Possession of the property 7 days after the closing

Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes

Hi, BP experts

I am about to sign a contract, but the seller wants me to agree that "Possession of the property shall be granted 3-7 days after closing". During the touring, I know there is at least one tenant living in the guest bedroom, but I am not sure whether the seller or another tenant lives in the master bedroom. I think they probably need some time to move out. I am a little nervous that after the closing, I am the owner but someone else is still living there. What should I do to minimize the side effect and have myself protected?

Thank you!

Lee

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Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes

only agree to take possession if property is empty or have a $3000 deposit in escrow which is forfetied if tenant is not out after 7 days

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Account Closed
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
9y
only agree to take possession if property is empty or have a $3000 deposit in escrow which is forfetied if tenant is not out after 7 days
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
$2,000 held in escrow until day 7. If house is not vacant and in broom clean condition the money goes to the buyer as rent.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
9y
Not a deal I would do. Either they sign a short-term rental contract, and pay accordingly, or they are gone the day you pay. It is not uncommon to rent a house back to a seller for a short period to give them time to move, but why the seller or their assignees should expect to stay in your property for free for 3-7 days is beyond me.
I would also do as @Account Closed
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
Or $3,000 as Steve said :)
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Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
9y
@Leon Lee Once the closing attorney files the paperwork with the registrar, you own the property. If someone still lives in the property, you are really inheriting a tenant, even if its for a week. What will happen if they refuse to leave? You don't have a lease with them or even know their names, credit history, employment status.
You could push closing until you take possession when you take ownership.
You could draw up an addendum to the closing docs that 'rents' the home to the individual staying in the house at a pro-rated amount with a security deposit. I'd also throw langue in that makes the seller responsible for any expenses associated with an evection.
When will you do your final walk through of the property? I'd use that as an opportunity to speak with the people who will stay if at all possible.
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Leon Lee
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Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes
9y
Wow, I am surprised that in five minutes, I got two solutions from you experienced landlords here! So, here are a few updates: I talked to the agent and it turned out that the seller is closing on a new house the day they close with us, so that they need the money from me to close on the new house. They also need a couple of days to move out. More interestingly, I mentioned earlier that there was a tenant when we toured the place. If the tenant has a rental agreement with the owner saying the lease won't end till Feb 2018, shouldn't I have the obligation to keep the tenant as well? So, please let me know whether these are reasonable next-steps:
(1) Ask for a copy of rental agreement from the seller. If they say they don't have, how could I confirm they are honest?
(2) add a clause in the agreement that put $3000 in the escrow account and if by the 7th day, the owner is still there or the room is not in a broom clean condition, the $3000 goes to the buyer.
Many thanks!
Lee
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
@Leon Lee,
Yes ask for a copy of the tenants lease. Also request an estoppel letter from the tenant (That says what they are entitled to) so there is no confusion. Last thing you want to find out is that you have a tenant that is paying $50 a month till 2025. You are bound by whatever agreements they have until they expire.
Good Luck!
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Leon Lee
OP
Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes
9y
Thank you BPers! The seller decided to change to the possession of the property at closing, which is much easier!
Lee
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Leon Lee
OP
Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes
9y
Hi, BPers
The owner agrees to leave at closing and she does have a roommate/tenant, which according to her, is on month-to-month and will leave the property by closing. Did I protect myself enough by
(1) get a copy of rental agreement to confirm that the tenant is on month-to-month
(2) an estoppel letter signed by both owner and tenant stating that the tenant is on month-to-month and will leave the property by closing.
My agent suggests add an addendum saying that I will get my earnest money back if the tenant will not leave by the day of closing, which I personally don't think very helpful: the owner already agrees on the contract that she will leave. As for tenant, if I can ensure that he is on month-to-month and have the estoppel letter, the worst scenario to me is eviction, correct?
How do you all will deal with the situation?
Many thanks!
Lee
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