Close on first home on Wednesday, might not take possession until 30 days... advice please

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JJP88
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Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JJP88 » Sat Aug 17, 2019 8:44 pm

First time homebuyer, and I hope I am worrying over nothing but would like some input. So when my agent and I drafted the agreement she recommended and I agreed to give the sellers 30 days to move. The realtor recommended this because I was at the top of what I was comfortable with, and I had lost out on 3 houses already in similar situations. Purchase agreement gives 30 days no rent but they keep utilities until possession, and if they need time afterwards it is a $100 a day.

Now that I am nearing the finish line, which has been a headache I wish not to do again for 20-30 years, I see that such an agreement puts me at quite a bit of risk. No excuse, but the realtor made it sound like this is not out of the ordinary or anything. I know that I should have looked out more for myself, all I can plead is that when under pressure I do not make good decisions. Guess I did not do enough research on how to buy a house.

Only thing I can do is move on, and recover best I can. I hope I am making a mountain out of a molehill, but want to plan for the worst hope for the best.

Questions:

1. I realized today that once I sign the closing I become liable for the people on my property, how do I best protect myself? I plan on calling my insurance agent on Monday when they open to discuss my mistake.

2. I have not seen the house since inspection, and don’t know what purpose doing a walkthrough prior to close makes with them keeping possession for longer. How do I make sure the house is intact when they do move out? The agreement only says for them to maintain it until closing, unless I am missing something (which is likely) they have no obligations after closing to maintain.

3. Is there any other advice you can give me about other things I should be worried about.

They are closing on their new house after I close on my house, and I know they are packing as if intending to move sooner rather than later. Hopefully I am worrying about nothing.

Thanks for reading.

mhalley
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by mhalley » Sat Aug 17, 2019 9:06 pm

1. Umbrella policy.
2. Too late, should have had a clause for final walkthrough. What will you do if they change the oil in their motorcycle in the living room?
3. Do anything that you thought you might want to do in the near future before you move in. Putting in new floors or carpet, painting, etc are all much easier before you move in.

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JJP88
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JJP88 » Sat Aug 17, 2019 9:08 pm

mhalley wrote:
Sat Aug 17, 2019 9:06 pm
1. Umbrella policy.
2. Too late, should have had a clause for final walkthrough.
3. Do anything that you thought you might want to do in the near future before you move in. Putting in new floors or carpet, painting, etc are all much easier before you move in.
Figured as much, but wondered if I should try to negotiate for one before closing. I mean technically I can still walk away before I sign the papers, I know there will be other repercussion but it is an option.

Yeah having floors and painting done before move in.

Thanks for the reply.

stan1
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by stan1 » Sat Aug 17, 2019 9:20 pm

You should make them sign a no-cost lease (since they are basically renting it from you albeit at no cost). Ask your realtor. It may not be too late. Your realtor should have a standard rental agreement for situations like this. Also might not be too late to leave the value of one month's rent in escrow until after the 30 days in lieu of a deposit. Basically I would not hesitate to add this stuff in at the last minute. It happens all the time. Your realtor should have known better. I've done rent backs before and the realtors involved took all the appropriate steps.

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JJP88
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JJP88 » Sat Aug 17, 2019 9:28 pm

stan1 wrote:
Sat Aug 17, 2019 9:20 pm
You should make them sign a no-cost lease (since they are basically renting it from you albeit at no cost). Ask your realtor. It may not be too late. Your realtor should have a standard rental agreement for situations like this. Also might not be too late to leave the value of one month's rent in escrow until after the 30 days in lieu of a deposit. Basically I would not hesitate to add this stuff in at the last minute. It happens all the time. Your realtor should have known better. I've done rent backs before and the realtors involved took all the appropriate steps.
If I had to do it all over again I would not go with this realtor, she was a recommendation from my mother’s church friend. My friends had no recommendations for me, and I did not want to use somebody I knew from high school.

I reread my agreement again and they are to maintain condition until possession, and the inspector I used dis 360 degree photographs that I can use if necessary.

I will look into your suggestions, thanks.

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gasman
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by gasman » Sat Aug 17, 2019 9:32 pm

I used to live n a state where possession after closure (up to 30 days) was customary. Like everything else it was negotiable.

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LilyFleur
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by LilyFleur » Sun Aug 18, 2019 12:52 am

Your realtor should be protecting your interests. (You don't need to be blaming yourself here.)

Are you getting a discount on realtor fees because of the church friend recommendation? Because even WITH a discount, you are paying your realtor a good amount of money to look out for you. (Google "realtor fiduciary duty".)

Who will be insuring the previous owner's contents of the house after you take ownership of the house? Does your insurer know that the previous owner will be occupying the house for a month, before you move in, without any kind of a rental agreement? Maybe there are standard clauses in the purchase/selling agreements that cover this. It would be good to make sure and read it for yourself.

I wish you the best!

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JJP88
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JJP88 » Sun Aug 18, 2019 7:19 am

LilyFleur wrote:
Sun Aug 18, 2019 12:52 am
Your realtor should be protecting your interests. (You don't need to be blaming yourself here.)

