Ewiz, Home Buyer in Salt Lake City, UT

We have just recieved an approved price on a short sale we are interested in, but now the seller wants us to stay in the home 30 days after closing?!?

Asked by Ewiz, Salt Lake City, UT Mon Jun 27, 2011

We've received an approved price and want to move forward on the short sale but in order for the seller to sign the bank agreement he wants us to allow him to remain in the home for 30 days after closing. Our realtor has put in the paperwork that the seller will vacate the property 30 days after closing. Is that enough to cover ourselves? My concern is...when the 30 days is up, how do we make sure he actually leaves to property? We've thought of getting a $5000 check from the seller and we will give the check back if he leaves the property when the 30 days is up, but I don't know if that is all we can and should do. Also, we were told by our realtor that a rental/lease agreement would make it more difficult for us to make him leave after the 30 days is up because then we would have to go through eviction. If we don't rent we can basically kick him out after 30 days if he hasn't already left. Is this true? Any advice on what to do????

Help the community by answering this question:

Answers

11
I suspect from the bad advice that you are getting that you are using the sellers agent as your agent. The advice of the agent is only benefitting the seller and is not in your best interest. I suspect that the short sale lender would cancel the short sale approval if they were aware that the person who is asking them to forgive a large amount of debt wants to remain in the house for an additional 30 days.

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?
1 vote Thank Flag Link Tue Jun 28, 2011
That would make me very nervous too... if there have been no extensions on the closing date from the bank chances are very good they would extend closing date, you become a" landlord" after closing if you have no experience it could be the biggest nighmare of your life! (There is a reason so many landlords are getting out of the business!!)
Web Reference: http://www.shanekhughes.com
0 votes Thank Flag Link Wed Nov 30, 2011
Don't do it. . No amount of paperwork will kick him out automatically if he doesn't want to leave.

Aram Arakelyan
Your La Broker for Life!
Realty Needs Network
0 votes Thank Flag Link Tue Sep 6, 2011
Chances are that you have a binding contract regardless of a 30 day rent back addendum that the seller and agent are attempting to maneuver. Also that could be a huge conflict with the Short Sale Approval letter. Consult your own representation and review all bank approved documents carefully so that you are not in violation of the pending agreement.
0 votes Thank Flag Link Tue Jun 28, 2011
I am not an attorney so take this for what it is worth.

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.

Micah Olson
Keller Williams Realty
http://www.UtahLoanHelp.com
801.805.4900
Web Reference: http://www.UtahLoanHelp.com
0 votes Thank Flag Link Tue Jun 28, 2011
If the seller continues to insist on staying for 30 days, walk away from this home. There are far too many issues that can arise including everything mentioned in previous answers as well as insurance and liability concerns.
0 votes Thank Flag Link Tue Jun 28, 2011
Don't do it. Anytime you allow someone to stay in your home for that length of time after a closing, you are just asking for trouble. Whether you charge him rent or not, you have allowed him to stay, and you will in all likelihood have to evict him if he chooses not to leave. No amount of pre-signed paperwork will kick him out automatically if he doesn't want to leave.

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.
0 votes Thank Flag Link Tue Jun 28, 2011
Hi Ewiz,

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,

Randy Pereira
Web Reference: http://www.trust2move.com/
0 votes Thank Flag Link Tue Jun 28, 2011
What is the main reason for the Seller wanting to stay and additional 30 days? Is it time to move or what is their motivation? I would not agree to the Seller staying in the property an additional 30 days. It makes things entirely too complicated. Once you close and fund, possession of the property will take place on that day or 24 hours thereafter. It is yours and that should be it.

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.
0 votes Thank Flag Link Tue Jun 28, 2011
Ewiz,
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?
0 votes Thank Flag Link Tue Jun 28, 2011
Most 'Post Settlement Occupancy Agreements' require the seller to put money in escrow until after they've moved out to cover any potential issues. Your agent should know about how it's handled there. If he/she doesn't, contact whomever is handling the closing and ask them.
0 votes Thank Flag Link Tue Jun 28, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer