Seller Won't Vacate After Sale

Member since 2022 · 14 posts · 6 votes

We bought a home in Pasadena from a wholesaler with the intention of doing a fix and flip. They had a contract with the 83 year-old seller saying she could stay in the property for 15 days after COE, to which we also agreed. There was nothing in the contract that said what would happen if she wasn't out at the end of that period.

Those 15 days came and went, then she said she need another week. Yesterday, she said she needs "At least" three more weeks. Meanwhile, interest rates are going up, prices are going down and we are paying $6,000 per month on the holding costs.

First of all, I know we were stupid, so no need to point that out, thanks; we won't be doing that again. However, if you have any useful suggestions on what our next steps should be, I'd love to hear them. Thank you!

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Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

Written In a “not to beat you up tone”

If I’m buying from someone that says they need 2 weeks to get out (I’m don’t like it because of possibly hidden damage or damage done moving out, but have done it several times.) my addendum would look like this.

We’re going to hold $20,000 (or more) for possibly hidden damage or damage done moving out. Yes it’s a lot, but you’ll get it in 2 weeks anyway, right? I understand your plan is to be out in 2 weeks and we both know things happen so just in case They do and you need more time I,m going to put two options in for an extra week at $1,000 each. That gives you a full month. After that something major must have happened but I still need the space so let’s call it $1,500/week for the next 4. We both agree there’s no chance you’ll still be here in 2 months right? After that you’re really going to want to find somewhere else because we’ll be at $2,000/week.

Then you just send a written reminder a few days before each “extension” kicks in out of their prepaid reserves and hope you don’t get to where you don’t have enough to cover discovered damage.

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Jon A.
Asheville, NC · Member since 2017 · 385 posts · 274 votes
3y
You can try cash for keys or you can could simply try and help this person find a place to live. I have helped tenants find places to live before by reaching out to fellow landlords. You could also go the eviction route. I think those are probably your only 3 options.
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Andrew FreedBusiness Member
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
3y
@Charles Constant - Jon brings up a lot of great options. At this point, due to the holding costs, financially cash for keys makes the most sense. I'd probably go this route if I were in your shoes.
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Charles Constant
OP
Member since 2022 · 14 posts · 6 votes
3y
Thanks for your replies, gentlemen. The seller has plenty of money having just sold the property, so it's not a lack of funds. I assume you are recommending the cash-for-keys as just an additional motivator, right?

My partners want to draw up a document that says we will be charging her for each additional day she is there, but I don't think that's going to be enforceable if she doesn't agree to it.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
What does your attorney say? Seems like an easy eviction to me. But then you're in California so I don't know.....?
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Charles Constant
OP
Member since 2022 · 14 posts · 6 votes
3y
I thought I'd ask for a few options from other investors, so I had some options in my head when I spoke with an attorney. Yes, California, so...
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
I would say normally a Sabour rattler from legal council will get them moving. give that a shot.. like you said its not money.

older people I have found that sell a home they live in or have lived in for many years can be pretty traumatic on them. Not to mention a sense of entitlement as in thinking its still their place.

worst case you have a hold over and will have to do an eviction I believe.
Also dont beat yourself up on the hold over this was very common the last 2 years to get your offer accepted My wife writes those in on all her deals helps her clients to take time to move instead of having to get it all done in such a short time frame.. But she always trys at least to withhold a sum of cash in escrow to be released upon moving. this way you dont have to sue them and they want the money even if its just a few grand or 5 grand enough motivation to get them to get their butts out on time.. Just sayin for the future is all.
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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
3y
Written In a “not to beat you up tone”

If I’m buying from someone that says they need 2 weeks to get out (I’m don’t like it because of possibly hidden damage or damage done moving out, but have done it several times.) my addendum would look like this.

We’re going to hold $20,000 (or more) for possibly hidden damage or damage done moving out. Yes it’s a lot, but you’ll get it in 2 weeks anyway, right? I understand your plan is to be out in 2 weeks and we both know things happen so just in case They do and you need more time I,m going to put two options in for an extra week at $1,000 each. That gives you a full month. After that something major must have happened but I still need the space so let’s call it $1,500/week for the next 4. We both agree there’s no chance you’ll still be here in 2 months right? After that you’re really going to want to find somewhere else because we’ll be at $2,000/week.

Then you just send a written reminder a few days before each “extension” kicks in out of their prepaid reserves and hope you don’t get to where you don’t have enough to cover discovered damage.
10 Reply
Charles Constant
OP
Member since 2022 · 14 posts · 6 votes
3y
Haha! Awesome reply!! We will definitely use it next time we encounter this situation.
1 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Charles Constant:

We bought a home in Pasadena from a wholesaler with the intention of doing a fix and flip. They had a contract with the 83 year-old seller saying she could stay in the property for 15 days after COE, to which we also agreed. There was nothing in the contract that said what would happen if she wasn't out at the end of that period.

Those 15 days came and went, then she said she need another week. Yesterday, she said she needs "At least" three more weeks. Meanwhile, interest rates are going up, prices are going down and we are paying $6,000 per month on the holding costs.

