This happened to me years ago. I found out when I came home and a forclosure sign had been posted on my property. Not only was this extremely embarassing, but shocking as well. I called the sherriff’s office and explained that I was renting the home and didn’t want my neighbors thinking I was a lowlife who didn’t pay her rent. I was told that I could remove the sign. (This may not be legal in all jurisdictions)
I then went online and found the case file and discovered that my landlord was indeed in forclosure. I contacted the bank that held the mortgage and asked if I could buy the house instead of them having a forclosure sale. They said “You can certainly make a bid on it once it goes up for sale, but you’ll still have to vacate the premeses”
I was told by someone, I forget who, to stop paying rent to my landlord immediately and put all my rent money in an escrow account until I moved out, just in case the bank tried to come back on me for past due rent, or in the unlikely event the landlord was able to resolve the forclosure and recover his property. Neither of which happened and I was never asked for the rent payments of my last couple of months that I lived there.
Since I was only seeking to buy the home so I wouldn’t have to pack up and move, I no longer had any interest in buying the house. I found a much nicer, newer and bigger home for only $100 more a month. I was able to do a rent to own and in less than two years I secured a bank loan to buy the house.
So, in the end, what seemed like my world falling apart turned into a blessing. Best of luck to you.
As a real estate agent who readies and lists bank foreclosures for sale, I can tell you that 2 things are true in all states.
First, until the bank actually forecloses on the property, your landlord still owns the property and your rent is still due according to the terms of your lease. After the foreclosure sale occurs, a real estate agent or property preservation contractor should knock on the door and ask for your contact information, do you have a lease (they need a copy), are you able to vacate, are you or any occupant active duty military(special rules apply nationwide here)?
There may be additional questions. Those vary more by location and bank. Second, most banks will pay you to voluntarily vacate the property.
This is commonly called ‘cash for keys’ or ‘relocation assistance’. Pricing varies by location and house value. I’ve seen figures from $500 – $5,500 over the past 20 years.
The figure depends on property value, eviction costs in your area, how quickly you can leave(faster = more money) and other factors internally in the bank.
Some banks will continue your valid, provable lease and have you pay them directly in exchange for your cooperation with showings. I hope this helps!
Nothing. Except do your homework on what to expect after the property is foreclosed and the bank takes ownership.
If you’re in the US, most states require the bank – and any subsequent buyer – to honor your WRITTEN lease to its expiration.
Your lease probably has a clause that requires you to cooperate with showings, inspections, etc. Do so. It’s in YOUR best interests to show yourself as a good tenant.
Most buyers who purchase a tenant-occupied property WANT the tenant because it means instant cash flow. No down time to clean, remodel, advertise, etc. That’s assuming you’re a GOOD tenant – rent never late, keep the place tidy, etc.
HOWEVER, some states will allow a new buyer (not the bank, but the subsequent buyer) to give you X days notice (number varies by state, but never less than 30) of tenancy termination if the buyer or a close family member intends to occupy the property as a primary residence. The notice is issued AFTER the buyer closes on the property, not during escrow.
Additionally, if you don’t have a written lease, your tenancy can be terminated by the current owner, the bank, or the buyer (after closing) simply with X days notice (varies by state – 30 days in my state).
