I started renting a house two months ago thats $2,500 a month. I recently have been seeing mail to the landlord that is notifying him that the house is under foreclosure and going up for a sheriffs sale in the near future. The house was purchased in 2010 for 650k and I'm really interested in trying to purchase the property. Any advice on steps to take?
You should keep making rent payments to the landlord, but should probably also contact the lender to get more information. You may not get far with them. Contact the landlord as well and ask what is up.
Also is it possible to negotiate a short sale with the bank? i wouldn't have enough captial to buy the property at auction.
Contact the owner and see if you can negotiate a sale. If not, try contacting the bank directly. If that doesn't work, start looking for another place to live.
@Jay Len - consult your attorney. if the house is being foreclosed, the owner isn’t paying any portion of your rent payments to the bank. I know that if you’re still in the property after the sheriff sale and your landlord doesn’t own it anymore, you don’t have to pay your former landlord. Right before the public sale and loss of ownership, you could ask him/her to rewrite your lease at like $1200/mo for 2 years. It may or may not be valid. The bank or investor who bought it may offer you a couple thousand $$ in cash for keys to move out. It all depends on how cooperative you are with the agent who comes to talk to you. Some people live in houses for years without paying rent or mortgage. I don’t know when you’d get eviction filed against you.
If you want to buy it as a short sale, call the bank and/or call a real estate agent specializing in short sales to see what the property is worth, how much is owed, etc. I tried to buy a short sale for 60k and bank wouldn’t sell it for less than 80k and it ended up at sheriff sale anyway.
Advice about talking to the bank is useless....they can not and will not tell you anything.
A below market lease is not enforceable at all, even with a market rate lease you’ll have 90 days protection at best...it is state specific.
Many lenders will not allow a short sale to a tenant. You’ll likely be offered cash for keys if the lender takes it back. You likely wouldn’t be able to remain in the home as a tenant, if the bank gets it back at auction and you want to buy it....they want it empty to put in on the market, but maybe it would work out if the bank puts it on auction.com as an “occupied property”, but unlikely..