Discount to delay possession?

Question

Hey Everyone,

So I'm under contract to purchase a Mobile home on the 25th.  The seller calls me tonight and wants to know if I will let him keep possession of the home for a week or to AFTER we close so that he can use the money to get a new place to live.  He is willing to discount the price to compensate me.

My question is what issues could I run into by doing this.  The title will be in my name and I'm not worried about the marketing piece because I already have the buyer signed to move in on Sept 15 and the home doesn't need any work.  Saving a couple hundred dollars on the purchase seems great to me, but I don't want to put myself in a bad position either.

Any suggestions or warnings would be appreciated!

Jon Holdman · Answer

There's a lot that could go wrong with letting him stay and it could mess up your deal with your buyer.

Have a significant chunk of money, say $10,000 or a third of his proceeds, whichever is more paid to you as a security deposit on the property.  Pay this out to him ONLY when he leaves.  Specific that starting on the agreed-upon date rent will be some amount two or three times the going market rent, to be deducted from the escrow when he does leave.  Specify that you have full access to the property, without notice, starting at closing.  Specify you will inspect the property in detail at closing, and any damages found between closing and when he vacates the property will be deducted from the deposit.

Finding a "new place to live" is commonly part of selling your residence.  You either find the new place before you close on the old one or you put your stuff in storage and live in a hotel.  A "week or two" could easily become a serious problem give you have only three weeks before your buyer wants to move in.  A couple of hundred bucks will not compensate you for this risk.

Tim Conway · Answer

Lance,
I would not let him stay on longer than the agreed upon date. You have to account for the possibility that even though you're not anticipating any work needed on the trailer, once all his stuff is out, you may very well come across a surprise or two that you'll need to deal with before the new buyer moves in. You don't want to cut your timeline any closer.
Does the seller already have a new place lined up? If so, you could find out how much he needs to move in (first month rent/deposit?), and offer to write a check to the new landlord to cover that-obviously out of the purchase price. I would only do something like this as a last resort and if you felt like the deal was going to fall apart otherwise. I would also want to negotiate a discount off the purchase price for offering this kind of problem-solving on your part.

Curt Davis · Answer

Lance,   never give them anytime after you close.  Make sure they are out before you close.  Pretend you close and give them some time, what if they dont leave?  You now have to evict them like renters and what if they cause damage?  You are putting yourself in the worst situation possible if you give them even 1 day!!  Tell them to get searching now otherwise your not closing till their out.

Lance H. · Answer

Thanks everyone for all the feedback!

The reason he wants to do this is so he can use the money to get a new place to live.  I really like your suggestion Tim as a last resort.  I would feel much more in control working directly with his new place.

Thanks again!

Tin Lam · Answer

Hey Steve,

Great seeing you up here huh, haven't seen you post any post on your site lately!!! too bz cranking up houses?

Steve L. · Answer

I second Curt's opinion.  If he doesn't want to move you will have to evict him.  If he trashes the place, it is your problem to collect.

I would offer to delay closing for a discount.  But you want possession at closing.

Discount to delay possession?

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