Are you getting a discount on realtor fees because of the church friend recommendation? Because even WITH a discount, you are paying your realtor a good amount of money to look out for you. (Google "realtor fiduciary duty".)

Who will be insuring the previous owner's contents of the house after you take ownership of the house? Does your insurer know that the previous owner will be occupying the house for a month, before you move in, without any kind of a rental agreement? Maybe there are standard clauses in the purchase/selling agreements that cover this. It would be good to make sure and read it for yourself.

I wish you the best!

Seller pays realtor, generally 3% of sale of home.

I am texting my realtor on Monday to see where the sellers are at on their timetable to move on the house they are closing on an hour after I close. After I talk to my realtor I am calling my insurance company to make sure everything is okay. I read the agreement again, and it says they is an obligation to maintain the house in present state until possession. Does not say anything about who has legal responsibility for injuries, and that is what I am most worried about.

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nps
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by nps » Sun Aug 18, 2019 7:36 am

JJP88 wrote:
Sun Aug 18, 2019 7:19 am
Seller pays realtor, generally 3% of sale of home.
It might come from their side of the ledger, but the buyer actually pays the realtor. Only one party is bringing money to the table and it isn't the seller.

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JJP88
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JJP88 » Sun Aug 18, 2019 7:50 am

nps wrote:
Sun Aug 18, 2019 7:36 am
JJP88 wrote:
Sun Aug 18, 2019 7:19 am
Seller pays realtor, generally 3% of sale of home.
It might come from their side of the ledger, but the buyer actually pays the realtor. Only one party is bringing money to the table and it isn't the seller.

Suppose that is one way of looking at it. They do have to get paid somewhere though.

I am comfortable with the house I am getting and the price. House appraised for what I am paying and negotiated to where they put in $3000 worth of repairs, guy was a DIYer and the electric was a fire hazard. Plus my interest rate is 2.875% (2.96% with closing costs), so I generally feel I it is a good deal.

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Watty
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Watty » Sun Aug 18, 2019 8:25 am

If you Google "buyers remorse" you will see lots of info and this is common. Even without the delayed possession you would likely be having a lot of second thoughts now.

One other risk is that if this deal falls apart then it could be six months before you can find and buy another house and interest rates could be much higher then.
JJP88 wrote:
Sat Aug 17, 2019 8:44 pm
The realtor recommended this because I was at the top of what I was comfortable with, and I had lost out on 3 houses already in similar situations.
It sounds like you are in a hot real estate market and you don't have a good "plan B" if this deal falls apart at the last minute.

At this point the "die is cast" and there really is not a lot you can do without creating a much bigger mess that would take lawyers to unwind so the best thing to do is to just try to relax. People do this all the time.

The only thing to do would be to double check to make sure your new home insurance policy will cover any major damage before you occupy it. Most likely the lender and title company would have caught that since they would be out a lot of money if the house gets hit by lightning and burns down before you occupy it.

I would suspect that part of the closing paperwork will include a short term rental agreement and a security deposit to cover any damages but you just don't realize it.

JJP88 wrote:
Sat Aug 17, 2019 8:44 pm
and if they need time afterwards it is a $100 a day.
Just FYI, the daily cost should have been a lot higher than a hotel would cost so that they would have a lot of incentive to still move out on time if they face some delay in moving to their next place.

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JJP88
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JJP88 » Sun Aug 18, 2019 8:40 am

Watty wrote:
Sun Aug 18, 2019 8:25 am
If you Google "buyers remorse" you will see lots of info and this is common. Even without the delayed possession you would likely be having a lot of second thoughts now.

One other risk is that if this deal falls apart then it could be six months before you can find and buy another house and interest rates could be much higher then.
JJP88 wrote:
Sat Aug 17, 2019 8:44 pm
The realtor recommended this because I was at the top of what I was comfortable with, and I had lost out on 3 houses already in similar situations.
It sounds like you are in a hot real estate market and you don't have a good "plan B" if this deal falls apart at the last minute.

At this point the "die is cast" and there really is not a lot you can do without creating a much bigger mess that would take lawyers to unwind so the best thing to do is to just try to relax. People do this all the time.

The only thing to do would be to double check to make sure your new home insurance policy will cover any major damage before you occupy it. Most likely the lender and title company would have caught that since they would be out a lot of money if the house gets hit by lightning and burns down before you occupy it.

I would suspect that part of the closing paperwork will include a short term rental agreement and a security deposit to cover any damages but you just don't realize it.

JJP88 wrote:
Sat Aug 17, 2019 8:44 pm
and if they need time afterwards it is a $100 a day.
Just FYI, the daily cost should have been a lot higher than a hotel would cost so that they would have a lot of incentive to still move out on time if they face some delay in moving to their next place.

For my area, $3,000 a month is unheard of for an apartment, and that was the way I looked at when the paperwork was drawn up. Didn’t think to compare it to a hotel.

My plan B if this does end in disaster is just stay in the apartment, brother might not be too happy but he doesn’t have another person lined up (he plans on taking on the costs alone).

