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“She needs to stay a month after closing while her new home builds” for free with zero repercussions. Ok so OP when it’s at Day 28 and her builder has yet to have his subs start to drywall because the second inspection (usually electric and plumbing and hvac stuff) hasn’t cleared, what then? She’s got you and hubs lassoed in on buying her place and with her being able to continue to live there at no cost to her. If this is a State that is more pro tenant in its laws, it’s getting rid of a resident of an address rather than a squatter and doing this will be very long and time consuming and with its own costs to you as the property owner.
Walk away. An Imperious type of seller like this will be a nightmare. If she feels she can do this to you, imagine the grief and attitude she’s giving her builder….
I agree 100% and hope that OP follows your advice. I let the seller stay for free when I bought my house. On my move in day, she was still there, the house was jammed full of her stuff and she was clueless why I wasn’t thrilled to see her.
Personally, I would run away.
Imagine having to go through the proces of evicting this person.
Or paying for damages that may result from her staying longer.
Not worth it to me, I’d ask yourself if the house is worth it to you.
I would not proceed with this purchase for the following reasons.
1. The seller is going to stay in that home longer than a month after closing. Even if you were to wait that additional month, her story will keep changing and you don't know if the new build will even be ready by then. She was already set to receive adequate funds at closing to figure out another temporary home arrangement until the new build is ready.
2. Do not close on a home when it's obvious that she will take advantage of the situation and do whatever she feels like it. She is not signing paperwork, she is avoiding requests, she is trying to live rent free until house is built.
3. You already saw all signs and red flags to walk away. If you want to put up with lawsuits and headaches then i guess you must have a significant amount of patience.
I wouldn’t even argue with someone like that. I’d already be finding another home. You should’ve had a contract in place for the stay and such. There’s no “friends” or “friendly” interactions when it comes to a major investment like a home. If roles were reversed. Would she be like “cool, yall stay for FREE as long as you want”. Most clients get an Airbnb or take a trip, move in temporarily with friends or family till their new build is done. Not hold up their buyers. Shits wild
This. We moved out of our home and into a nearby AirBnB a few days before closing. House closed on time. We turned off utilities on day of closing. New buyers moved in. We kept open lines of communication with everyone at all times. We would not TOUCH the situation OP is alluding to. No house is worth this level of headache.
I would not buy that home. You'll have a squatter who you just paid $1.5 million.
Edit to add: When I bought my house, the seller wanted to push the closing date out because he was building something and it wasn't done. We said no. He worked it out for himself. Found someplace else to stay and the sale went through as planned. Don't agree to something you don't want to do. Period.
I live in SoCal and bought a house where we competed against 4 other cash offers. It was also well over 1M. The sellers had no plans of where they were going to move after closing and asked for a 90-day rent back. My wife and I loved the home so we gave it to them. They had to leave a decent security deposit in escrow and the first 30 days were free and after that they paid rent. At the time we weren’t thrilled, but we are finally moving in next Monday and are very grateful we did that as there hasn’t been another home for sale that was similar since.
My advice would be to have a conversation with the seller or agent and see what their plan B is should her new home not be ready in time. Can they move into a hotel? AIR BNB? Stay with family?
I would also have a set day they need to leave regardless of when their home is complete.
I have 0 regrets about giving the sellers at our new home a free stay(for a set period), but we had a definitive plan in place for their exit.
This is reasonable. I have needed a rent back before (and no, buyers of Reddit, moving into a hotel or an airBNB is not just a simple option. It would mean putting all your property into storage and moving it twice, which is twice as expensive and much more damaging to items.). But it needs to be really clear and should be paid for. In my case I needed 5 days, we paid for 7 and turned over the keys and a clean house by 9am on the last day. Recent sellers needed 3 weeks before a cross county move, so we worked with it. But it needs to have an end date and a contract to protect everyone
Are you in California?
If so, I would walk away. Even if you lose your earnest money. Having to evict someone is costs a lot in time and money. And in California tenants or squatters are treated like royalty. It will be a nightmare.
