Los Angeles

[mustafagov]

Hi all,

I've submitted an offer on a short-saled condo on 7/30 and on 8/1, the seller has accepted our offer. I understand that there are a lot of documents in short sale but there is one document I don't understand.

It is a short payoff arms-length affidavit, and one of the paragraph is the following:

"There are no agreements, understandings or contracts between the parties that the Borrower will remain in the Mortgage Premises as a tenant or later obtain title or ownership of the Mortgaged Premises, except to the extent that the Borrower is permitted to remain as a tenant on the Mortgaged Premises for a short term, as is common and customary in the market but no longer than ninety (90) days, in order to facilitate reloctation."

From my understanding, it limits the borrower's ability to stay in the mortgaged premises up to 90 days for the purpose of relocation after title transferred to the buyer. However, somehow,  The listing agent says this document is for the bank to ensure the borrower and buyer is not doing this transaction for the seller to stay in the property. However, I always get this feeling that the borrower wants to freeride as long as he can.

Am I correct on this? Is this regulary industry norm? What if during this 3 month period, the borrower break something in the property, who is liable for the damage?

What should I do to proect myself from this transaction?

My agent is also working on it but since I've been lurking on redfin and there has been many knowledgeable experts here, I thought I could use some help.

Short-sale process is very lengthy. I am getting frustrated but all I gotta do is be patient and waiting for "the one". If its yours, then it is. If its not, then that's fine too, its not the end of world.

P.S This is a condo in West Los Angeles. Its in a quiet neightborhood, property is nicely decorated.

[Adam-la]

The short answer to your question is that this paragraph and form is designed to affirm to the current lender on the property that you, your agent and the listing agent are not colluding with each other and are not related or planning to allow the current owner to stay at the property after your purchase. 

At the same time you made your offer in July, you most likely signed an addendum called a Short Sale Addendum and Short Sale Information Addendum.  Take a look at both of these files as they will spell out the possession question you have. 

If/When you become the owner of the home (and I hope you do) then the 7th page in your 8 page purchase contract spells out when the home should be vacated by the sellers.  Make sure you know what that says and do not agree to allow the current owner to stay on the property beyond that agreement.  The standard template information there is to transfer possession at 5 PM on the day of escrow closing.  Some listing agents will convince their clients to ask for a 3 day 'moving period' or something similar. 

In addition, be VERY vigilant to clarify what items in the home you expect to stay.  All appliances, mounted fixtures for lights, drapes, etc might be removed.  This is also written in your contract and you should ask your agent to explain this to you if there is a question.