While my realtor may not have been the best to work with, my lender has been wonderful to work with. The loan is actually staying at the the bank so she has more incentive to make sure everything is in good order, or at least I think so.

Thanks for the reply.

Lexi
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Lexi » Sun Aug 18, 2019 8:46 am

Make sure your homeowners’ policy covers what could happen during this period.

The post 30 day at $100 a day would bother me. Is there a time limit on that? I would tell them ahead of the closing that you will be scheduling work for immediately after possession and will be in and out with contractors to scope out the work before then. Also, that you will schedule it for 31 days out and, by the way, sooner would be better if they can clear some rooms. Let them know that you are not going to sit back and let them dawdle.

We did once have a provision of the sellers staying in the house after closing but it was only a few days.

epilnk
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by epilnk » Sun Aug 18, 2019 10:39 pm

We did a rent back on our most recent house. The sellers were relocating but their purchase fell through just as they were listing their own house. When we were asked if we would consider a rent back we jumped at it - it was a hot market with low availability, and since we were moving within town we had no deadline so it was a way to move our offer to the top of the pile. It’s common enough that there is a standard and accepted way of doing it and the realtors handled the paperwork. I don’t recall the details unfortunately but there were protections in the contract and I believe the rent was handled through escrow, which only settled after we took possession. It worked well.

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unclescrooge
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by unclescrooge » Sun Aug 18, 2019 11:03 pm

Having the sellers rent back for a month or two is quite common.

They should, however, be paying your mortgage plus taxes plus insurance.

ndpage
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by ndpage » Mon Aug 19, 2019 12:22 am

I am closing on a house next week. The sellers were a little confused on when they could and couldn't move, so at one point they wanted to close earlier than I had planned and rent for two weeks. (I'm still in a rental for a while longer, and leaving on vacation after the closing.) Units their size around here rent for $1900/month, so my realtor recommended quoting $40/day for the length of the vacation to be nice, and $200/day thereafter to be firm.

Instead, they figured out how to move earlier and are still paying me $400 to close the day they wanted to cover half a month of property taxes and HOA fees for the time I am on vacation.

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Northern Flicker » Mon Aug 19, 2019 12:31 am

You should make them sign a no-cost lease (since they are basically renting it from you albeit at no cost).
This is likely a terrible idea. The realtor should have had the appropriate paperwork executed to allow occupancy after closing, spelling out the terms. Executing a lease likely would disqualify the buyer from an owner-occupant mortgage leading to paying a higher investor loan rate. And by establishing a landlord-tenant relationship, if the sellers don’t move in 30 days as agreed, the buyer likely would have to go through the legal eviction process to force them out.

CurlyDave
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by CurlyDave » Mon Aug 19, 2019 12:44 am

Northern Flicker wrote:
Mon Aug 19, 2019 12:31 am
... if the sellers don’t move in 30 days as agreed, the buyer likely would have to go through the legal eviction process to force them out.
I know that in my state if they don't have a lease they would have "squatter's rights" and would have to be evicted anyway.

I would not worry too much about this. The seller's clearly have assets (your money), and since they do, are big fat juicy targets for a lawsuit if anything goes wrong.

Just get your insurance lined up and all will be well.

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by neilpilot » Mon Aug 19, 2019 9:12 am

Other's have mentioned an escrow to cover last month's rent. I would actually have your lawyer or closing agent arrange a significantly larger (separate) escrow that you would release only after the home has been vacated and you have conducted a satisfactory walk thru. The escrow should be sufficiently large to protect you if a fixture or appliance that should have remained was missing, the prior owner changed his motorcycle oil in the living room, or some other issue was revealed during that walk thru.

rkhusky
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by rkhusky » Mon Aug 19, 2019 9:32 am

Rent should have started immediately after closing. Damage deposit in escrow.

Jags4186
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Jags4186 » Mon Aug 19, 2019 9:36 am

This was a bad decision. I know it can’t be undone, but you now know for future.

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by jharkin » Mon Aug 19, 2019 9:40 am

30 days rent free?

Thats absolutely not typical in my area... if your realtor told you it was I would at least have got a second opinion or attorney review.

Where I live the usual practice would be a rent back with a written rental agreement and rent roughly equal to the PITI of the loan the buyer is taking on, along with damage deposits, etc.

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by tivattom » Mon Aug 19, 2019 9:44 am

When we bought our last house, we allowed the sellers to remain for 14 days after the closing. They had a LOT of stuff to pack up and remove from the house. I was very nervous about it, but in the end they did everything like they were supposed to. They asked for an extension on the 14 days and I said no. House was empty and clean when they left. The only thing we had to deal with was a dumpster in our driveway filled with lots of their household stuff that was scheduled to be picked up the following Monday.

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by bsteiner » Mon Aug 19, 2019 9:47 am

JJP88 wrote:
Sat Aug 17, 2019 8:44 pm
... when my agent and I drafted the agreement she recommended and I agreed to give the sellers 30 days to move. ...
Thanks for reading.
Was she your agent? Or was she the seller's broker's agent?

neilpilot
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by neilpilot » Mon Aug 19, 2019 9:55 am

bsteiner wrote:
Mon Aug 19, 2019 9:47 am
JJP88 wrote:
Sat Aug 17, 2019 8:44 pm
... when my agent and I drafted the agreement she recommended and I agreed to give the sellers 30 days to move. ...
Thanks for reading.
Was she your agent? Or was she the seller's broker's agent?
Since the OP made it a point of saying that the agent is being paid by the seller, that sort of sums it up in my mind.

