Home Buying in Sacramento>Question Details

cac, Home Buyer in Sacramento, CA

Seller wants to stay!!! what should I do?? please help!!!

Asked by cac, Sacramento, CA Sat Dec 3, 2011

Hello,

This is what happened.
Put in an offer on a house 2 months ago
got the approval letter last week
closing on the 16th this month
did the house inspection 2 days ago

(2 days ago) listing agent asked us if the seller can rent the place back for a week after closing and we said yes
(today) listing agent informed our agent that the seller need to stay at the house for 2 weeks after closing because she needs more time to move out and we should not be charging her any rents which means she will not be paying anything

my question is that whether I should let her stay? i really really want the house!! i know we don't have to let her stay but i don't want to push her because i don't want her to mess up the walls or the floor or anything. please let me know what you think!!!! please!!!!

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Answers

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CC -

It is not uncommon for short sale sellers to have challenges moving out. So much so that I suggest my buyers add into the contract that the house be empty 3 days prior to close of escrow to make sure they are out. If they are not out, they become tenants. If they become tenants, they must be evicted.

Now,saying that, 'tis the season to have some understanding of moving out around the holiday time can be hard and finding a rental even harder. But, there needs to be motivation to move. So, I suggest the rent back fee be more expensive then it would cost to move on. It may sound cold but I agree with others below, you are buying a house for yourself, not to be a landlord.

If there is a way to offer other incentives? The agents can help find a rental, help organize moving, and make sure they move. It is my opinion that rent backs in short sale situations particularly are very risky. Remember, this home owner has most likely been living rent free for a while.

To understand your rights and risk of the current home owner remaining in the home past close of escrow, it is best to consult with a real estate attorney. Consultation fees are $300-500 but may very well be worth it.

Good luck,
CJ
Web Reference: http://TalkToCJ.com
3 votes Thank Flag Link Sat Dec 3, 2011
Just a little update.



The house was successfully closed a few days ago. The previous owner did move out a few hours before we received the keys. The house was kinda dirty because she said she didn't have enough time to clean it but we seriously didn't care since as long as nothing was damaged. We love this house!! Anyways, thank you everyone for your advices!!!
2 votes Thank Flag Link Sun Dec 18, 2011
Cac...

Let us know the outcome of this situation would you...? Many times we have folks come on here asking questions and seeking advice or opinions on how to handle situations in a real estate transaction.

There is actually a form for this dilemma if you wanted to let them rent back. However all it does is protect you and give you a more firm legal footing if you had to do the "eviction thang"... which I know, you clearly want to avoid.

Your circumstance is not all the uncommon... I think many, if not all of the Agents/Brokers that have given you their opinions and offered some advice here have been there representing a Buyer or Seller in a similar situation as yours.

There really is no contract that will "insure" a person does the "right thing" and actually fulfill their obligations in a written contract.

That's why we have courts to resolve these kinds of issues if they don't and like I said... I know you want to avoid that if possible.

I think the answer you got to maybe delay the closing might work if you have time on the short sale approval and your loan documents don't expire. And... I agree with the suggestion for the Seller's agent to assist that gal in finding a place to live... shouldn't be all that hard... unless the Seller is "picky" or doesn't have the $$$ for a 1st month's rent and Security Deposit...

Let us know what happens... We'd appreciate it believe me...

I hope this helps...

Make it a Great Day...!!!
2 votes Thank Flag Link Sun Dec 4, 2011
Cac,
I would strongly encourage you to not close on the home until the seller vacates. Once you own the home and the seller is still there your leave yourself open to many possible issues. The seller would be your tenant and she may not move when you need her out. You would then have to possibly evict her to get possession. As for your final walk through before closing, I would do that just prior to going the the closing so you can do a good inspection of the property without any of the seller's personal property present and you can then see if any damage was done to the property. If the seller needs to more time to move out delay your closing until that happens. Ask your agent for assistance. Before your move forward with a tenancy situation I would consult a real estate attorney for further advice.

All the best,

Gary Geer

http://www.GaryGeer.com
1 vote Thank Flag Link Wed Dec 7, 2011
cac:

Just a quick comment on your "... i don't want her to mess up the walls or the floor or anything."

If the Seller does damage or loot the property their Short Sale anti-deficiency protections can be voided!

As you can read here:

"CA Senate Bill 458 Now Prohibits 1st/2nd Deficiency Judgments*"
http://www.trulia.com/blog/steve_ornellas_mba_re_mastersgri/…

-Steve
1 vote Thank Flag Link Tue Dec 6, 2011
This is a contract not a situation of being a nice or bad guy. If your agent has question on enforcement of the contract, they might want to ask their broker for guidance. You might also want advice from an attorney.

The fact that the seller's request keeps changing would make me suspicious. Give an inch, and you may never see them leave without a lot more heartache and stress. Make a clean break. Have them move out a minimum of two days prior to recording, do your walk through, and change the locks.

The ultimate decision is yours, but whenever you feel uncomfortable with the situation, go with your gut. Follow the contract as it is.
Web Reference: http://www.suearcher.com
1 vote Thank Flag Link Sun Dec 4, 2011
That's a good move, Cac.

No wants to be the "bad guy." But clearly a line had to be drawn. We all feel terrible about what is happening in this economy. That doesn't mean you should just keep giving. Good solution.
1 vote Thank Flag Link Sun Dec 4, 2011
Chalk it up to poor representation by the seller's agent. Ask the seller's agent to pay or find the sellers a hotel. Or you can call that agent's broker. Without a doubt they knew 30-40 days ago that someone else was going to be given possession. This is not good coaching on the agent's behalf. For that matter, what is YOUR agent doing to rectify this?
1 vote Thank Flag Link Sat Dec 3, 2011
Great advice on this board ccclaire! Another option you might consider is to delay closing by one week, if the seller needs another week to get out. That probably won't go over well with the short selling bank, but you could ask your agent to ask the listing agent to talk to the lien holder for a one week extension. It's not unheard of.

Good luck. Don't let the seller walk all over you!
Web Reference: http://www.kyleeroe.com
1 vote Thank Flag Link Sat Dec 3, 2011
“No” is a full sentence. The seller is basically making a counter offer to your purchase agreement. When I pay the seller for a home, it is MY home, not theirs, get out before I pay you. If the seller is being this uncooperative now, how will they be once they have your money?
1 vote Thank Flag Link Sat Dec 3, 2011
ccclaire,

This is a fairly common and unrecommended occurance. Being reasonable, understanding, and desiring a home that results in unwanted landlord status should be given careful consideration. There may be more at stake than is expected.

Prior to moving on with this consideration it would be in your best interests to process this with your attorney. It's always best to understand completely and there may be more here than meets the eye.

Good luck,

Bill
1 vote Thank Flag Link Sat Dec 3, 2011
if a rent back was not in your original purchase contract, you are not obligated to do so. I would extend the closing date and have a definite move out date so you don't begin paying and becoming responsible for a home you are not yet occupying. You also need to verify the property condition is acceptable to you and in the same condition as when you made the offer after they vacate and BEFORE closing escrow. Even though you love and want the house, don't let them pressure you to do something you don't feel comfortable doing! Their agent has no right to *tell* you that you *cannot* charge them rent either since you would be paying the mortgage during that time without an extension.

I am assuming from your post that this is a short sale, and again, even though you want the house, the seller has more to lose by not playing on your terms (no sale, breaching the contract, and possibly a foreclosure). They should have been securing a new place to live at the inception of your offer 2 months ago. One week has already turned into 2. Who's to say they will have a place in 2 weeks? What if they don't? If you close escrow before they vacate, you could end up having to evict them should they not move.

Have you discussed this with your agent? Let your agent know you are uncomfortable with the proposed rent back this late in the game and let them deal with the listing agent and seller. They can advise you on the best way to protect yourself and your purchase.

