agreement signed by all parties with utilities, rent, and deposit all addressed!

Thank you for sharing this is an awesome post with alot of great info Have a blessed day

These trying times always create such interesting situations. Everybody tries for the best and hopes it works out.

Sometimes folks are way more concerned about themselves, and give little thought to how a situation may affect others.  These sellers are very lucky to have a buyer who is willing to give them some time.

You bring up good points. There is so much misunderstanding in regard to these matters. Often, this sort of lack of information is what got the sellers into hot water regarding their mortgage in the first place.

Kathleen: My "Affidavit of "Arms Length Transaction" with Chase on a short sale that I completed earlier this year included this statement:

"There is no agreement, whether oral, written, or implied between the Seller and the Buyer and/or their respective agents that would allow the Seller to remain on the Property as TENANT or regain ownership of the property at any time after the consummation of this sales transaction."

I am sure you must have other circumstances that allow the seller to stay.

Although Seller leasebacks are becoming more common, it seems that Sellers frequently have difficulty understanding the leaseback from the Buyer's perspective.  The leaseback can be an act of kindness on the part of the Buyer.  It is also a liability for the Buyer. The referenced transaction is definitely an example of the great value of a Seller leaseback.

Kathleen, now that is something to take into consideration for buyers in this situation.  I haven't had that happen, but it's nice to be reminded of the possibility. 

Kathleen, this scenario is the same regardless of if the sellers were in a short sale or just a conventional sale. When they occupy the home after close of escrow, the new owner has a right to compensation in the form of rent for allowing the former occupants to stay for a determined period of time. In short, no one can live for free, anywhere, unless they go back home to Mom's place, and even Mom is getting smarter.

Always good information that San Jose Realtor Kathleen Daniels shares.  Good stuff.     

Good information that you post, as always.  Glad to be reading the stuff you write.