GetRichQuick
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by GetRichQuick » Mon Aug 19, 2019 9:58 am

Aside from getting your insurance ASAP, I would really just relax. At this point, the sellers know the home much better than you do and are in a much better position to take care of it. You should have also gotten a sense of the kind of condition the sellers keep the home in - from your initial visits to the final inspection. I doubt the sellers will suddenly change. Also, as your realtor noted, you may not have gotten the house had you not included the delayed possession offer.

Good luck!

Lexi
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Lexi » Mon Aug 19, 2019 10:02 am

I think discussion of what rent should be required is not really relevant. If the seller stays rent free for a month that is actually a way of increasing the purchase price that was more palatable to the buyer.
What matters is assuring the condition of the house, covering damage if any, and getting a firm date that the buyer can count on beginning any work he plans to do before moving in.

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8foot7
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by 8foot7 » Mon Aug 19, 2019 10:05 am

Let this thread be exhibit A, or B, or whatever that a bad or even just mediocre realtor is little more than a tax on a real estate transaction.

neilpilot
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by neilpilot » Mon Aug 19, 2019 10:08 am

GetRichQuick wrote:
Mon Aug 19, 2019 9:58 am
Aside from getting your insurance ASAP, I would really just relax. At this point, the sellers know the home much better than you do and are in a much better position to take care of it. You should have also gotten a sense of the kind of condition the sellers keep the home in - from your initial visits to the final inspection. I doubt the sellers will suddenly change. Also, as your realtor noted, you may not have gotten the house had you not included the delayed possession offer.

Good luck!
Yes, but in my experience the buyer will typically conduct a final walk thru just prior to closing. When the seller's possessions have been moved out of the house. There's much damage that can be strategically hidden by the seller's possessions, particularly to flooring and walls. As an example, in a prior walk thru there was significant damage to a wood floor only visible after the seller's large oriental carpet had been removed.

That's why I and others have recommended a final walk thru after the house has been vacated, backed up by a damage escrow created at closing.

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MortgageOnBlack
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by MortgageOnBlack » Mon Aug 19, 2019 10:08 am

Although my buying situation didn't have this issue come up, I can relate to the OP in his worries.

Over-thinking, Over-analyzing, and Buyer's Remorse were all traits I suffered through while under contract and closing. I obsessed about everything that could go wrong with the transaction and after it happened I wondered if I got duped. The house was recently re-painted and re-carpeted and I couldn't help but wonder if a serious flaw was being covered up. Now, almost 3 years later, my house is still standing.

It's easy to get in the mindset that you will get taken advantage of, but odds are quite high the seller's house will be left exactly how you found it during the walk-through. During the initial walk-through, did you completely fall in love with the house? If so, please remember why you are going through this process and tune out all of your worries.

I wouldn't obsess about "30 days rent free". Perhaps, this is a big reason the seller accepted your offer because of your willingness to work them. I don't see the point in trying to have absolutely 100% the upper-hand in every transaction all the time. If you really thought the buyer's were terribly dishonest people, would you even want to buy from them anyway?

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Vanguard Fan 1367 » Mon Aug 19, 2019 10:17 am

My parents weren't happy with a house they bought where the folks took their time moving out. Other than my parents having to pay for a motel to have some place to stay it worked out. Hopefully in 30 days they will be gone and not taking advantage of their cheap 100 dollar a day rent beyond that.

I can understand why you did this, I can't blame you for not wanting to lose the house after losing a house before.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."

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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by michaeljc70 » Mon Aug 19, 2019 10:27 am

nps wrote:
Sun Aug 18, 2019 7:36 am
JJP88 wrote:
Sun Aug 18, 2019 7:19 am
Seller pays realtor, generally 3% of sale of home.
It might come from their side of the ledger, but the buyer actually pays the realtor. Only one party is bringing money to the table and it isn't the seller.
I disagree. Both parties are bringing something of value to the table. Using your argument if something is broken and the seller agrees to give you $1000 you are really paying yourself $1000 because the seller is bringing no money to the closing.

michaeljc70
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by michaeljc70 » Mon Aug 19, 2019 10:30 am

There should have been a deposit, walkthroughs, etc. I think it is too late and I would just hope for the best. I don't know if you used an attorney but either the attorney or real estate agent should have known better. I wouldn't have let them stay for free either. You are paying the mortgage, property taxes, etc. while they live there!

Nowizard
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Nowizard » Mon Aug 19, 2019 10:31 am

We recently moved but stayed in the house for about a week after closing at no cost. The purchasers did put in the contract that there would be a professional cleaning upon move out even before possession time was negotiated.

