Seller needs time to move out after closing

Buying & Selling Real Estate
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Seller needs time to move out after closing

Diego Figueroa
San Diego, CA · Member since 2018 · 18 posts · 6 votes

Hey guys, so I'm trying to figure out a way to make this deal work smoothly with the seller. The seller wants to close fast, within two weeks, but would like 30 days after closing to move everything out.

So we would close at the end of October, but full possession would be given, say, December 1st.

Can I simply rewrite the Possession clause in my Purchase Agreement to say "Possession of the property and occupancy (tenants excepted), with all keys and garage door openers, will be delivered to the Buyer 30 days after title transfers. Leases and security deposit will transfer to the Buyer with title." 


From: "Possession of the property and occupancy (tenants excepted), with all keys and garage door openers, will be delivered to the Buyer when title transfers. Leases and security deposit will transfer to the Buyer with title."

How can I work around this so that the seller is able to have an extra month after closing to move to a different place to live?

Any help or advice would be greatly appreciated!

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y

Sign a lease for Exactly one month at closing, have a hold back of an xtra $10k or so to protect yourself/motivate the seller.

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  • Philip Williams
    Rental Property Investor · Rockford, IL · Member since 2014 · 385 posts · 702 votes
    7y

    Just have him sign a month to month lease at closing, before the closing is finished obviously. Then give him his 30 day notice that you are not keeping him around. I hope this is a great deal be prepared for a possible hold over or eviction!

    1Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    Sign a lease for Exactly one month at closing, have a hold back of an xtra $10k or so to protect yourself/motivate the seller.

    5Reply
  • Diego Figueroa
    OP
    San Diego, CA · Member since 2018 · 18 posts · 6 votes
    7y
    Originally posted by @Philip Williams:

    Just have him sign a month to month lease at closing, before the closing is finished obviously. Then give him his 30 day notice that you are not keeping him around. I hope this is a great deal be prepared for a possible hold over or eviction!

     Thank you Philip. I mentioned signing a month-to-month lease after closing but the seller doesn't want to spend any more money, since we're already buying the property up for about 130k below its market value. The best case scenario is that she's able to have an extra 30 days after closing to move everything out and rent a place to move to. 

    0Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    7y

    This is typically handled through a rent-back agreement at PITI with a sufficient security deposit. However, most smart people will tell you NEVER allow a seller to stay after closing.

    Who cares what the seller wants... your very real risk is a holdover tenant who could destroy the place once he figures out he sold for $130k less than value.

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    1Reply
  • Diego Figueroa
    OP
    San Diego, CA · Member since 2018 · 18 posts · 6 votes
    7y
    Originally posted by @Tom Gimer:

    This is typically handled through a rent-back agreement at PITI with a sufficient security deposit. However, most smart people will tell you NEVER allow a seller to stay after closing.

    Who cares what the seller wants... your very real risk is a holdover tenant who could destroy the place once he figures out he sold for $130k less than value.

     Thanks Tom. The seller knows this is selling for a deep discount since it's an extremely motivated seller that wants to get rid of the property asap, but needs the money from the sale to move out and would like extra time to move into some place else. 

    I'm also trying to wholesale this property to someone else, so I'm trying to find the best way to do this so everyone's happy and things go smoothly. 

    0Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    7y

    @Diego Figueroa Schedule settlement for the date your buyer gets possession... so push the settlement date back. This is what storage pods are for -- an expense you might offer to pay. He/she can take the pod and the cash when the keys are handed over.

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  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    If you let him stay you really do need a rental agreement, so that if you have to evict him you have the agreement.  Yes, he does not want to pay rent, so you give him 30 days rent credit through the sell of the house agreement, but set the rent rate high, maybe double normal rent.  That way you can use that as leverage for him to move.  And put about $10k into escrow that he gets after he moves out if he owes no rent for staying extra days or damage.  That gives you more leverage for him to leave--he will want all the $10k.  He definitely will not want to pay a double rent amount than what he would pay if he moved somewhere else.

