I’m playing the role of guinea pig to find out the answer to that question. For over two years, my husband and I have been renting a home we knew was heading towards foreclosure. From the beginning, we told the property management company that we would like to buy the house once the foreclosure plays out.
Currently, the property is in a trust set up by the law office who controls the house. The prior owners gave up their rights to it when they filed bankruptcy. We have tried to communicate with the attorneys on both sides, even sending an official purchase offer, to no avail. The “bank” in this instance is FHA, which makes it even harder to find a real human to talk to.
I’ve talked to every professional I could find to see what our rights are and what will happen to us when the house is sold at auction next week. Several scenarios have been suggested.
On June 2nd, 2015, Governor Rick Scott signed into a law some protection for tenants, requiring a 30-day notice to vacate with written notice. OK, that’s better than the almost immediate eviction that could have been possible, but that’s still not enough time to close on another house if we can’t buy this one. Closings usually take about 45 days these days.
Another scenario is called “cash for keys.” This is a situation where the bank has taken back the property and provides an incentive for the renters to get out and leave the place in good condition. I’ve heard mention of around $3000. So, I guess if we have to leave in a hurry and are not given first rights to buy this home we’ve lovingly maintained, then a financial incentive would ease the burden of moving.
At the foreclosure auction, properties can only be bought with cash. You have to have 5% to put down right then and there (in cash or cashier’s checks) and then the balance is due by 2PM that same day. I’ll be at the live auction in Seminole county next week to see what happens and talk to the person representing FHA. FHA sells all its bank owned (REO) properties on its website homepath.com, but I understand a house can sit empty literally for years before it hits the market.
Wish me luck! Meanwhile, we do have a backup property in mind that we’ll put an offer on if this doesn’t work in our favor. To find out what happens, call me at 407-236-6559.