Tim

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8foot7
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by 8foot7 » Mon Aug 19, 2019 10:32 am

michaeljc70 wrote:
Mon Aug 19, 2019 10:27 am
nps wrote:
Sun Aug 18, 2019 7:36 am
JJP88 wrote:
Sun Aug 18, 2019 7:19 am
Seller pays realtor, generally 3% of sale of home.
It might come from their side of the ledger, but the buyer actually pays the realtor. Only one party is bringing money to the table and it isn't the seller.
I disagree. Both parties are bringing something of value to the table. Using your argument if something is broken and the seller agrees to give you $1000 you are really paying yourself $1000 because the seller is bringing no money to the closing.
You're not paying yourself $1,000 - you're paying $1,000 less.

NYCguy
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by NYCguy » Mon Aug 19, 2019 11:02 am

OP:

RELAX! It is highly likely everything is going to be OK. Yes, talk to your insurance broker and make sure you have proper coverage day one.

The fact your contract says they have to maintain condition until possession is very helpful. In the unlikely circumstance they actually destroy the house it would suck to have to sue them under the contract but that is unlikely. If the sellers strike you as reasonably decent people who are not likely abusing drugs you’re likely to be fine.

If you’re lucky it will be broom swept and clean but more likely it will look like someone just moved out. Don’t sweat that. Plan on doing your painting and flooring and what other changes you want to make before moving in. Make arrangements with your brother now to stay on for as much time as needed to get the house in shape. Living in a place while making even cosmetic changes is messy.

Do not sweat the fact you don’t have sellers paying the rent for the month. You note that you wanted to be an agreeable buyer to get the deal done. You made a reasonable decision. In a similar deal I had a massive penalty ($25k per month) if my seller did not get out in 30 days. Let’s just say that focused their mind on getting out on time.

Talk to your realtor about doing a walk-through immediately prior to closing. Consider shooting some video to document the general condition.

Be NICE to the sellers. It will go along way. Presumably they are not scheduling their move out day for day 30. Explain to them that you are scheduling your movers and contractors and ask for an open dialogue about their precise timing. Texting often works great.

If you get any sense that day 30 may slip explain to them that you have substantial dollars at risk with movers and contractors and they would need to make you financially whole in addition to paying you market rent. Based on what you’ve told us, they will be in breach of contract and that should not be taken lightly. However, even if they stay beyond day 30 as long as they compensate you it is unlikely to be worth escalating this into a lawsuit.

Buying-selling-and moving are stressful. Mentally prepare yourself to not sweat the small and medium things. A few months from now you will be settled in and all will be fine.

Good luck!
If your out-go is greater than your income, your upkeep will be your DOWNFALL.

LiterallyIronic
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by LiterallyIronic » Mon Aug 19, 2019 11:45 am

Lexi wrote:
Sun Aug 18, 2019 8:46 am
The post 30 day at $100 a day would bother me. Is there a time limit on that?
Heh. I would accept the $100/day for as long as they wanted to stick around. $3,000/month?! Thanks for paying my mortgage four times over! :D

JediMisty
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Location: Central NJ

Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by JediMisty » Mon Aug 19, 2019 12:03 pm

NYCguy wrote:
Mon Aug 19, 2019 11:02 am
OP:

RELAX! It is highly likely everything is going to be OK. Yes, talk to your insurance broker and make sure you have proper coverage day one.

The fact your contract says they have to maintain condition until possession is very helpful. In the unlikely circumstance they actually destroy the house it would suck to have to sue them under the contract but that is unlikely. If the sellers strike you as reasonably decent people who are not likely abusing drugs you’re likely to be fine.

If you’re lucky it will be broom swept and clean but more likely it will look like someone just moved out. Don’t sweat that. Plan on doing your painting and flooring and what other changes you want to make before moving in. Make arrangements with your brother now to stay on for as much time as needed to get the house in shape. Living in a place while making even cosmetic changes is messy.

Do not sweat the fact you don’t have sellers paying the rent for the month. You note that you wanted to be an agreeable buyer to get the deal done. You made a reasonable decision. In a similar deal I had a massive penalty ($25k per month) if my seller did not get out in 30 days. Let’s just say that focused their mind on getting out on time.

Talk to your realtor about doing a walk-through immediately prior to closing. Consider shooting some video to document the general condition.

Be NICE to the sellers. It will go along way. Presumably they are not scheduling their move out day for day 30. Explain to them that you are scheduling your movers and contractors and ask for an open dialogue about their precise timing. Texting often works great.

If you get any sense that day 30 may slip explain to them that you have substantial dollars at risk with movers and contractors and they would need to make you financially whole in addition to paying you market rent. Based on what you’ve told us, they will be in breach of contract and that should not be taken lightly. However, even if they stay beyond day 30 as long as they compensate you it is unlikely to be worth escalating this into a lawsuit.

Buying-selling-and moving are stressful. Mentally prepare yourself to not sweat the small and medium things. A few months from now you will be settled in and all will be fine.