    1Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    have the title company hold back $x until he is out

    0Reply
  • Robert Ware
    Member since 2018 · 20 posts · 6 votes
    7y

    Definitely get a holdback and a lease if possible. If no lease, have the 30 days in the contract and a large penalty due for missing deadline. The larger the holdback and penalty the more motivation the seller will have to vacate. As for wholesaling, once you have the contract you can do what you want. Stipulate in contract that you will have potential buyers, contractors and repairs performed to further motivate the seller to vacate.

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    7y

    You have gotten some good advice on this thread, but make sure to have your lawyer review and formally write up whatever agreement you and the seller come to.

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    If you are going to let them stay for 30 more days I would do something like a 30 day lease in case you have to evict. Either that and/or an escrow amount to disburse as long as they vacate on time.

    0Reply
  • Mike McCarthy
    Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y
    I’d definitely think about why this person needs extra time. You can hire a moving company for tomorrow, and they will even pack stuff up for you. The downsides I think are too great. Once you close, every issue is yours. What about damage? Fire, liability, etc. or if he decides he needs another 60 days. Instead of closing in 14 days, maybe close in 21. Split the difference. I don’t think the risk is worth it.
    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    There's nothing wrong with letting them stay longer since you're getting a great deal, but you still need to protect yourself. I would consider holding any proceeds, or a significant amount of the proceeds, until they deliver possession. If the Seller were getting $10,000 from the sale, you could pay 50% at closing and the remainder when they deliver possession.

    What you don't want is for them to stay in the property and require eviction or for them to haul off all the appliances, doors, and cabinets on their way out.

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    0Reply
  • Karen Rittenhouse
    Flipper/Rehabber · Greensboro, NC · Member since 2010 · 623 posts · 615 votes
    7y

    @Diego Figueroa Them so desperate to get your money and then stay is never a good sign, but we do it from time to time as needed.

    Seller does not get all monies until property has been vacated - period. If he doesn't move at the end of the 30 days, you're in trouble. The only way to motivate is with money, obviously. You're doing seller a favor, after all, by letting him stay. 

    Have your attorney draw up the paperwork and hold back a large portion of seller's funds in the attorney's escrow account until he's out. That's a very common practice. When doing this, we determine a daily rent that is collected from the escrow account before seller receives his funds. He can leave early but, if he says beyond the 30 days, the daily rent increases significantly. 

    Good luck to you.

    0Reply
  • Jeff Wheatley
    Real Estate Investor · Member since 2015 · 4 posts · 1 vote
    7y
    @Diego Figueroa I would consult a local trusted Realtor for a consultation on how they would handle. There is likly local board forms that have been proven in hundreds of sImIlar transactions. In Maryland we are able to grant a license for up to 60 days of occupancy. This is similar to hotel occupancy and will prevent having to sue for eviction in the case of a lease. You or the seller may choose to pay hourly for such a service. Not all agents are comfortable being paid on an hourly as they are more traditionally paid on commission basis. The more competent agents will cooperate on an hourly basis or pro bono if the event they are good long term relationship.
    0Reply
  • Eric Sullivan
    Developer · Salem, MA · Member since 2018 · 83 posts · 68 votes
    7y

    I just did this with a 3 family I purchased. If there is a lot of competition on the offer front you could throw him a month for free which is what I did to make it look more appealing. Other option is you charge them for the 30 days. I would make sure to in the terms put a daily price if he stays longer. Typically a higher number to deter them from staying past the 30 days.

    0Reply
  • Jonathan Soto
    Lender · Newark, NJ · Member since 2016 · 695 posts · 252 votes
    7y

    write something up with your attorney to cover your behind. It could become a bad scenario at the end or someone who really needs the time. always cover yourself for either scenario. best of luck and keep us updated.

    0Reply
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