Financing in Los Angeles>Question Details

Joe, Home Buyer in Utah

what does close of escrow plus 3 days mean?

Asked by Joe, Utah Sat Oct 16, 2010

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Hi Joe, I see you are from UT, but your question is about a property in CA, so I will assume you are buying in CA.

“…close of escrow plus 3 days…” most likely means the Seller needs/wants additional time to vacate the property. While normally just a simple request to have more time to move, there are potential risks and considerations that must be weighed by the Buyer. 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 comes into play.

Everyone has a different level of personal risk aversion. Personally, if I were in your shoes, 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, Revised 4/08) 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.

Best, Steve
2 votes Thank Flag Link Sat Oct 16, 2010
I am dismayed to see that all of your answers are from the point of view of the buyer and the buyers potential risk in allowing the seller to remain an additional 3 days after escrow has closed. Well, being a seller in need of an additional 3 days, I take issue with this. Because escrow is not closing on the original date set(due to buyers problems with funding) and because I have no guarenteed new closing date and require a 48 hour notice to schedule movers to pick up my final belongings I will most likely need to remain in the house a minimum of 24 hours after escrow is closed. Why should I be penalized or regarded as some sort of risk because the buyers funding was a disaster? What recourse do sellers have when the closing date keeps getting postponed?
1 vote Thank Flag Link Fri Feb 17, 2012
Hi Joe,

It means that the sellers has asked to stay in the house 3 days after the escrow has closed,this is typical for many sellers in today's market ,that way the sellers make sure that the house has closed then they move out .Good Luck !
0 votes Thank Flag Link Mon Apr 7, 2014
It means that you agree to close escrow on the property and allow the current Seller to stay in the home for 3 days after the escrow closing.

It is common. The only issue that may come up is liability insurance and that can be remedied easy enough.

You can use a Purchase Agreement Addendum which will lay out clearly the amount of days and at what price if any. It also will allow for proceeds to be held in escrow until the Seller successfully fulfills his obligation to move.

Once you purchase the home it is yours to carry the proper insurance to cover any liability situation.
So it is on the buyer to make sure you have proper coverage. No differnet than if you going to rent the home. consult a licensed Insurance agent for specifics in your city and state.
0 votes Thank Flag Link Wed Apr 2, 2014
Hello Joe.
All of my fellow Realtors are right on the money with their answers. There can be a number of reasons why the seller would need the additional 3 days to vacate the premises but when all is said and done, I would say that's a deal breaker solely on the fact that there is to much liability that simply is not worth the risk for you. There are forms that can protect your interest, but what good would they be if the home burns down in a fire? You can easily see just the thought of that would make you reconsider strongly negotiating the additional 3 days. Good luck.
0 votes Thank Flag Link Sat Oct 16, 2010
Hi Joe, I live in the San Fernando Valley just north of LA and the practice of "COE+3" is common here, but not so much in Los Angeles proper. It means that you first close escrow, then 3 days later you get the keys to the home. As mentioned below, there is some liability there, plus you are paying for them to live in your house for three days, plus you may not have any options should the property be damaged during their move. As you can see, I am not a fan of COE+3, and advise my clients to counter it out of any agreement they are asked to sign. In Los Angeles proper, the majority custom is that the property be vacated by the owners 5 days prior to closing, so you have time to look at the property before close of escrow in case there is any damage that wasn't there before the move.
0 votes Thank Flag Link Sat Oct 16, 2010
This term is generally used to describe when the Seller will transfer possession of the property. These extra days give the Seller greater assurance that the transaction will actually close before they move out.
0 votes Thank Flag Link Sat Oct 16, 2010

That just basically means your seller wants 3 days to hAnd over the keys after the close of escrow. It allows the seller to have a little bit more time to iron out they're moving process.

Some sellers move out and hand over possession at the close but it is quite common where the seller may need more time to move out this why they will ask for more days after the close of escrow to hand over the keys.

I hope this helps

Daniel Howard
Real estate guide
Robert pitts estates
Beverly hills,ca,90210
0 votes Thank Flag Link Sat Oct 16, 2010

The plus 3 days simply means the seller wants to close the deal (get their money) and then you give 3 days before they have to hand over keys. Which means, 3 days of you paying principal and interest on a home you can move in to.

We are seeing this more with short sale transactions. Particularly homes that have tenants. However, go over the numbers with your loan officer and know what the cost is for you.

Web Reference:
0 votes Thank Flag Link Sat Oct 16, 2010
This would depend on what it relates to. It is giving an extension of 3 days past escrow for something.
Web Reference:
0 votes Thank Flag Link Sat Oct 16, 2010
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