Stacey Wilson
BMC Real Estate
916.585.4077
CA DRE 01463631

Note: the above is not to be considered legal advice or any form of agency relationship, and are purely my opinion.
1 vote Thank Flag Link Sat Dec 3, 2011
Anytime after the closing I would require a rental agreement and proof of rental insurance. Make sure she understands the per diem clause also.
0 votes Thank Flag Link Fri Aug 9, 2013
If you can give her the time I would, but not without paying per Diem for the extra time there.
0 votes Thank Flag Link Fri Aug 9, 2013
I'm glad it worked out, too. I would have just told her to leave and you deserve to have immediate occupancy. That is the only way to work it out.

Mark
0 votes Thank Flag Link Tue Jan 10, 2012
Glad it worked itself out! Shows that sometimes we worry when we don't even need to :)
Web Reference: http://www.teamhybridre.com
0 votes Thank Flag Link Fri Dec 30, 2011
Great, I am very happy to hear it all worked out.
0 votes Thank Flag Link Mon Dec 26, 2011
That is great news, cac!

After a stressful thing like that, it is so wonderful that things turned out well.

Enjoy your new home! Congrats!

Suz
0 votes Thank Flag Link Fri Dec 23, 2011
Cac...

Hey we're happy to hear that it all worked out...
0 votes Thank Flag Link Mon Dec 19, 2011
Hi,

No....do not do this without a proper lease and without them paying rent. This sounds like trouble. If it were me? I'd wait until they were out to close.

Your agent needs to be helping you on this....and get rent in writing, a solid move out date and be careful.

Good luck,

Karen
0 votes Thank Flag Link Mon Dec 12, 2011
The answer is no, no, no and no. Especially if it is a short sale. The motivations can get skewed in short sales. The seller has to go as of close fo escrow. Period. It depends on the short sale bank but some even require them to vacate before to make sure that the seller will not stay in possession after the short sale. Go over your documents, get some leverage, and go back to the table.
0 votes Thank Flag Link Sun Dec 11, 2011
I would not close on this house untill the sellers have moved out / vacated the home. You are going to open yourself up to all kinds of liabilities if you close on a home and still allow the seller to live in the home.
0 votes Thank Flag Link Sun Dec 11, 2011
What does your purchase agreement say? Here in Indiana our contracts have a line that says "Closing will be on___________ Possession will be __________" typically for possession its "at closing" in some circumstances it will be negotiated that it takes place at another time (such as when the seller is waiting to close on home they purchased and need some time to move out.)

If a date was put into the Possession line, then the seller has until 11:59:59 pm to hand over the keys on that day, even if it's the same day as closing.

Also, were any amendments signed for the extra week?

Talk to your agent about the final walk through also. Maybe you can do it the day of closing in order to make sure that everything is in order.
0 votes Thank Flag Link Fri Dec 9, 2011
It's better to work out a solution. From my understanding, the seller has the right to stay for 3 days after the closing. And yes, she should be charged every day that she stays past that time frame.

During one of my sales, it was stated in the contract that if the seller stayed past the 3 day limitation, he would be charged at a rate of $200 per day. The seller moved out on the 3rd day.

