Question: Our investment group is purchasing a home in Surprise as a short sales. The intention is to rent the home after the short sale closes. The seller, however, would like to rent the home back from us. Our understanding is that a sale of the home back to the seller after a short sale is illegal, but can we rent the home back to the seller?
Answer: There is no law or court decision that prohibits a buyer from selling or renting the home back to the seller after a short sale. However, many lenders that approve short sales will require the seller and the buyer at closing to sign “arms-length” affidavits or similar documents that generally would prohibit a buyer from selling or renting the home back to the seller after the closing of a short sale.