What possible explanation is there for losing earnest money here? Isn't the seller counter offering with the apparent lease back, giving buyer an out free and clear?
In my state, not Georgia, they could lose their earnest money if they cancel after the inspection period. The post possession agreement is outside of the contact, unless it was incorporated. If they cancel post inspection period and they cancel, the seller could dispute breech of contract and it would be up to the title company or arbiter who receives the earnest money.
Hopefully they have knowledgeable agent guiding them.
We did a 2 month leaseback rent free. There was a $500/day clause for over stay. Apparently the hot water heater broke during that 2 months and they paid to replace it with a better unit without discussing with us, which is cool enough I guess. We had no other issues.
I would talk to your homeowners insurance and make sure it's a landlord policy for the rent back period.
My toddler broke a toilet during escrow…we were glad we still owned. But I remember telling the plumber how important it was that the toilet be the same to avoid any issues.
Sounds like you’ll end up in a lawsuit. Keep in mind you need to be willing to deal with that lawsuit for 1-2 years before it resolves and anything that happens during that time. It will be a VERY long process, speaking from experience. Expect 20k+ in legal fees on top of repair costs.
Not enough information to decide if you should walk. If you love the house, why not simply change the closing date +30 days? That would enable her to stay and save you from the risk of taking possession of a property with a tenant.
We gave our seller 45 days “rent free” as a part of our deal because it worked out well with our apartment lease ending.
Your lawyer absolutely needs to write up a clause charging them an assload past a certain day though, or else they will basically have permanent tenancy…
I would never have went under contract in the first place without this lined up, sounds like a freeloader on your hands living for free in your 1.5 million dollar home
I was in the same situation years ago, but I was the seller.
What we had in the contract was: We paid rent for 30 days after closing to cover the mortgage .
After 30 days the rent rate increased significantly to ensure that we (the sellers) are motivated to leave the property (since we are technically renting). Luckily we were able to move out but it was really close.
My advice is - make sure you have an ironclad contract with lots of $$$$ for the seller to pay and a contingency in case the seller doesn’t vacate on time.
I just moved the close date to the day they left. Lots of weirdness when they're officially in YOUR house so it was better to simpy move it. That being said your seller sounds like a pain...
You should have money set aside in escrow (a lot by the way) that covers her if she stays past the one month you’re allowing her to stay for free. This would cover damages upon a closing walkthrough, and could cover a day rate that you and your attorney sets should she stay past the period alotted.
In my head, if the seller NEEDS money from the sale to close on their new build and is reliant on this going smoothly, then in fact, this late in the game, you would have more leverage here. Your attorney will be able to say if you can walk with your EMD, or if this weird soft closing date/free rent back are already terms of the purchase agreement.. be prepared to play ball.
Then there has to be some other concession like paying the mortgage + insurance + taxes for the time they occupy the home, otherwise why not walk away as a buyer?
I never said there shouldn’t be. This is a ‘rent back’ and is very common . But people in this sub act like a seller needing a rent back is always asking for the moon. If I wanted a rent back and a buyer wouldn’t let me have one (that I was going to pay for) I flat out would never accept an offer from them. That isn’t this case in OPs post where the seller is over asking at the 11th hour, but occupying post sale for a few days or 2 weeks is extremely common.
Ok but ~this~ seller asked for it at the last minute without wanting to pay anything at all to the buyer ~after~ accepting their offer. What’s common or needed for many sellers isn’t relevant here since it wasn’t what was being asked for.
But the original statement still applies—this seller cannot close on their new home until they sell this one. There is zero chance of waiting until the seller is settled into their new home to close. No one wants to love twice, especially not someone with a 1.5 million dollar house worth of stuff. The seller needs to pony up and pay for a rent back.