Good luck!
+1. When I was selling my home to move into a house being built, the buyer afforded me to stay for a trivial amount of rent for several weeks to sweeten the deal. This relived my stress of not knowing when my new home would be done. I deep cleaned my old house so that it sparkled. The real estate agent said he had never seen a cleaner house. I also made them a cardboard display with all keys to everything taped to it and handed over the original manual for every appliance. Why? Because they were nice. Their religion includes numerology and they wanted to close on a specific, lucky day. Win-win. I think your contract covers you in an albeit vague way. And the suggestions above are great. :happy

michaeljc70
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by michaeljc70 » Mon Aug 19, 2019 12:07 pm

LiterallyIronic wrote:
Mon Aug 19, 2019 11:45 am
Lexi wrote:
Sun Aug 18, 2019 8:46 am
The post 30 day at $100 a day would bother me. Is there a time limit on that?
Heh. I would accept the $100/day for as long as they wanted to stick around. $3,000/month?! Thanks for paying my mortgage four times over! :D
But I don't think we know the numbers for the OP. Maybe it doesn't even cover the mortgage. And what does it cost to store your stuff and rent a place until they move out? You'd have to rent on a day to day basis like at a hotel.

Northern Flicker
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Northern Flicker » Mon Aug 19, 2019 1:07 pm

There should have been a deposit, walkthroughs, etc. I think it is too late and I would just hope for the best.
Also likely a bad idea. My belief is that there should be an occupancy after closing agreement in the sales agreement which explicitly states that it is not a landlord-tenant arrangement. This would also preclude any squatters rights. The OP should discuss the matter with his or her real estate agent if the status is not clear and the agent should be able to clarify the nature of the arrangement.

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nps
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by nps » Mon Aug 19, 2019 2:22 pm

8foot7 wrote:
Mon Aug 19, 2019 10:32 am
michaeljc70 wrote:
Mon Aug 19, 2019 10:27 am
nps wrote:
Sun Aug 18, 2019 7:36 am
JJP88 wrote:
Sun Aug 18, 2019 7:19 am
Seller pays realtor, generally 3% of sale of home.
It might come from their side of the ledger, but the buyer actually pays the realtor. Only one party is bringing money to the table and it isn't the seller.
I disagree. Both parties are bringing something of value to the table. Using your argument if something is broken and the seller agrees to give you $1000 you are really paying yourself $1000 because the seller is bringing no money to the closing.
You're not paying yourself $1,000 - you're paying $1,000 less.
Right. Or look at it this way: paying yourself = saving

michaeljc70
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by michaeljc70 » Mon Aug 19, 2019 4:53 pm

Northern Flicker wrote:
Mon Aug 19, 2019 1:07 pm
There should have been a deposit, walkthroughs, etc. I think it is too late and I would just hope for the best.
Also likely a bad idea. My belief is that there should be an occupancy after closing agreement in the sales agreement which explicitly states that it is not a landlord-tenant arrangement. This would also preclude any squatters rights. The OP should discuss the matter with his or her real estate agent if the status is not clear and the agent should be able to clarify the nature of the arrangement.
The contract is signed and finalized since she is closing this week. I'm not sure why the seller would agree to signing anything more at this point. Without a deposit, how do you propose the buyer recover any damage done by the seller? Damage can happen when moving out. The way it is now, the buyer would have to sue.

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LilyFleur
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by LilyFleur » Mon Aug 19, 2019 6:19 pm

NYCguy wrote:
Mon Aug 19, 2019 11:02 am
OP:

RELAX! It is highly likely everything is going to be OK. Yes, talk to your insurance broker and make sure you have proper coverage day one.

The fact your contract says they have to maintain condition until possession is very helpful. In the unlikely circumstance they actually destroy the house it would suck to have to sue them under the contract but that is unlikely. If the sellers strike you as reasonably decent people who are not likely abusing drugs you’re likely to be fine.

If you’re lucky it will be broom swept and clean but more likely it will look like someone just moved out. Don’t sweat that. Plan on doing your painting and flooring and what other changes you want to make before moving in. Make arrangements with your brother now to stay on for as much time as needed to get the house in shape. Living in a place while making even cosmetic changes is messy.

Do not sweat the fact you don’t have sellers paying the rent for the month. You note that you wanted to be an agreeable buyer to get the deal done. You made a reasonable decision. In a similar deal I had a massive penalty ($25k per month) if my seller did not get out in 30 days. Let’s just say that focused their mind on getting out on time.

Talk to your realtor about doing a walk-through immediately prior to closing. Consider shooting some video to document the general condition.

Be NICE to the sellers. It will go along way. Presumably they are not scheduling their move out day for day 30. Explain to them that you are scheduling your movers and contractors and ask for an open dialogue about their precise timing. Texting often works great.

If you get any sense that day 30 may slip explain to them that you have substantial dollars at risk with movers and contractors and they would need to make you financially whole in addition to paying you market rent. Based on what you’ve told us, they will be in breach of contract and that should not be taken lightly. However, even if they stay beyond day 30 as long as they compensate you it is unlikely to be worth escalating this into a lawsuit.

Buying-selling-and moving are stressful. Mentally prepare yourself to not sweat the small and medium things. A few months from now you will be settled in and all will be fine.

