Home Buying in Bakersfield>Question Details

Linda Turner, Real Estate Pro in Bakersfield, CA

Do the sellers have to move once escrow closes or would the new owners have to go through eviction to remove the old owners?

Asked by Linda Turner, Bakersfield, CA Sat Oct 2, 2010

I have some buyers who are concerned that once escrow closes on the home they are purchasing through a short sale that the current owners of record will refuse to move out and hence the buyers will not be able to move in immediately following the close of escrow. Could this occur? and what do we do if that does transpires?

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Hi Linda -

Short sale should have been initiated by a seller after they reviewed all their options. Furthermore, if the seller then went through the short sale process and agrees to the approved short sale terms from the lenders and the buyer and seller get into escrow; I would think the seller actually does want to sell and agree to move out.

All my short sale sellers are very grateful that they are finally done with the short sale and they can put this to the past and start the recovery and rebuild process. I have never had that kind of problems where the short sale seller decided at the last minute they don't want to go through with it.

However, your question is WHAT IF? Then yes, stipulate that the seller has to move out a couple days before closing, before the loan is funded and close escrow.

Best,
Sylvia
0 votes Thank Flag Link Fri Oct 15, 2010
Sylvia Barry,…, Real Estate Pro in Novato, CA
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Look at your contract from the bank, it typically will set a move out date and time. Many times, the occupant will receive money to move at the close of escrow. Check with the listing agent to be sure.
0 votes Thank Flag Link Mon Oct 4, 2010
Steve makes a good point - it is possible to fill in Paragraph 5 to state the that property must be vacant by a certain date, even before close of escrow. If you're already in escrow, the train has left the station for some of your options. For occupied short and REO sales, it's always best to consult an attorney before you submit an offer so that your buyers understand all the risks involved. At this point, you may want to consider offering a contract addendum that requires early move-out, or accept the risk that this will be a problem. It's never too late to consult an attorney to review the risks and benefits of eviction.
One other thing: make sure to make a detailed video of the property during the final walk-through to make sure the sellers don't take items that are supposed to convey. Short sellers are famous for this.
0 votes Thank Flag Link Sat Oct 2, 2010
Hi Linda,

Para 5 of the CAR RPA covers "Closing and Possession", and defaults to 5PM on the day of Close of Escrow. Para 16 of the RPA covers "Final Verification of Condition", which allows you to perform a final inspection of the property.

The following is not legal advice, just opinion:

I would speak with the Listing Agent and ask them to reiterate what Para 5 states and get confirmation this has been done. You might also make the LA aware that you intend to perform the final Para 16 walk-thru 2 days before the scheduled COE and let them know if it looks like the Sellers will not make the COE date for moving out COE will have to be extended until they have substantially vacated. This can be a tricky situation due to rate locks.

I would suggest you call the CAR legal hotline to get some legal tips as well!

Best, Steve
0 votes Thank Flag Link Sat Oct 2, 2010
In the 23 escrows I have closed in the last 6 months it has never been a problem, Your Realtor should know how to structure your offer so that it is automatic and you don't have to worry about it. That is what we are paid for. People in a short sale are glad to move out. By that point they have been through a lot of hoops and they don't want any trouble, They know that if anything goes wrong they are facing a foreclosure. In fact Linda, you can call me at Re/Max Golden Empire and I would love to assist you on that escrow! Darrel Mills
0 votes Thank Flag Link Sat Oct 2, 2010
I don't believe many people would be willing to purchase a home knowing in advance they would have to evict the present owners. Anything is possible but it would be best to deal with it up front...sooner than later. The sellers need to be made aware that they will have to move prior to closing.....no move....NO CLOSING!

If their choise is to remain in the home....and make things complicated....their choice is to be foreclosed on and evicted bu the bank!
0 votes Thank Flag Link Sat Oct 2, 2010
It's up to you and the listing agent to have the sellers out at closing. Control everyones expectations as the closing approaches. After the buyers appraisal comes in starts the clock ticking.
0 votes Thank Flag Link Sat Oct 2, 2010
I have had short sales where the contract stipulates the property is to be VACANT at the walk through prior to closing. They ought to consult an attorney.
0 votes Thank Flag Link Sat Oct 2, 2010
Linda,

The best advice that you could give your buyers is to speak with a real estate attorney. Each state has different laws. It is best that your clients get prepared for whatever happens after the close of escrow. Any advice you get here, unless it is from an attorney in the state of California, I would be very cautious in passing on.
0 votes Thank Flag Link Sat Oct 2, 2010
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