Goold luck to you.
0 votes Thank Flag Link Fri Dec 9, 2011
You need to get your buyers agent to work for you! If you and are paying on the mortgage from date of closing, that means the home is yours. If the seller wants to rent it from you than you need compensation for that. Make it high or demand possession immediatley.
0 votes Thank Flag Link Fri Dec 9, 2011
make the price of rent so high that she will want to move instead.
0 votes Thank Flag Link Fri Dec 9, 2011
What does your contract say? This ia sticky situation. If you stipulated that you want to take possession at closing then the seller should move out. It is best to get the agents to encourage her to do her best to provide the keys at closing. Do you have a place to stay if she does not move? Explain that there is a cost to you. You are paying for the house at closing so she no longer has claim to the house and should rightfully pay rent if she wants to stay. The seller's agent should know that. Get a written agreement for rent and a deposit to cover and damages. If she does not agree to that then she needs to get her things out by the closing date and provide the keys when she gets the check. Title usually passes at closing unless otherwise stipulated.
0 votes Thank Flag Link Fri Dec 9, 2011
Sounds like the seller is not very motivated to get things moving. I would just tell them that you have to be out of your current place and will be moving in right after closing!
0 votes Thank Flag Link Wed Dec 7, 2011
If you are willing to allow the seller to stay post closing then I would ONLY do so with a clear agreement in place. We refer to them here in NJ as "use and occupancy" agreements and your attorney should be able to draft one to cover your situation. Seems to me that you should be covered for your new expenses at minimum so the accommodation to the seller is financially neutral to you. In other words, at minimum your mortgage expense for the period, taxes, utilities.

I would not do this without an agreement in place. If you can't get one in place, it may be best to extend the closing date. Talk to you attorney to be sure you are protected.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results.
0 votes Thank Flag Link Wed Dec 7, 2011
Get a lawyer and get tough. You need to stay in control of the situation. And you certainly shouldn't have to worry about blackmail or threats--actual or implied, such as damage to the house.

Good luck.
0 votes Thank Flag Link Tue Dec 6, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
I believe the safest course of action would be to ask for the extension of escrow for the time needed. Make sure you talk to your loan provider to ensure your mortgage rate is locked for those weeks.
Web Reference: http://www.icaresac.com
0 votes Thank Flag Link Sun Dec 4, 2011
Thanks everyone!!

I have talked to my agent, she also thought it's unreasonable for them to make that request and she advised us not to agree on the 2 weeks stay. So we asked her to tell the listing agent not only we denied that request, we would also like to ask the seller to move out before closing.

They already changed from 1 week with rents to 2 weeks without any rents before we even close the deal. That really makes me wonder whether they are trustworthy or not. Who know if the seller will actually move out after 2 weeks?

This is really frustrating because we feel like they're just trying to take advantage of us while we were trying to be nice.
0 votes Thank Flag Link Sat Dec 3, 2011
ccclaire02:

While normally just a simple request to have more time to move, there are potential risks and considerations that must be weighed by A Buyer when the Seller wants to maintain possession after close of escrow. My understanding is that allowing a Seller to occupy the property after the original possession date creates tenancy rights. As such, issues common with rental property come into play.

The following document is an excellent source for understanding the "ends and outs" of renting from both the Landlord and Renter positions. http://docs.Steven-Anthony.com/Landlord-TenantGuideCA2010.pdf

Everyone has a different level of personal risk aversion. Right now, this seems like a "need" versus "want" decision. Personally, if I were in the same situation I would not grant the Seller's request because I would need to know secondary circumstances after the fact would not lead me to kicking my own backside; however, if I had such a temporarily lapse in judgment I would want all of the following terms understood by both parties, located on a single page, and agreed to before moving forward:

1) The exact terms of possession
2) Compensation
3) Late charges
4) Responsibility for utilities
5) Entry rights
6) Responsibility for maintenance
7) Assignment/subletting
8) Responsibility for insurance
9) Any other special terms deemed necessary.

Section two of CAR Form Purchase Agreement Addendum (PAA) was created to address the considerations above when possession is delayed. I would highly recommend you cover section two with your Realtor® to decide whether its use might be appropriate in your situation.

Or, "Just Say No!"

Best, Steve
0 votes Thank Flag Link Sat Dec 3, 2011
As Jim says, "No!" is a complete sentence.

But more importantly, what do YOU want to do? You say that you're afraid that she'll vandalize the property before she leaves, but is that a reasonable fear?
0 votes Thank Flag Link Sat Dec 3, 2011
This is a sticky-wicket of a situation. First, agents on this board can't help you because you are still in contract with your own agent. We cannot interfere in another REALTOR's® transaction. It's against the Code of Ethics.

