Flipper/Rehabber · Houston, TX · Member since 2012 · 176 posts · 75 votes
Hello BP,
I am closing a house in two days from now and got a call yesterday from the owner who needs extra time after closing to move, he requested a week, then a month.
What do you recommend? The buyer ask me for a recomendation, but need some advise first from BP.
The challenge that I have if the buyer creates a temporary rental agreement is that the house is in really bad shape, without running water becasue pipes has been broken since two years ago. The owner is living in the house and is using a neighbors hose for water.
You're better off delaying closing, as an investor I wouldn't accept the risk of having the previous owner still living at the property in unfit condition with the possibility of having to go through court to get him out and having the liability of someone getting hurt at the unsafe property. I'd rather wait and take it vacant. I'd say offer to close 1 month later for $1k less or 1 week later at the contract price and see if that motivates him to move out.
I would never allow an owner to stay in the property after it has closed. What I would do, if the owner needs more time is to try and negotiate a lower price in exchange for an extension on closing.
These are some tactics that I have used. Let me know if it helps any.
You're better off delaying closing, as an investor I wouldn't accept the risk of having the previous owner still living at the property in unfit condition with the possibility of having to go through court to get him out and having the liability of someone getting hurt at the unsafe property. I'd rather wait and take it vacant. I'd say offer to close 1 month later for $1k less or 1 week later at the contract price and see if that motivates him to move out.
@Hector Perez . @Patrick L. summed it up nicely. I would not close and allow the current owner to live in a house that is unfit for habitation.
Did you ask him why he/she needed more time? I have run into similar situations and, in many cases, the seller did not have enough money to move. I suspect that is the case in this situation; the seller has been living there for two years in less than desirable conditions. I would try offering them "cash for keys", and reducing the offer by an equivalent amount.
Your buyer should be the one getting advice and making the call. It's their money and time.
My experience with owners in properties like that is that they often have no where to go, regardless of the funds generated by the sale, or they lack the physical and emotional resources to get all their stuff moved. So it will go on and on and on. If there are hoarding issues or drugs talking, moving is just a fantasy. Entrenched owner and tenants will often present as motivated to sell and move but it's not always the reality.
It's hard when you are in the middle because you won't get paid until it closes. But unless you can make sure the owner will really vacate, I suggest that your buyer not close on it till it's vacant.
After reviewing the different alternatives, the buyer decided to do a temporary lease, for a week while owner moves out their belongings. Also, landlord will keep a $5,000 of the funding at closing as a deposit and release it to the tenant/seller once they move out. Also, part of the lease, the tenant releases the landlord of any damages occur during that period
The best alternative was to move the closing date, but there where may deadlines that need to be extended and signatures to obtain that it was not worth it. This deal took 3 months to close, title issues, liens, judgements, multiple owners (inheritance), etc.