I am getting a property under contract, but the seller who is going through a divorce and has 2 high school daughters is stating that she wants to stay in the property till after the holidays. Not sure what I should do or structure the deal around this. Our exit plan on this house is to wholesale.
Thanks for ur help BP family.
@Luther M. I would think that the best way to deal with it at this point is to get it under contract with a purchase option with a 6 month expiration and stating that closing will be after Jan 1, if she is ok with that.
We just completed a similar deal. We flipped the house vs. taking it down. We scheduled to close in 30 days, with a lease back option for an additional 60 days. We calculated the local rents and came up with a fair rent price. The deal closed in 20 days with our us and our buyer who understood the terms going in. We held $10k back in escrow, with which the rents were deducted, and the balance was paid to seller at the end of the 60 day lease back after property was vacated. Worked perfect.
You want to do a Lease-Back agreement with the seller, where they pay rent for the days that they are staying. It is basically a temporary lease. If you are wholesaling, you need to let the buyer know that there is a lease-back involved in the transaction as they will be collecting the rent from the seller usually at closing.
Sometimes the seller will try to stay in the property, and that would suck as your new buyer will have to go through the eviction process. My suggestion is that you set the close date for when they actually want to leave, then no problems. If they are not out by close date, don't close until they do.
I hope this helped.
I would add to the Additional Terms section that the buyer has the right to choose between closing after the holidays (set a date), or closing prior with a vacate date being after the holiday. This way you can lock it up and find a buyer who will either close now or wait.
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