What to do when the seller refuses to leave the home post closing

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What to do when the seller refuses to leave the home post closing

Sam Albury
Member since 2020 · 45 posts · 24 votes

https://www.foxla.com/news/couple-buys-riverside-dream-home-but-seller-refuses-to-move-out-in-eviction-moratorium-loophole

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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y

@Sam Albury never close on a property if the owner has not left. The best process:

1. Never let the seller remain in a property after closing. If you agree to them staying, they become a tenant and have tenants rights.

2. Do a walk through right before closing (minutes or hours before) and make sure all belongings are out of the property.

3. Go directly to closing from the walk through to meet the seller there to sign paperwork.

4. Get the keys at closing.

5. Go directly to the property and change locks. 

6. If the seller is at the property when you get there, call the police and report them for trespassing. You will have a copy of all paperwork proving ownership.

I hate to blame the victim, but the buyer made mistakes. 

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  • Dan Maciejewski
    Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
    5y

    The Realtor was in Lab Coat Agents posting that -- Inside Edition covered it.  He said he didn't charge anyone for the deal, either.  What a nightmare and the California courts can take a decade to sort this kind of thing out in normal times!


    1Reply
  • Justin Phillips
    Lender · Phoenix, AZ · Member since 2018 · 440 posts · 256 votes
    5y

    Yikes. I'm glad you're not asking this question personally @Sam Albury! 

    3Reply
  • Sam Albury
    OP
    Member since 2020 · 45 posts · 24 votes
    5y

    @Justin Phillips thank God it wasn’t one of my homes in that county.

    0Reply
  • Sam Albury
    OP
    Member since 2020 · 45 posts · 24 votes
    5y

    @Dan Maciejewski A decade?

    0Reply
  • Dan Maciejewski
    Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
    5y
    Originally posted by @Sam Albury:

    @Dan Maciejewski A decade?

    Yes.  There are posts on here that lasted about that long.  Professional tenants can drag it out forever in tenant friendly states!

    0Reply
  • Sam Albury
    OP
    Member since 2020 · 45 posts · 24 votes
    5y

    @Dan Maciejewski unreal

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    @Sam Albury never close on a property if the owner has not left. The best process:

    1. Never let the seller remain in a property after closing. If you agree to them staying, they become a tenant and have tenants rights.

    2. Do a walk through right before closing (minutes or hours before) and make sure all belongings are out of the property.

    3. Go directly to closing from the walk through to meet the seller there to sign paperwork.

    4. Get the keys at closing.

    5. Go directly to the property and change locks. 

    6. If the seller is at the property when you get there, call the police and report them for trespassing. You will have a copy of all paperwork proving ownership.

    I hate to blame the victim, but the buyer made mistakes. 

    25Reply
  • Sam Albury
    OP
    Member since 2020 · 45 posts · 24 votes
    5y

    @Joe Splitrock thank you

    0Reply
  • Andrea W.
    Investor · Tampa, FL · Member since 2015 · 89 posts · 30 votes
    5y

    What if the buyer camps out in the backyard (or front yard) and doesn't leave the premises? Is this legal and does this give them any rights? Does the buyer have the right to start remodeling the property? If they add on a room can they say 'seller is living in my house that I'm living in and I don't want them here any more' and have them evicted that way?

    0Reply
  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    I would ensure that the purchase and sale agreement indicates that the property must be clear of the previous owner and broom swept clean prior to closing. Also, this is why it is always important to do background research on the seller. If they have shown to make questionable decisions in the past, you may want to make the terms more strict to reduce your risk. 

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  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    5y

    @Sam Albury  My wife and I saw this story when it came out and we both agreed that it was a terrible situation and we felt bad for the couple who bought the home.  However, the first thing I said was that there was one thing that they obviously didn't do that could have completely prevented it from ever happening.  And that was to do a walk-thru immediately before closing. 

    Had they done that in this case, they would have seen that the seller was still there (and so were all of his belongings), and obviously he had no intention of moving out.  They could have then refused to close and the title/escrow company would never have transferred their money to the seller. 

    They may not have known to do that.  However, I was surprised the attorney interviewed for this story (who stated that he's handled 7-8 of these exact types of cases this year alone) didn't mention the need to do that as sort of a "public service announcement" to help others avoid falling into a similar predicament.  

    7Reply
  • Sam Albury
    OP
    Member since 2020 · 45 posts · 24 votes
    5y

    @Kyle J. That attorney was most likely marketing .

    1Reply
  • Varouj Asdourian
    Member since 2018 · 25 posts · 6 votes
    5y

    @Sam Albury Welcome to Commiefornia where squatters have more rights than property owners.

    2Reply
  • Sam Albury
    OP
    Member since 2020 · 45 posts · 24 votes
    5y

    @Varouj Asdourian Yes I’ve heard this. A few friends have had their homes squatted during construction in LA county.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    The only thing you can do is hire an attorney and find a place to hunker down for a while. In California, plan to hunker down for a long while.

    It's not legal and I would never suggest it, but wouldn't it be fun to hire a dozen homeless people or rowdy teens to squat in the property and give these sellers a taste of their own medicine?

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    @Joe Splitrock outlined the best ways to mitigate this potential issue. In addition, the sales contract should always have language dealing with this. The Colorado state-approved contract has the clause below. I usually enter $250-500/day depending on the property value. It gets expensive quickly for the seller if they fail to deliver possession (of course evicting/collecting is a horse of a different color depending on where the property is located, but at least you have the protection of a legally-binding document that is enforceable):

    17. POSSESSION. Possession of the Property will be delivered to Buyer on Possession Date at Possession Time, subject to the Leases as set forth in § 10.6.1.1.If Seller, after Closing, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable to Buyer for payment of $1 Million Spacebucks per day (or any part of a day notwithstanding § 18.1) from Possession Date and Possession Time until possession is delivered... If the box is checked, Buyer and Seller agree to execute a Post-Closing Occupancy Agreement.