First of all, I know we were stupid, so no need to point that out, thanks; we won't be doing that again. However, if you have any useful suggestions on what our next steps should be, I'd love to hear them. Thank you!

I think you want to talk to a local attorney before you do anything.

The most important thing to ask her is if she has a place in mind to move to. She may not even be looking.

Elderly (83 years old) are considered a "protected class". Since the deal wasn't direct (there was a wholesaler involved) and she was allowed to stay in the house for some length of time after sale, and presumably she didn't have a real estate agent or attorney representing her, her claim would be considered by the court as her being taken advantage of. Not that she'd eventually win, but it IS IN California so don't put yourself in that position. I think that is where this would head if an eviction was done.

You don't know what conversation happened between the wholesaler and her and she could easily "mis-remember" things, whether it's intentional or not. It's an old trick that a hungry attorney would help her "discover".

The court will look for "equity stripping" (buying the property way below market value regardless of condition) and wire fraud if payments involved wire transfers and bank fraud if not.

Yeah, I know, it was an honest transaction but that doesn't count until she is happpy and any relatives are happy.

That is one reason disclosures are so important, texting is very useful (you have a record of the conversation). I have the seller have a friend or family there when we are signing the Purchase & Sale Agrement and I record the conversation if the seller is older or is in one of the other "protected classes".

Probably the best is to find out where she is moving to, hire movers to move all of her belongings, into storage if necessary
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
I would never feel comfortable using a wholesaler. Why do people use them?
2 Reply
Doug P.
Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
3y
Quote from @Bruce Woodruff:

I would never feel comfortable using a wholesaler. Why do people use them?
Because they find deals.
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
Quote from @Doug P.:

Quote from @Bruce Woodruff:

I would never feel comfortable using a wholesaler. Why do people use them?
Because they find deals.

Why couldn't a savvy investor find the same deals?
0 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Tell her no. Rent a pod for her (30 days) to store her stuff and tell her she can move to a hotel and her expense. She sold the house and you've given her 3 week already. I'm hoping you held money back at closing.
2 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Bruce Woodruff:

Quote from @Doug P.:

Quote from @Bruce Woodruff:

I would never feel comfortable using a wholesaler. Why do people use them?
Because they find deals.

Why couldn't a savvy investor find the same deals?

He could, if he took the time and spent the money.
1 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Theresa Harris:

Tell her no. Rent a pod for her (30 days) to store her stuff and tell her she can move to a hotel and her expense. She sold the house and you've given her 3 week already. I'm hoping you held money back at closing.

@Theresa Harris: You're obviously not in WA OR CA NY IL etc. I can see the attorneys drooling over this case if it is treated the way you suggest, in California. In fact, the OP would be wise to delete his information.

0 Reply
Dan White
Flipper/Rehabber · Haymarket · Member since 2022 · 76 posts · 70 votes
3y
First of all - that sucks. We had a client that I was worried about not leaving after closing so we held money - around 30k to ensure that they were motivated to leave.

@Account Closed nails it - I think the best route is an attorney and write up that you are taking action as this was not the agreement. From what you describe you have acted in good faith and fulfilled your obligation to the contract. Now the seller is acting in bad faith.
2 Reply
Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y
@Doug P. this wholesaler bamboozled @Charles Constant is my read.

83 year old single woman when you go to court (and now she has money to pay an attorney) is going to give you the fight of your life, and you might lose in California. She may not have capacity. You may lose the house and pay penalties after two years in court. It will cost you maybe $190000 in attorney fees after two years and you may lose.

1. I would go back to wholesaler with a demand. Wholesaler should have written a contract with per dium consequences for the hold over that motivated her to move like $500 a day. Wholesaler error. Make him pay the per dium penalty PITI X 3. This is his problem, make him responsible.

2. Careful sweetly like this is your Grandmother. Someone needs to go in person. Has she packed a single box? Has she dug up her prize rose bush? Probably not.

How can you get her packed? You need 200 boxes and mounds of bubble wrap. I like recycled flower boxes as they have handles and are free. You need a container company to deliver the big pods or blue monstrosity to the driveway. You need to find her a place where she is willing to move in. Does she have family (they might be adversaries but you have to make the call and try remember kindly gently) ? Then you need to pack everything and pay for the move. Professional move of 3 bed house local costs about $9000 depends on how much stuff and how far she moves - out of state $11000. She does not have years of time to sort the belongings and do a Marie Kondo downsize. Pasadena City college girl plus some church friends can pack at $18 an hour and the container costs $2000 (do not agree to pay for it long term only for a 30 day move) Maybe have her look at Villa Gardens and such if there is no family. No family she might need a conservatorship to help her make choices? Charles there was a voice in the back of your head during the process and next time you will check things out better.

In California there is no easy eviction. @Bruce Woodruff it's a LONG process if she hires an attorney and she will cry to neighbors and buddies at the senior center and church and someone will come to her defense.

Other not mentioned choice, oh my "Mr. Bill" if you remember him. Maybe she buys it back but I guess there are the closing costs now gone. This market is declining. Do not let anyone tell you it's going to rise and be okay.