Good luck!
I agree with all of the above except: it is not the OP's job to be talking to the sellers. In fact, should there be legal problems, it could hurt the OP's case. OP is paying their own real estate agent to represent OP's interests. If I were in this situation I would talk to my real estate agent and let them know I was uncomfortable because of the potential liabilities, let them know I was disappointed my agent did not look out better for my interests, and if the agent said, oh, it won't be a problem...I would ask if the agent felt comfortable leaving half their commission in escrow until the walk through after move out was done so that damages could be covered. Why should OP bear the entire cost of potential repairs when their agent didn't properly protect their interests? Perhaps after OP speaks to the insurance company, none of this would be a worry, except, experienced homeowners know that a claim filed can raise the price of the house insurance premium, and then a second claim within (usually) 5 years could cause them to lose their insurance completely. In my state, the claim travels with the homeowner, so even if you would move to another house, you still wouldn't want to file a second claim before the 5 years were over.

Most BH's realize that real estate commissions (both for the buyer and the seller) are negotiable. I once had to tell my agent that I would not go through with a house purchase if she did not honor the terms of our agreement. (She sold an expensive home for me at full commission, with the agreement that she would only charge me half a commission on the purchase of my next, much less expensive, home. She tried to back out of our agreement at the last minute. It was a total fixer-upper and I only agreed to purchase it because the reduction in commission would enable me to fix it up enough to be able to live in it. Horrible cat pee damage that required a lot of work, including replacing dry wall that the cats had sprayed into!) I called escrow and told them that the deal was on hold until I worked it out with my agent. Please understand that I am a very nice person and all of this was very stressful for me, but I was not going to be able to inhabit a home with a stink that horrible. :o

P.S. The OP holds most of the cards right now. Unless OP signs at the close, the entire deal is off. OP's realtor should be very motivated to do whatever is required to keep the deal going.

NYCguy
Posts: 341
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by NYCguy » Mon Aug 19, 2019 9:17 pm

LilyFleur wrote:
Mon Aug 19, 2019 6:19 pm
NYCguy wrote:
Mon Aug 19, 2019 11:02 am
OP:

RELAX! It is highly likely everything is going to be OK. Yes, talk to your insurance broker and make sure you have proper coverage day one.

The fact your contract says they have to maintain condition until possession is very helpful. In the unlikely circumstance they actually destroy the house it would suck to have to sue them under the contract but that is unlikely. If the sellers strike you as reasonably decent people who are not likely abusing drugs you’re likely to be fine.

If you’re lucky it will be broom swept and clean but more likely it will look like someone just moved out. Don’t sweat that. Plan on doing your painting and flooring and what other changes you want to make before moving in. Make arrangements with your brother now to stay on for as much time as needed to get the house in shape. Living in a place while making even cosmetic changes is messy.

Do not sweat the fact you don’t have sellers paying the rent for the month. You note that you wanted to be an agreeable buyer to get the deal done. You made a reasonable decision. In a similar deal I had a massive penalty ($25k per month) if my seller did not get out in 30 days. Let’s just say that focused their mind on getting out on time.

Talk to your realtor about doing a walk-through immediately prior to closing. Consider shooting some video to document the general condition.

Be NICE to the sellers. It will go along way. Presumably they are not scheduling their move out day for day 30. Explain to them that you are scheduling your movers and contractors and ask for an open dialogue about their precise timing. Texting often works great.

If you get any sense that day 30 may slip explain to them that you have substantial dollars at risk with movers and contractors and they would need to make you financially whole in addition to paying you market rent. Based on what you’ve told us, they will be in breach of contract and that should not be taken lightly. However, even if they stay beyond day 30 as long as they compensate you it is unlikely to be worth escalating this into a lawsuit.

Buying-selling-and moving are stressful. Mentally prepare yourself to not sweat the small and medium things. A few months from now you will be settled in and all will be fine.

Good luck!
I agree with all of the above except: it is not the OP's job to be talking to the sellers. In fact, should there be legal problems, it could hurt the OP's case. OP is paying their own real estate agent to represent OP's interests. If I were in this situation I would talk to my real estate agent and let them know I was uncomfortable because of the potential liabilities, let them know I was disappointed my agent did not look out better for my interests, and if the agent said, oh, it won't be a problem...I would ask if the agent felt comfortable leaving half their commission in escrow until the walk through after move out was done so that damages could be covered. Why should OP bear the entire cost of potential repairs when their agent didn't properly protect their interests? Perhaps after OP speaks to the insurance company, none of this would be a worry, except, experienced homeowners know that a claim filed can raise the price of the house insurance premium, and then a second claim within (usually) 5 years could cause them to lose their insurance completely. In my state, the claim travels with the homeowner, so even if you would move to another house, you still wouldn't want to file a second claim before the 5 years were over.
.
That is a fair criticism of my advice. If you’re going to communicate directly with the sellers you have to know your own comfort level and ability not to say anything that is going to create legal problems for you. My personal experience is that 95% of real estate agents are mediocre to horrible and 1% are terrific, having worked with several dozen on multiple real estate transactions in multiple states. I’ve seen real estate agents create miscommunications and problems between buyer and sellers as often as resolving them. My bias is that I negotiate multibillion dollar transactions as part of my business and I am very comfortable communicating directly and forthrightly with people. I am a tough judge of real estate agents and I’m too quick to suggest that people should communicate directly.

