Posted by Phil=TX on December 06, 2006 at 14:37:45:
Jerry,
Closed on DW land/home earlier this year that was a short sale. Seller had other contiguous lots that we were purchasing that were not part of the short sale. Seller needed money to move and 2 weeks to pack and get out. We did a Seller’s Temporary Lease agreement on standard form provided by the real estate commmission for a 15 day period. Sales price was $15,000. Seller was given $5,000 at closing…enough to move…and if it became a hold over, the rent became $100 per day to be deducted from the balance owing on the sales price. The seller put it into high gear to get out and get the rest of their money…even though they went beyond the 15 day lease term by 3 days. Yes, we deducted $300 from the remaining balance, but it worked and everyone got what was bargained for.
? for Tony, Seller needs two weeks to vacate - Posted by Jerry-WA
Posted by Jerry-WA on December 05, 2006 at 18:11:41:
We’re scheduled to close on our first l/h deal friday. The seller has not moved yet and her agent says she needs maybe a couple weeks (she would like to pay us x amount per day). What happens if she doesn’t move? Do we have to go through an eviction process? We are inclined to not close til she’s out. What do you think?
Best advice is to not let them stay. If you want to bluff tell them you have too many other deals to do and if she can’t be out the deal’s off. See how fast they backtrack. Distressed homeowners never want to leave and most of the time they’re playing games with you. If find that the more b.s. that you receive on the back end of a closing is directly related to the b.s. that you took on the front end. As a result I’m I take no crap up front, it’s my way or the highway, but I get my deals closed on time.
Posted by Tony Colella on December 05, 2006 at 21:12:20:
I am always reluctant to leave a seller in a property that I buy. With that said there are several things to consider. Is there a justifiable reason for them to delay moving? If its only a few weeks, why not delay the closing?
Is this a motivated seller who is really a deadbeat looking to scam you or is it that their next home won’t close in time (or similar reasoning)?
If you choose not to delay the closing then have the closing agent (attorney) address the issue at the closing. Perhaps funds will not disperse until the seller moves out but you get the deed now (that should motivate them).
Perhaps the seller’s agent receives no commission until they move (I would like to see the agents motivation to get them out!).
If you do close and they remain in the home then make certain that you have documentation that provides you with rent at the time of closing with notice that the seller is to be out by a certain date. The value of this option is controlled by how quickly your state allows you to evict a hold over tenant. In most states you can file the next day if they don’t move on the date given but please review your states landlord/tenant act and seek advice from your closing attorney. Again, I would encourage you to have money held just in case you have to evict.
I suspect the seller’s agent will provide a board of realtors approved lease at the closing which spells everything out since it is the seller who is making the request. If not then have the closing agent or your buyer’s agent do so.
Just be sure to protect yourself so that you win or break even if they fail to move out when agreed or if they do damage (set aside money for that too if you need).
Posted by Jerry-WA on December 06, 2006 at 09:47:09:
Thanks Tony.
Those are almost word for word the options my partner and I discussed last night. We know nothing of the seller but we do know that property taxes were two years delinquent and according to the selling agent “she has a couple applications in” for rentals. We mentioned to her agent when we signed the offer that we would consider renting to her if she passed the screening process but no one approached us until now. If she can pass the screening process and we can withhold first, last, and security deposit from closing proceeds, we will allow her to stay. Other than that, we’re not closing until she’s out. It’s a 45 day process to evict someone here in our state and we don’t want to go through that. I guess her agent has some work to do today!
Jerry
Posted by Tony Colella on December 06, 2006 at 10:25:56:
Just one comment, the 45 days to evict in your state may be overstated for your example.
When we hear “it takes 30 or 45 or 60 days to evict in this state,” this typically refers to eviction due to non-payment.
In your example this would be a “hold over tenant” which means you will likely not have to provide notices such as a 5 or 10 day notice to pay or quit. If the tenant holds over after the lease expires you should be able to begin the court process to evict the very next day.
I suspect that some of the 45 days your are thinking of are due to notice time. You will still have delays due to court scheduling but again if you have first, last and deposit set aside and even if you have to go 30 to 45 days you are not at much risk unless great damage is done to the property.
But to restate, I would prefer not to allow the seller to stay. I simply wanted to point out what might be the true reality as it relates to the 45 days.
Posted by Jerry-WA on December 06, 2006 at 12:24:42:
You are correct, I was speaking from a non-payment perspective when I referenced 45 days. We have simply told the seller’s agent and the title company that either she passes our rental screening process and signs a rental agreement or we hold up closing until she’s completely out. I’ll let you know what happens.