So, What Happens To Tenants When A Home is Foreclosed?
A common occurrence we're running into Southwest Florida while showing buyers real estate is tenant occupied properties. It's not unusual to have a tenant in a property, but to have the majority of properties we show in one day be tenant occupied is unusual. The real estate boom produced its share of rental properties.
As a real estate agent organizing properties for my buyers to view I am now making appointments for about 50% more properties than needed because of the "failure rate". By failure rate I mean, the appointments will be cancelled or not accepted by the tenant. We can't get in unless the tenant approves the appointment. It is understandable that sometimes life interferes with appointment time frames. People have company in town, kids are sick home from school or maybe they just didn't have time to clean up. I can't help but think that most of the time the tenants are just being difficult. They don't realize it, but they could unknowingly be contributing to the expedited eviction that they will soon face.
The home is for sale for a reason and the reason isn't because the owner has grown tired of the paint color. Excuse the broad stroke of this brush, but there are a lot of homes that are tenant occupied in communities of fairly new construction. The tenants are living in homes purchased at the peak $$ of the market, perhaps with "liar loans" with adjustable rates coupled with the fact that we are now facing a down turned market with long term holding costs piling up, high and fast. It may have not occurred to the tenant that maybe their landlord isn't paying their mortgage or that their landlord may just quit paying their mortgage eventually. It's not until some random Tuesday when the tenant is served an eviction to GET OUT that they truly understand the quandary this market will be leaving them [the tenants] in. The tenant can say goodbye to first, last, security and any monies paid as advanced rent. You can bet your sweet bippy that the bank doesn't want a tenant, period, so don't even try to go there.
I know what you're thinking: Won't the tenant will just go rent somewhere down the street. Sure, and how long until they get another knock on the door? The stories are floating around. Tenants are experiencing evictions - on multiple residences, also.
Desperate times call for desperate measures. Maybe the tenants need to suck it up and start thinking about their house as a home, too. Their lack of cooperation with buyer showings is just bringing a possible foreclosure to them faster. Yes them, too. The banks don't just foreclose on Owners, the tenants get the boot, too.