What is a short sale exactly and do you need a down payment? I am currently renting a house going into short sale.

Asked over 4 years ago - Brighton, MI

I would like to buy this home but have no down payment and no money to move in 30 days. I had no idea this house was being foreclosed on and have only been here since January.This is a major inconvience for my family. I would like to rent to own or something but don't know how to get a hold of the bank.

Additional information

What is a intra-family transfer?

Attorney answers (3)

  1. Glenn R. Matecun

    Contributor Level 12

    Answered . A short sale is where the house is sold for less than the current loan amount and the bank releases the mortgage and allows the sale. If you are a tenant, you have certain rights. You would not have a superior right against a bank. However, in the event of a short sale, the buyer would take the property "subject to" your lease. That means the buyer must honor your lease and can't evict you just because the property has been sold. If you are on a month-to-month lease, the landlord (or buyer) can evict you at any time with 30 days notice.

    Regarding an "intra-family transfer", that means a transfer between family members. Normally banks don't allow short sales between related persons. Too many opportunities for abuse.

    All short sales I have been involved with have been "cash deals", meaning that the buyer would bring cash or a new mortgage. In my experience, the bank will not do a short sale with a small amount down or a promise to assume the existing mortgage. Good luck.

    Glenn R. Matecun
    Michigan Estate Planning Attorney | Michigan Probate Lawyer
    www.MichiganEstatePlans.com

    Toll Free: (888) 487-6150

    DISCLAIMER: This response is not legal advice and does not create an attorney/client relationship or any right of confidentiality between you and the responding attorney. This response is intended only to provide general information. Attorneys cannot evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.

  2. Kurt A. O'Keefe

    Contributor Level 10

    Answered . I have a video post on my mortgage blog explaining short sales and second mortgages,
    http://www.michiganmortgageattorney.com/?s=shor...
    The bank cannot talk to you until after the foreclosure process is complete, until after they own the house.
    You have to go through the owner now.
    You might be able to get a realtor to help you.
    You have nothing to lose by contacting the owner about selling to you.
    The owner will have to work out a short sale with the mortgage company.

  3. Kevin James Griffith

    Contributor Level 10

    Answered . A short sale is a transaction where the bank(s) who have a mortgage on the property approve a sale of a property where they will not recover the entire amount owed. As an example, a bank has loaned the owner of a house $500,000 secured by the house. The owner is unable to make his payments, but can sell the house for $400,000, with the bank's approval, this transaction can go through.

    You do not want to contact the bank on this, you will want to contact the realtor who is selling the house. They will usually be able to tell you if you can qualify as a purchaser.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

26,454 answers this week

3,029 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

26,454 answers this week

3,029 attorneys answering