    4Reply
  • Bob Floss II
    Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes
    5y

    I've run into some sellers that had trouble vacating, but we deal with it at closing. The buyers should always do a final walkthrough and if seller isn't out, I ask for a very large seller holdback and PITI. That typically motivates them. I don't know how closings are done in California but I don't understand how you can do a closing without a final walkthrough.

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    The walk through before closing is important.  My lawyers always made me do that.  If the person hasn't moved out, the deal doesn't close and the money doesn't transfer.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Steve K.:

    @Joe Splitrock outlined the best ways to mitigate this potential issue. In addition, the sales contract should always have language dealing with this. The Colorado state-approved contract has the clause below. I usually enter $250-500/day depending on the property value. It gets expensive quickly for the seller if they fail to deliver possession (of course evicting/collecting is a horse of a different color depending on where the property is located, but at least you have the protection of a legally-binding document that is enforceable):

    17. POSSESSION. Possession of the Property will be delivered to Buyer on Possession Date at Possession Time, subject to the Leases as set forth in § 10.6.1.1.If Seller, after Closing, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable to Buyer for payment of $1 Million Spacebucks per day (or any part of a day notwithstanding § 18.1) from Possession Date and Possession Time until possession is delivered... If the box is checked, Buyer and Seller agree to execute a Post-Closing Occupancy Agreement.

    let me add this, this year in the uber hot market many buyers ARE allowing the seller to stay in the home for one week one month at no cost.. its a perk to get the seller to take their offer.. just like waiving inspections or waiving appraisal etc.. 

    so for my wife who is selling our new construction many of the buyers also hire her to sell their home and she negotiates this delayed move out to help her buyers coordinate packing and moving into our new homes we sold them. now Granted her  clients have a big whopping non refundable deposit on my houses plus the ( in many cases) 30 to 100k in paid up grades up front so if they dont move into our homes and squat at the old one its going to cost them a bunch when they default on my contract

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    @Jay Hinrichs we're seeing this a lot too. Lots of buyers offering a lease-back option to strengthen their offer, so the sellers can find a replacement property. If they aren't out in 60 days it can become an issue for a buyer who has an FHA loan (which stipulates they're supposed to occupy the property within 60 days after closing).

    0Reply
  • Herly C.
    Rental Property Investor · Houston, TX · Member since 2017 · 31 posts · 7 votes
    5y

    @Andrew Freed this is a first I've ever heard of doing a background check on a seller. Just learned something new.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Steve K.:

    @Joe Splitrock outlined the best ways to mitigate this potential issue. In addition, the sales contract should always have language dealing with this. The Colorado state-approved contract has the clause below. I usually enter $250-500/day depending on the property value. It gets expensive quickly for the seller if they fail to deliver possession (of course evicting/collecting is a horse of a different color depending on where the property is located, but at least you have the protection of a legally-binding document that is enforceable):

    17. POSSESSION. Possession of the Property will be delivered to Buyer on Possession Date at Possession Time, subject to the Leases as set forth in § 10.6.1.1.If Seller, after Closing, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable to Buyer for payment of $1 Million Spacebucks per day (or any part of a day notwithstanding § 18.1) from Possession Date and Possession Time until possession is delivered... If the box is checked, Buyer and Seller agree to execute a Post-Closing Occupancy Agreement.

    let me add this, this year in the uber hot market many buyers ARE allowing the seller to stay in the home for one week one month at no cost.. its a perk to get the seller to take their offer.. just like waiving inspections or waiving appraisal etc.. 

    so for my wife who is selling our new construction many of the buyers also hire her to sell their home and she negotiates this delayed move out to help her buyers coordinate packing and moving into our new homes we sold them. now Granted her  clients have a big whopping non refundable deposit on my houses plus the ( in many cases) 30 to 100k in paid up grades up front so if they dont move into our homes and squat at the old one its going to cost them a bunch when they default on my contract

     I negotiated staying in my old house for two months after closing, as we waited for our new house to be built. The seller had us sign a lease with defined end date. I just wouldn't do it as a buyer, because there is too much risk. I would just tell the seller we can close on whatever day they want to close on, but it is the day they move out. 

    2Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @Sam Albury this in on the buyer, NEVER pay in full till they vacate , You should have have title co hold at least 50% Good Luck 

    1Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    5y
    Originally posted by @Steve K.:

    @Joe Splitrock outlined the best ways to mitigate this potential issue. In addition, the sales contract should always have language dealing with this. The Colorado state-approved contract has the clause below. I usually enter $250-500/day depending on the property value. It gets expensive quickly for the seller if they fail to deliver possession (of course evicting/collecting is a horse of a different color depending on where the property is located, but at least you have the protection of a legally-binding document that is enforceable):

    17. POSSESSION. Possession of the Property will be delivered to Buyer on Possession Date at Possession Time, subject to the Leases as set forth in § 10.6.1.1.If Seller, after Closing, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable to Buyer for payment of $1 Million Spacebucks per day (or any part of a day notwithstanding § 18.1) from Possession Date and Possession Time until possession is delivered... If the box is checked, Buyer and Seller agree to execute a Post-Closing Occupancy Agreement.

     Just replying to acknowledge your Spaceballs reference, well done.

    1Reply
  • Michael Gilman
    Investor · Westchester, NY · Member since 2014 · 96 posts · 57 votes
    5y

    In many states and depending on the purchase & sale contract, you should be able to hall them out for trespassing and breach of contract. If there is a post possession agreement it should not give them tenancy because then you will have to go through the court process as a landlord/tenant. 

    1Reply
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