Second, I will state for other readers in a similar situation: if a buyer has signed an arm's length agreement with the short sale bank, there can be no secret arrangements or rent-backs without full disclosure to the short sale bank. Violation of an arm's length agreement could be considered mortgage fraud, and buyers who have questions about this should obtain legal advice.

You also need to ask your agent for advice. If your agent is unable to give you advice, ask your agent's broker for advice.

Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
Sacramento Short Sale Agent

Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
0 votes Thank Flag Link Sat Dec 3, 2011
The question you need to ask yourself is 'what if they do not move out in two weeks?'
Good luck
0 votes Thank Flag Link Sat Dec 3, 2011
You are under no legal obligation to allow her to remain beyond the day of closing. If the Seller wishes to stay there should be a lease drawn up and it goes without saying that they will have to pay rent.

You should not be dealing with the listing agent and unless you foolishly allowed them to act as your buyer broker as well. This is known as "dual agency" and as your learning you have no real representation. If you have a separate buyer broker they should simply tell the listing agent to go pound sand that the seller has no options and must be out of the house on the agreed upon date. If you don't have a buyer broker who is capable of doing their job and taking are of business for you, then I would suggest speaking with an attorney. I would also tell the listing agent that you will not be allowing the Seller to stay, don't want to hear another word about it, that you will be filing a complaint with the California Real Estate commission against them if they don't get their seller out of the house and that both they and the seller will be hearing from your attorney shortly.

Sounds to me as if the seller has some problems (not yours) and that the listing agent is either a moron or related to the Seller.

If you haven’t' signed any documents allowing her to stay, tell the listing agent she and all of her stuff must be gone on the day of closing and that you will be doing a walk through prior to closing and expect the house to be in perfect condition or that you will demand that the closing agent escrow money form the Sellers proceeds to correct any damages.
0 votes Thank Flag Link Sat Dec 3, 2011
Ccclaire,
If you close on this deal with the current owner still in the house and not planning an immediate exit, you become a landlord and they become your tenant. Read the landlord tenant laws for California and consider this carefully.
One week has become two, what are the chances they will want three, four, six...? Is this a short sale? If so, you may not be able to close and rent to them without committing fraud. Most banks won't approve a short sale under these conditions. If it's a regular sale, try to avoid it at all costs. You should at least collect your carrying costs if they stay the week; you are paying the mortgage from the day the house closes.
It’s nice to be kind, but this could easily become a nightmare, tread very carefully and consider getting legal advice before you make any final decisions.
0 votes Thank Flag Link Sat Dec 3, 2011
Please don't mistake my comments as any form of legal advise--it's not.

Assuming that it contains no such request for her to overstay the closing, it's been my experience that a buyer doesn't have to allow a seller to do that. A seller once threatened to cancel the sale, because I wouldn't let her have her way on a similar issue. My title agent informed me that RESPA protected me in the matter, and guaranteed me triple damages had the seller tried to force the issue. My attorney affirmed my title agent's comment, and expounded on it.

Have an attorney review your P&S, and advise you accordingly.
0 votes Thank Flag Link Sat Dec 3, 2011
There are always concerns with a post-settlement possession. Is the home seller going to maintain insurance on the property for the week or two. What guarantees do you have that the home will be in acceptable shape after the seller moves out?

You can require an escrow at the closing. The seller will place X amount of money into an escrow account in case there is any damage in the week or two that they stay in the house.

You start paying for the home the day you close on it so it makes sense that the seller should pay you rent. If they stay for two weeks, that is half a mortgage payment plus half the taxes for the month.

Most agents and buyers/sellers don't like to do this because of all the questions and liability concerns. It would be more acceptable to change the closing date by a week or two.

Hope this is of some help.

Regards,

Joe Finnerty
Prudential Patt White Real Estate
Lehigh Valley, PA
0 votes Thank Flag Link Sat Dec 3, 2011
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