Would you ever rent to buyer prior to close?

Question

As a seller, let's say you have accepted an offer, buyer's financing is all approved, everything is  ready to close, just waiting on the final title/paperwork/close date, but then there's an issue with the title and it will delay the close, few weeks, few months.  Would you ever consider renting to this buyer prior to close? Why or why not?

Mindy Jensen · Answer

@Rachel Johnson, I don't like this idea, would never do it myself, and would also agree with @Brian Truman that this can blow up in your face. The miniscule rewards you get from renting it out before you close can be dwarfed by the issues an unscrupulous buyer/tenant can cause you.

Another thing to consider is what happens if something breaks while they are living in the property? What if they discover something that suddenly makes them back out of the contract or ask for a significant discount on the sales price after they've moved in?

I lived in a house where the next door neighbors had a dog that literally barked every minute of every day. Except of course those times that I was at the house to view it. If I had lived there prior to closing, I would have cancelled the contract - even if it meant losing my deposit. That dog was a nightmare.

Brian Truman · Answer

Hi @Rachel Johnson,

As an agent... I would caution against this. More than likely, based on the fact that the buyers have been approved, these folks are probably fine to rent to...

But... I have seen more than a few occasions where sellers let the new buyers get keys early, or just let them move their stuff into the garage before closing, and then the whole deal blows apart... You now have a major mess to clean up. I have seen buyers claiming to have occupied the property and get rights due to the amount of time in the property, or they have taken possession and it comes to light that they have somehow masked fraud, and now must be evicted. This ends up losing you money, not to mention if they trash the place and drag the process out in the courts. Please use extreme caution.

Cheers!

Brian Truman