3 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Quote from @Account Closed:

Quote from @Theresa Harris:

Tell her no. Rent a pod for her (30 days) to store her stuff and tell her she can move to a hotel and her expense. She sold the house and you've given her 3 week already. I'm hoping you held money back at closing.

@Theresa Harris: You're obviously not in WA OR CA NY IL etc. I can see the attorneys drooling over this case if it is treated the way you suggest, in California. In fact, the OP would be wise to delete his information.

I guess one question is-did she have a lawyer handle her closing?
0 Reply
Robert C.
Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
3y
Quote from @Charles Constant:

We bought a home in Pasadena from a wholesaler with the intention of doing a fix and flip. They had a contract with the 83 year-old seller saying she could stay in the property for 15 days after COE, to which we also agreed. There was nothing in the contract that said what would happen if she wasn't out at the end of that period.

Those 15 days came and went, then she said she need another week. Yesterday, she said she needs "At least" three more weeks. Meanwhile, interest rates are going up, prices are going down and we are paying $6,000 per month on the holding costs.

First of all, I know we were stupid, so no need to point that out, thanks; we won't be doing that again. However, if you have any useful suggestions on what our next steps should be, I'd love to hear them. Thank you!

Have you had a chat with the occupier to find out what the hold up is? I only ask because it sounds like the person did supply additional deadlines even if they missed them - and they are 83. I bought a house off an older couple once and they just had SOOOOO much stuff from over the years, that even with the realtor's help it took them quite a while to pack everything up. Maybe if instead of cash for keys, there's a cheaper solution to pay for some extra moving help if that's what the issue is.
4 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Theresa Harris:

Quote from @Account Closed:

Quote from @Theresa Harris:

Tell her no. Rent a pod for her (30 days) to store her stuff and tell her she can move to a hotel and her expense. She sold the house and you've given her 3 week already. I'm hoping you held money back at closing.

@Theresa Harris: You're obviously not in WA OR CA NY IL etc. I can see the attorneys drooling over this case if it is treated the way you suggest, in California. In fact, the OP would be wise to delete his information.

I guess one question is-did she have a lawyer handle her closing?

Good question. Not likely, it was done with a wholesaler.
1 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Dan White:

First of all - that sucks. We had a client that I was worried about not leaving after closing so we held money - around 30k to ensure that they were motivated to leave.

@Account Closed nails it - I think the best route is an attorney and write up that you are taking action as this was not the agreement. From what you describe you have acted in good faith and fulfilled your obligation to the contract. Now the seller is acting in bad faith.

Actually what I intended to convey is that he is likely to get sued if he doesn't talk to an attorney first to make sure he doesn't do anything questionable or illegal.

I would not hire an attorney and try to enforce the contract, I think that would have the reverse effect. She would have to hire an attorney and from the looks of things, it wouldn't go well with the wholesaler or the buyer. I'd be very patient and kind and work with her to make the transition. Since it wasn't put together well, now is the time to mitigate the situation as best as possible and not be confrontational.

1 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y
I normally hire Big Tony to go over, ask if there's a problem, then pull them out by their ear if there is.
Since she is his mother's age, I'd have to resort plan b.
Small claims court to $6k (or the max in your county). Every month.
I'm all about working with people but this is ridiculous.
2 Reply
Michael Brattelli
Real Estate Broker · Medford, NJ · Member since 2018 · 236 posts · 177 votes
3y
@Charles Constant Try to connect with them on a personal level with compassion and see if there is something you can do to help them get out in a timely matter. Try to find out what they need the extra time for, what problem can you solve for them to come to a win win scenario. This person is 83 and probably feels very overwhelmed trying to move their entire life and may not have friends or family to help. As you said earlier it’s not about the money so it’s either they need help finding a place or they need help getting their stuff together. If it’s the latter maybe offer to pay for movers. Real estate is all about problem solving, and to find the solution first you need to define the problem.
1 Reply
Doug P.
Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
3y
Quote from @Bruce Woodruff:

They could but marketing and renovating houses are two entirely different skill sets. Some people prefer to focus on the flipping part and rely on wholesalers and realtors to bring them the deals.
0 Reply
Jeff S.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
3y
You received a lot of advice, @Charles Constant, but never defined the problem. Why is she unable to move? Is it as simple as she needs help packing? Does she need a place to go? Perhaps a medical or emotional issue? Obviously, some of this is easy to solve and some might be well over your head. You asked for next-step suggestions. There are no bad answers here, but what’s the problem? Have you asked her?

No matter what, stay as far away from a court as you can. You will lose. A second-year law student would take you to the cleaners trying to evict or justify an unrepresented wholesale purchase from an 83-year-old woman. Better to understand and solve whatever problem she’s having. First, perhaps you can explain it?

With due respect, come up with as punitive a schedule of progressive penalties as you want. Not all sellers will choose to understand these if all they want is to sell. Get your lawyer involved. But be prepared to face hers. The safest, really only, way to buy a flip is vacant. A deal can be bad even when you think the numbers make sense, as I think you’re finding out, Charles.
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