Who would rent to someone who just did a short sale on their house? This question has been asked many times, and I understand the concern. The presupposition, that one’s credit is so compromised after a short payoff that no landlord would accept them, is not quite that accurate. In spite of what some say, the hit to a FICO score from a short sale is not as severe as with a bankruptcy or foreclosure.
And yet, how many people live somewhere after a foreclosure or bankruptcy? All of them.
Since virtually no one can buy after one of these transactions, our job has been, with the exception of those moving elsewhere, to also help them secure a home for rent. The most successful strategy has been to tell the compete truth. Landlords don’t care so much about credit ratings, they care about getting paid the rent. If a client can demonstrate that while they have one adverse trade line (their home loan) on their credit, but many others that are in good standing, a solid history of paying other bills, and show that the rent is lower than the mortgage payment they just sold off, they have excellent chances.
In many of our cases, we have shown that the rent was considerably lower than the prior mortgage payment, we’ve included the client’s job and salary on the application, and we’ve stressed all the other bills that were paid on time. Landlords often also know that most banks require a default to approve a short sale. If they don’t, we tell them.
Have there been rare cases where the landlord rejected our client? Yes. Rare cases. Who would want a puritanical jerk like that for a landlord anyway (did I say that out loud?).
In some cases, the biggest headache was pets. If you own your own place, you didn’t have to worry about the landlord accepting your pet. You were the landlord. So we have offered an extra security deposit in the rare case of a skeptical landlord. But all of our clients have gotten new housing with dignity, and as time goes by and they re establish credit, they can go back to the housing market again.