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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

I just want to say first and foremost that I do understand the question. I am concerned that it is being asked here ... and more concerned that the lender you are working with is not answering your concerns about the buyer and the tenant situation.  Sincerely, all the opinions here are just that. What counts is what the lender you are working with advises you.

May 04, 2017 11:50 AM
Rainmaker
1,425,250
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Typically the new owner needs to honor the tenant's contract (at least in Cali).  Sometimes the tennant can be negotiated with.

May 04, 2017 11:02 AM
Rainmaker
1,759,689
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

What does lease say? No lease, month to month, throw them out ASAP. Buyer takes preference. Lender will not let a rent back for longer than 60 days.

May 04, 2017 12:56 PM
Rainmaker
6,968,613
Roy Kelley
Retired - Gaithersburg, MD

Your lender will probably require the buyer to occupy the property within 60 days.

May 04, 2017 11:00 AM
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Good question, I am sure that Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi , Joe Petrowsky , John Meussner , and a few others will have good answers.

May 04, 2017 10:13 AM
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Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     What does the Lease say?  Is the Tenant aware of the sale, and prepared to move out?   I am not a Lender, but I believe that an FHA Loan may allow a holdover tenant up to 60 days. 

    Get advice from the Lender who is doing the loan!

May 04, 2017 04:07 PM
Rainmaker
808,903
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

I wouldn't advise this to be a good idea to my FHA buyers, too risky.  The lender needs to know what's going on and won't like it eitherprobably.  Close later, wait for the tenants to move out or find another property or find another loan program, but talk to the buyers lender most importantly. -Kasey

May 04, 2017 01:17 PM
Rainmaker
1,347,522
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Best they are out on day 59, but doubtful the FHA police will show up day 60. I defer to my exopert though, Jason E. Gordon 

May 04, 2017 11:50 AM
Rainmaker
5,767,421
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Bob Crane gave you an excellent suggestion.  A

May 04, 2017 11:23 AM
Rainmaker
1,708,235
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

In my years of reale state both lenders and insurers want a 30 day window. Let's see if this has changed. Also, if the tenant is legally entitled to stay 60 days this may be a problem.

May 04, 2017 10:13 AM
Rainmaker
3,070,784
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Bob Crane nailed this one!

May 05, 2017 04:50 AM
Rainmaker
3,376,874
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

If i was a buyer broker, i would not recommend my buyer purchase a home with FHA and have a tenant occupying the property for even 1 day. The allows 60, but what if the tenant stays 61? what if the tenant does damage? It could be an expensive fix for the buyer if there is damage. For me it does not matter what the lease says as my buyer would not close until the tenant is out. If the buyer really wants the home, delay closing to tenant is out

May 04, 2017 07:05 PM
Rainer
349,016
Caroline Gerardo
Licensed in 20 states - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Subject property lease lasts  60 days after the close of escrow. Lender won't ask for the lease, unless it is disclosed in contracts or mentioned. Buyer signs an agreement that they intend to OWNER OCCUPY in 30 days, fire/hazard must be written as owner occupied. FHA is strict about this and it would be fraud to lie, and penalty is horrendous. Fire insurance may not cover tenant caused damage. Buyer or seller must offer tenant cash to move. If I was buyer I would not close with tenant in the subject property, as they may need to go to court to get them out (could be until the cows come home). Lender could call the note. Any lender should tell it to you straight. Tenant moves out a couple days before close or walk on, find another property.  That you posted this public it is vital that you make the parties follow the law. It may be difficult to get tenant out in parallel time frame with your buyer's rate lock. Get an addendum stating the seller is reponsible to get them out by x date or the deal is off and contingency does not apply

May 04, 2017 05:26 PM
Rainmaker
1,466,027
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Karen Jones Lewis, MBA, Realtor What does the lease say should the seller decide to sell? Tenants usually can legally stay the term of their lease. A buyout is a potential possibility.

May 04, 2017 02:11 PM
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Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Check with the buyer's lender as there may be a requirement (I had that with another loan) but you also can't just evict the tenant if there is a lease in place.

May 04, 2017 12:07 PM
Rainmaker
4,511,808
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

For some expert advice contact Joe Petrowsky, Gene Mundt, Larry Bettag or George Souto!

May 04, 2017 11:00 AM
Rainmaker
430,334
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Well, I am not a lawyer, but FHA rules state that the buyer must occupy the home within 60 days of closing and for a minimum of 1 year.  So my interpretation would mean that the current tenant could legally stay for 59 days.  But as always check with the lender because if the buyer is signing a loan application stating that it is a primary residence the lender may not allow renters for any period of time.  You don't want the sale to fall apart the last minute because lender won't fund loan.

May 04, 2017 10:15 AM
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Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

I would disclose and that seems to be ok to me as long as buyer intends to live there

May 04, 2017 10:09 AM
Rainmaker
5,267,179
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Not being a lender, I know with a financed deal, the buyer must take occupancy within 60 days.

May 06, 2017 12:54 PM
Rainmaker
1,549,505
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

In CA it is 60 days notice, but situations happen when tenants did not find a place and refuse to move out before COE;  it can become a huge issue, especially for FHA loans. 

May 06, 2017 12:39 AM
Rainmaker
941,223
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

IMO it's all in the lease and varies from state to state

May 05, 2017 06:54 AM
Rainmaker
4,435,346
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Most loan require a borrower/purchaser to take possession and live in a home within 60 days of closing.

May 05, 2017 05:12 AM
Rainmaker
1,157,535
FN LN
Toronto, ON

We do not have FHA in our great nation.

May 05, 2017 12:10 AM
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Karen Jones Lewis, MBA, Realtor - as long as there is a contract, why not?

Though I'd leave it to the attorneys and lender.

May 04, 2017 09:50 PM
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Sorry, I can't help as I am in NC and state laws with regards to leasing are all different, Karen. I would definitely confirm with your lender as well as reaching out with the question to other trusted lenders in your area.

May 04, 2017 08:15 PM
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Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Lenders have occupancy requiements that must be met on owner occupied FHA loans. Check with the lender you are using. 60 days may be within the window of acceptability of when the new owner must occupy.

May 04, 2017 07:47 PM
Rainmaker
4,433,809
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Do not know.

May 04, 2017 05:28 PM
Rainmaker
2,684,202
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I dont see why not however what if they dont move out?

May 04, 2017 01:57 PM