Short Sale Closing

**qube** · 01-23-2010, 08:40 AM

So i have a question here an offer for my short sale has been accepted. There are tenants in the property and I was made aware that they wanted to stay in the property. Now my agent has told me he offers property management services and I think he thinks I'm going to use him. I have not officially said I will. Escrow has not yet closed yet but I may want to rent out the property myself without my agent's help. How do I go about this? Every time I ask about the tenant's info he said that these things need to be kept separate and would need to go through the listing agent since they are paying rent to the original owner of the house? Basically i feel like he's pushing me into his property management service.

**Greg** · 01-24-2010, 06:19 AM

Before closing your agent needs to supply you with the renters contact info and the terms of their lease.

Don't forget to get the renters security deposit from the seller before closing because when the renters leave they are going to want it back from you.

**qube** · 01-24-2010, 01:55 PM

My real estate agent is saying that the security deposit is between the tenants and the original owner of the house and they (the tenants) should deal with them themselves.

However if I do rent it out to them I would create a new contract therefore a new security deposit would be needed.

My agent is not giving me tenant information saying that it needs to be separated from me(the new owner) and the only way I can contact the tenants would be contacting the listing agent...

**Greg** · 01-25-2010, 05:54 AM

Originally Posted by qube

My real estate agent is saying that the security deposit is between the tenants and the original owner of the house and they (the tenants) should deal with them themselves....

Your agent is wrong. If you don't address this now it wiil be too late after closing. If the seller does not give them their security deposit then you will have to give it to them when the lease expires. If the seller gives them their security deposit how will you be able to prove it when the renters ask you for it.

Originally Posted by qube

However if I do rent it out to them I would create a new contract therefore a new security deposit would be needed.....

If they have a lease you will have no choice but to rent to them. You can not kick out renters when you buy a house unless there are provisions for it in the lease. If they have a valid lease you can not make them sign a new one until the old ones expires. Renters have a ton of rights and most of them know it.

Originally Posted by qube

My agent is not giving me tenant information saying that it needs to be separated from me(the new owner) and the only way I can contact the tenants would be contacting the listing agent...

Your agent is either lazy, clueless or not being honest with you. Talk to the owners and get a copy of the lease. Talk to the renters and see how much security deposit they paid, do they plan on staying. If these renters have a valid lease you will be obligated to follow it so you had better find out what it says before you take over the obligation.

Some agents will tell you that it is illegal for you to talk to the seller or the tenants whcih is ridiculous. You need to be aware of what you are getting into.

**qube** · 01-25-2010, 09:00 PM

Greg,

I must say that you have been very helpful in answering all of my questions. Problem here is that it seems I have no way of contacting the seller my agent won't provide info to me saying that I must go through the listing agent. As of right now I am getting my inspections done this week and having a tough time with this tenant since I have had to reschedule twice....it is getting rather annoying...I will try to find out how the lease agreements are however when i toured the house the agent told them not to speak to me about rental agreements...it seemed really shady to me however this house is a great deal

**qube** · 01-25-2010, 09:10 PM

Oh yeah my agent told me that if I decide not to rent my house to them that they must leave 48 hours after escrow ...and greg from what you're saying this is troubling me quite a bit

**Jim Erickson** · 01-26-2010, 07:21 AM

I will give you a second opinion. Listen to what Greg has said.

No matter what your agent tells you, it is highly recommended that you obtain a copy of the lease (has signatures). This lease and state tenant laws will determine what happens to the tenants. A transfer of property ownership will not override these.

Also as Greg mentioned, you should get the security deposit. If not, you will be responsible for returning all or part to the tenant when the lease expires.

I am not giving legal advice and am not an attorney. Make a call to the state authority of tenant laws.

**qube** · 01-26-2010, 02:45 PM

Ok i talked to my agent today and he told me that since this is a short sale...the owner as well as the tenants have given up their rights. That before a house becomes a short sale the owner as well as the tenants have to sign a contract giving up their rights also cancelling out their lease terms. Upon a successful sale, the bank will give money for the tenants to move as well....someone confirm this please?

also i'm trying to get some lease information from my agent

he says it is a contract and the parties don't have to disclose anything if they don't want too....they have not given me or the listing agent any information

**Greg** · 01-27-2010, 06:19 AM

If the tenants have signed anything that gives up their rights then you are entitled to a copy of it along with the lease.

You know where the tenants are, go talk to them and let them know the agents are saying they can be kicked out in 48 hours.

The sellers are on the tax record or the tenants know where they are, they are paying rent, aren't they.

Most states have laws which override any such agreement. Tenants have rights.

If the house is really a great deal then don't worry about the security deposit or collecting rent from the tenants for the next 6 months while you try to evict them.

Your state real estate commission should be able to enlighten you about your rights to a copy of the lease and the renters rights.

**BoiseRealEstateSoup** · 01-27-2010, 06:58 AM

Tell your agent to suck lower.

The lease is with the property not the owner PERIOD.

Contact your agents broker and demand that you get a copy of the lease and if they wont get it to you call your State Real Estate Commission and file a complaint.

Then, I would contact the title company and tell them that you need the contact information for the sellers agent and their clients. They will most likely provide the information to you.

No offense, but your agent is an idiot and most likely lying to you about the who scenario. If you guys have followed me online, you'll know that I detest throwing other agents under the bus, but this character is someone who has his head completely up his .....

Are you buying this property as an income property? Do you want tenants? Do you want to be liable for a deposit?

Not only would I be firing your agent right now, I'd be getting ready to hire an attorney to seek damages for misrepresentation and breach of contract. He should go back to selling used cars......