"Only owner occupied will be approved"

[Joe Gemma]

Good Afternoon BP.

Currently searching for what will be my second investment property in the Baltimore county area. Came across a disclaimer in a listing (on a property that passes all my initial criteria with flying colors) that reads; "Bank approved short sale ~ approvals will be obtained within 48-72 hours.  Only owner occupied buyers will be considered for approval"

This just confuses me from multiple angles. Who is declaring this requirement? The bank I presume...?

Next. From a seller perspective, what does it matter if the buyer is occupying the home or not?

And finally, as a buyer, must you disclose your intentions with the property to the seller? I can understand a lender needing to know this information, but a seller needing to know is something I cannot wrap my head around.

Anyways, I figured the BP community would have the insight that I'm looking for.

Thanks as always.

Joe

[Kim Knox]

If it is a government backed short sale, they do this for neighborhood revitalization AND to give owner occupied purchasers a chance to get into a home without having to compete with cash investors. The idea is that getting people to become homeowners makes them care more for the home and keeping it nice, improving neighborhoods. Same reason as to why the first look program is available on REO's.

You might have seen short sales that do not allow a deed transfer within 6 months of the sale, as a restriction added to the deed (as a condition noted on the formal short sale approval).  Same idea, trying to push investors out, and to enable owner occupieds to compete.