Seller Can't Deliver Vacant- WWYD?

Question

Looking for advice here. (Cross posted for visibility)

We’re under agreement on a 2-family in Beverly, MA marketed as an “owner-occupied opportunity" with both units being TAW. We’re using owner-occupied financing, so vacant delivery at closing (5/19) was required and agreed to by the seller in a signed offer.

After going under contract, we found out the tenants are NOT TAW — they have leases through October, seller has no signed termination, and tenants won’t commit to leaving before their lease, but they're "looking".

We’ve already spent:

-$1,100 inspection, $600 appraisal, $1,000 deposit, plus time with contractors, lender, attorney, etc.

Seller’s response has basically been:

• -No clear relocation plan
• -Suggested terminating the deal, with refund of deposit
• -They even went as far as to change the listing to “future owner-occupied opportunity”.

Our Counter

We’re trying to salvage it:

• -Extend closing to 6/19
• -$5K price reduction to account for our extended rental costs
• -Keep $15K knob & tube credit
• -Require weekly updates
• -If not delivered vacant → we walk + get reimbursed (deposit, inspection, appraisal)

Questions

• Would you keep pushing on this or walk now?
• Is this too risky given MA tenant laws?
• Would you demand stronger protections (escrow holdback, bigger price cut, seller-funded cash-for-keys)?

Feels like the seller agreed to something they can’t actually deliver and have been unresponsive and sketchy to say the least. If it wasn't a good deal and a well maintained property, we would have walked already.

Curious how others would handle this.

Brian

Tony Savage · Answer

Hey Brian,

I would walk.  It's not worth your time or money to try and salvage this deal.  I know that your are out of pocket right now for 2,700.00; you will get your deposit returned.

There are too many variables right now that are out of your control. Unless you are able to  get those terms into your control, I would cancel the deal.

In the future put contingencies in place to avoid these issue:  Contingent upon confirmation that the property is in fact an owner occupied opportunity and the tenants are TAW.

Do not put any validity into how the property is being marketed. Those terms are very important for your deal to close.  You need to confirm that information for yourself.

Good Luck!

Jim Johnson · Answer

This isn’t really a negotiation issue — it’s a deliverability issue.

The deal was structured around vacant delivery, and right now the seller doesn’t have control of that outcome. Leases in place through October without a termination agreement means the timeline is no longer something they can guarantee, especially in a tenant-friendly state.

At that point, you’re not just taking on delay risk — you’re taking on legal and operational risk that wasn’t part of your original underwriting.

Extending and asking for a price reduction helps on paper, but it doesn’t solve the core problem, which is uncertainty around possession. Weekly updates don’t change that, and even a later closing date doesn’t fix it if the tenants choose to stay.

If you were to keep it alive, I’d want something that actually shifts control back to you — either a meaningful escrow holdback tied to confirmed vacancy, or seller-funded cash-for-keys executed before closing. Otherwise, you’re relying on a result the seller has already shown they can’t guarantee.

Most of the time, when the structure of the deal changes this much, it’s cleaner to reset than try to force it through.

Drew Sygit · Answer

What real estate agents are involved and what are they saying?

What does the seller have at risk to perform?- If deal falls apart how much $ do they lose?--- How can you change that?- Recommend learning from this and have clause in contract for future, similar situations!

How many days after closing will your lender require your occupancy?How will a June 19 closing date meet your occupancy deadline?- What are the chances lender will find out if you are a few weeks late and what are the repercussions? NOTE: not suggesting fraud!

If you walk now, how many similar deals are available in the market?