Homeowner wants to stay after closing

6 Replies

Hey folks,

I've come across a couple of wholesale opportunities, and both homeowners want to stay for about a month after closing to use the cash to move. 

How should I handle a situation like this? I would of course disclose all of this up front to my buyer, but is this something that's common or reasonable?

Thanks in advance!

@Jason McDougall

Our general rule of thumb is the owner does not remain as a tenant, particularly if the are selling under duress.  Perhaps if they needed a week or 10 days to finish moving, we would entertain it, but nothing longer than than.  Yes, there will be exceptions, but the are rare.

If the owners are only looking for a month, why not simply push closing back 30 - 45 days?

I've dealt with this a few times. They need the cash to move, but they probably don't need all of it. In the purchase agreement write out that you will pay the majority of the sale amount at closing, but you escrow a certain amount of money, say a $1000 for 1 month. When they move out, they will receive the $1000 or whatever the amount is. I would also have them sign a lease agreement that says they will be staying for a certain amount of time, and anything longer than that will deduct from their escrowed funds on a daily basis. 

@Roy N.

The homeowner needs the cash from the sale of their house to move, so I have to close first.

Originally posted by @Jason McDougall :

@Roy N.

The homeowner needs the cash from the sale of their house to move, so I have to close first.

There's always an alternative. Once you go firm, you could release a portion of your deposit with the balance being advanced once the owner has vacated and you have carried out your final walk-through.

I'm negotiating a situation like this right now. 

Property is in redemption period, which expires on Sept 29th. House sold at auction to the bank for $109,000 (cost to redeem). We're offering redemption plus $6000 at closing. The seller wants to stay in the property for 60 days to be able to move stuff out. She's an old lady who's also an artist...inside of house is like a museum.

How can I protect myself? I thought about holding that $6000 in escrow until verification that she's moved out. Give notice that eviction process begins on day 61, with a cost of $500 per day for time spent in property past the 60 days.

Minnesota is a tenant friendly state. I want to avoid having a squatter in there through the entire winter with my cash all tied up. 

Any feedback you guys could provide?

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