OP: whether communicating directly or through your agent, put your seller at ease, try to understand their problems and concerns and accommodate the sellers for things that should not matter to you. Be clear what does matter to you and firm with your resolve and legal rights on those points. YOU WILL BE FINE.
If your out-go is greater than your income, your upkeep will be your DOWNFALL.

Freetime76
Posts: 210
Joined: Wed Jun 26, 2019 8:26 pm

Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Freetime76 » Tue Aug 20, 2019 9:33 am

8foot7 wrote:
Mon Aug 19, 2019 10:05 am
Let this thread be exhibit A, or B, or whatever that a bad or even just mediocre realtor is little more than a tax on a real estate transaction.
Point goes to this post - I nearly spilled my coffee laughing. [we are selling and just discussed how we’re about to potentially be at odds with our agent if a low offer comes in… we’re willing to wait and he’ll likely go through the spiel of ‘this could be your ONLY offer’; neither here nor there for the OP though. ]

At this time, your agent wants the deal to close successfully / both agents actually :moneybag / as much as you do! I think it’s perfectly normal to feel a bit at odds with your agent of the whole process at some point. Buyer’s remorse can be real.

Also, I second what LilyFleur and NYCguy just said: communicate to the buyers (through your realtor) such things as how is the move going, when do they estimate you can get in etc. It may help to remember that this was their home, too, so the family isn’t likely to trash it in leaving... as opposed to a foreclosure or evicted renter who isn’t happy about the situation.

You’re going to have trepidation and “nerves” - this is a very exciting Big Deal :happy

You’ll be fine. Disaster rarely strikes, fortunately, and if something untoward does happen, kick it back to your agent and just ask with wide-eyed innocence, “so...what are they proposing to do about it?” :wink: You have a place to stay in should you need it, and soon you’ll be a proud new homeowner.

stungerz
Posts: 76
Joined: Sat Apr 28, 2012 12:43 pm

Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by stungerz » Tue Aug 20, 2019 10:02 am

I’m not sure if people have been in a competitive market but it is silly. Where I live, there was a house listed for $750k (2200sf, 3000 sf lot) on Wednesday and there were 8 offers by Tuesday and due to escalator clauses sold for $950k with inspection and financing and other items waved so rent backs would not be an issue.

In reality, everything will work out fine just get your insurance to cover you and being a landlord. My only concern would be the no end date for the $100/day rent back. Probably won’t be an issue since they already have a house under contract.

Congrats on buying a place. Sit back and enjoy yardwork and home maintenance 😉

Northern Flicker
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Joined: Fri Apr 10, 2015 12:29 am

Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Northern Flicker » Wed Aug 21, 2019 5:43 pm

The contract is signed and finalized since she is closing this week. I'm not sure why the seller would agree to signing anything more at this point. Without a deposit, how do you propose the buyer recover any damage done by the seller? Damage can happen when moving out. The way it is now, the buyer would have to sue.
Not suggesting signing new contracts, just reading what was signed already. The contract most likely requires the seller to turn the house over in the same condition as it was at closing. A deposit or rental agreement would give the sellers additional rights not in the buyer’s interest, which is a bad idea.

michaeljc70
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by michaeljc70 » Wed Aug 21, 2019 9:24 pm

Northern Flicker wrote:
Wed Aug 21, 2019 5:43 pm
The contract is signed and finalized since she is closing this week. I'm not sure why the seller would agree to signing anything more at this point. Without a deposit, how do you propose the buyer recover any damage done by the seller? Damage can happen when moving out. The way it is now, the buyer would have to sue.
Not suggesting signing new contracts, just reading what was signed already. The contract most likely requires the seller to turn the house over in the same condition as it was at closing. A deposit or rental agreement would give the sellers additional rights not in the buyer’s interest, which is a bad idea.
Okay. They can read what appears to be in a poorly formed contract (on behalf of the buyer).

Again, if it isn't in the same condition, what will the buyer do? They essentially are your tenant. You own the place and they are living in it. If they don't leave, you aren't going to get them out easy no matter what you call it. There is a clause that says they are charged $100/day beyond 30 days. Try getting them out easily.

As I said previously, things will probably be fine but the worst case scenarios don't seem to be accounted for in the contract. I hope the OP will be fine, but I'd be more careful next time (if there is a next time).

Northern Flicker
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Re: Close on first home on Wednesday, might not take possession until 30 days... advice please

Post by Northern Flicker » Thu Aug 22, 2019 1:28 pm

Again, if it isn't in the same condition, what will the buyer do?
The same thing the buyer would do if it is turned over the day of closing in different condition than it was in when the buyer’s inspection was completed. By the time you have the keys and take possession, the transaction will already have been closed.

Yes, occupancy after closing increases risk for the buyer. The buyer does not have to agree to it and the seller does not have to agree to sell without it. But if an agreement is executed and the sellers do not move out when they are supposed to, you want them to be trespassers, not tenants.

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