Trust This. Stuck Tenants

👋 Happy Friday! We’re in Central Florida’s 🌧️ monsoon ⛈️ season, so don’t forget your ☔ umbrellas 🌂.

The MBA announced that this week’s national average 30-year mortgage rate is 5.94%. That’s almost 100% higher than it was last year at this time.

1 big thing: Tenants can’t move

Buyers are canceling contracts because the seller’s tenants simply can’t move out.

Sellers of tenant-occupied investment properties are finding themselves stuck owning houses that they thought they could sell before prices dropped any more than they have.

This puts the buyer and seller (and their brokers) in a tenable situation. Many buyers have sold their home or terminated their current lease, banking on moving into the new home they’re buying. They find out a couple of weeks prior to closing that the tenant in the home hasn't moved out and won’t be moving out any time soon.

What we're seeing: Landlord sellers and their management companies are taking the usual routes to get the tenants out so the sale can close:

These don’t work when tenants can’t find anything affordable or desirable. Some have demanded thousands of dollars for cash for keys.

When it does work, tenants often move out the day before closing, leaving yards of trash behind in their haste to vacate, costing the seller to have the trash removed.

Our thought bubble: Get tenants out before listing or be prepared to pay dearly.

2. Foreclosures are back

August brought 34,501 new foreclosure filings, a 118% increase over one year.

Why it matters: Foreclosure filings are back at pre-pandemic levels.

By the numbers:

The flipside: Repossessions, where a bank takes possession of a housing unit, rose 28 percent from July and 59% from last year. These rates are still lower than they were prior to the pandemic.

What we're seeing: About 10% of the closings we’re involved with are for homes that are in some stage of foreclosure. We work with the foreclosing lender’s law firm to obtain payoff estoppels. They take longer because of the required over-communication.

The bottom line: If buying or selling a property that is in foreclosure, make sure the title agent orders the payoff as early in the closing process as possible.

Go deeper: Dodd Frank Update

3. What passed by

4. Pic of the day

Today is National Play-Doh Day!

It started out as a wallpaper cleaner when coal furnaces warmed homes.

Think of something you could reimagine today, and then mold it with a few containers of Play-Doh.

I was in kindergarten the first time I ever saw Dolly Parton. She was visiting Captain Kangaroo on his show. He convinced her to perform one of Dolly’s standards. Classic.

(BTW, National Cracker Jack Day is February 19).

We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.

Be on the lookout for our next issue! 👋