A short sale is a great alternative to foreclosure, but some people worry about where they will go when the short sale is complete. Through banking guidelines, a person who has sold their home in a short sale must wait 2 – 3 years to purchase another home. In many cases, people who complete a short sale have very low credit scores. A low credit rating makes it difficult for people to relocate, rent somewhere else and move on with their lives.
According to Vatt Ferdinandi of Realty Warehouse, there is a way out. “If people who sell in a short sale can show the prospective landlord that they have enough income and no record of prior evictions, they may have a good chance at renting, even if they have a low credit score,” she stated.
For larger scale apartment housing developments, many landlords look for a verified income of about 30 times the amount of rent per year. For example, if a tenant wants to rent a unit that is priced at $2,000 per month, that renter will need a minimum income of around $60,000 per year. In the five boroughs of New York, the income requirement is often even higher.
“I tell renters that after a short sale, they have to be optimistic and realistic, “she said. “If a person is making just $30,000 per year, they may not be able to rent a beautiful three bedroom apartment in an expensive area of Brooklyn.”
Vatt Ferdinandi can recommend a credit repair company to give people a better shot at renting in their preferred area, but people who sell their house in a short sale may not have enough time to wait. If they have enough income, she recommends working with a specialist who has multiple contacts with listing agents in the area to find the right fit.
“You have to look at things on a case by case basis,” she said. “There are many ways to offer relocation assistance to people who have sold in a short sale, and a lot depends on who you know. It’s all about relationship building,” she said. “I have helped over 40 people relocate in the last year. Sometimes I can even work out a rent-to-own agreement for my clients. I have the contacts to help people out.”
Vatt Ferdinandi noted that there are methods to increase the possibility of her clients get accepted by a landlord. Tenants might offer 3 to 12 months of rent in advance, or they might get a guarantor to co-sign the lease. If their income is insufficient for a rental, they can get the help they need to apply for federal housing assistance. Working with a professional who has the experience and the contacts is essential.
“I have great relationships with landlords from past rentals, “she stated. “My clients appreciate that I work by their side to negotiate on their behalf.”
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This blog is for informational purposes only, subject to change.