I did not see in your question any offer by the seller to pay rent for the 30 days. Do they also expect to stay for free in your new house?
I would think that even without a rental agreement you would have an implied agreement based on your actions. So I do not know if that makes a big difference.
As for the $5,000 check it is a good idea, but do you think that the seller will actually have that much money? The check may just bounce. You could look at the HUD-1 that has been prepared for the closing and see if they are getting a cooperation bonus from the first mortgage. Sometimes banks will pay an amount around $3,000. If it were me I would ask for rent, and a security deposit. I would also want it to be clear that they will be expected to carry insurance to cover liability and property.
Another idea would be to have the sellers agent ask for a 30 day extension from the bank(s) for closing. If it was granted the sellers would not need to live there after you own it. The major risks I see are in the prior owner damaging the property, not moving out, or causing a liability of some kind that you are responsible for.
You may want to ask the eviction questions to an attorney. It probably wouldn't cost too much to consult with someone for 30 minutes about how to set this up.
Keller Williams Realty
Besides, the seller already agreed to turn over possession of the property at closing in the original contract did he not? You are under no obligation to make modifications to the original agreement.
I'm going have to agree with John Juarez on this one (First Answer).
I would strongly advise against letting the seller stay in the home after closing. This is just setting yourself up for failure, and additional headaches. This truly sounds like you are working with the Seller's Agent.
You should have a signed sales contract prior to the short sale bank approval? If so, have your agent review the contract and any short sale addenda that was signed....
If I'm not mistaken, the seller's lender will also make it very clear that the previous owner should not remain in the home as a tenant of any kind, after the short sale has closed/funded. (Basically, keeps people from gaming the system). You might want to have your Agent look into that as well.
Hope this helps,
The $5000 check is another concern. If the Seller is short selling his property, how on earth is he going to have $5000 in good funds?
I think you should withdraw the paperwork that states the Seller with vacate in 30 days and stick with the normal language that is in the REPC.
I would talk to a lawyer to see if you should move forward with this. You can have the lawyer draft a 'use and occupancy' agreement for post-closing that will protect you. Many will have the seller put money in escrow while they remain in the house, etc.
The one thing that may put a snag in this is that this is a short-sale. Normally, in my experience, the money put in escrow has come from proceeds on the sale. Obviously, because this is a short sale, there will be no proceeds. Will the seller have money to put in escrow so you are covered? Will he/she be able to pay you 'rent' during that time or is he asking for you to do it out of good will?
Finally, is there any way you can extend closing a bit to avoid this situation entirely?