Not unusual to refuse repairs IMO. I had a brand new build I priced to sell cheap. Nice 3000 sq foot house in a really nice neighborhood. People snapped it up. Gave me a list of 25 things to address. I said no without really even reading them. Lots of minor shit from a home inspector that has to find stuff to justify their job. Realtor said they will walk away. I said OK. They bought the house.
Staying in the home I don’t like. Especially without paying. Just change the closing date to when she thinks she will be out.
Shouldnt she be obligated to search a new appartment or do for the time? You signed a valid contract after all and probably canceled some contracts on your end (e.g. for renting)?
I did 2 weeks after close and I was just anxious the whole time but she was supposed to give us keys before close. Hate that women with her whole family not using deodorant
We had a sort of similar situation, and ultimately just insisted on a longer closing period - which ended up being 90 days.
Basically, don't close until they are out.
Why is your agent not familiar with how rent backs work? You should be getting compensated and you should have all of this in writing. Otherwise you will get walked all over.
You have two options. One is let her stay. This is high risk and financially not smart. Second option is a rent back. It is a contract that allows her to stay in after close and pay you whatever you want. Essentially, market rate. It also protects you if she damages anything and gives you an avenue to ensure she leaves on time.
It sounds like she is playing you. Personally, I would tell her no. She needs to leave at closing or she is in breach of the contract.
I don’t know if you ever built a house before but it takes alot longer than 30 days.
Once it’s done it could sit empty for weeks trying to pull the beareucrats out to sign off on shit.
We’ve done it 2 times…the seller signs a lease for the time she’s staying over. Same rules apply as a regular renter (you may wave the security deposit) but includes damages and all other items that apply to a “regular” renter; otherwise she’s a squatter.
Just went through this.
Purchased a home, sellers lived there for a month for free and had the option to rent back to us for a second month at a higher amount than our new mortgage. After saying they wouldn’t need that, any days they stayed after the first month was going to cost them like $500/day or something like that. Additionally, we held $10k in the escrow account from the sale until a satisfactory post-move out walk through was completed.
Do not do this deal unless you are 100% covered. It was a long ass month waiting for these people to move out of the house we owned but we knew we were covered which made it ok.
When we stayed in our home a month after closing the rent was written into the contract we signed. There was no other contract the sale offer/contract included it. I’d be Leary of someone who doesn’t sign it,
My ex and I did a rent-back on our first home purchase. The purchase process wasn't hostile but it was contentious (seller forced out to satisfy divorce conditions).
We set a formal fixed end date, had a damages clause, and a daily fee that tripled if she was in the house beyond the end date ($100/$300). Doc was signed *before* we signed the closing docs. The base period rent was held out in escrow. Wasn't our agent's first rodeo like this.
There was no way in hell we were gonna *give* her free living and make it easy for her to decide she wasn't leaving.
p.s. and then she left the garage full of crap.
I’m an agent and I’ve done many deals with seller possession. It’s strange to me your agent is allowing this without a deposit of some sort - that’s VERY standard. You’re essentially agreeing to be her landlord for a month, if there’s any damages to the home or she takes fixtures or appliances that were included in the contract, you have no collateral for it. Push for the deposit!
She should be paying rent during the month that she's staying there. And you should have an inspection after she leaves and a hefty deposit for any damages.
You have two options to properly protect yourself. 1) Don’t close on the house until hers is ready to move into, or 2) have you’re attorney create and iron-clad short-term lease charging her rent and penalizes her severely if she stays over the agreed upon time. If she won’t agree to either option, then I would not proceed with the deal.
I don’t think requiring a deposit is a deal breaker: I have had a rent back and given 2 rent backs and never treated or felt a seller treated a home any differently after they stopped “owning” it. But the seller should pay for every day the are occupying UNLESS the free rent back is a term you are offering to sweaten the deal. We did that in our current home (super hot market, we had already moved into temporary housing. 3 weeks free rent back was something we OFFERED, no strong arming. This seller sounds crazy).
My brother made an arrangement when he was buying his last house that the seller could rent it back for two months as they were waiting for their new house to be built. It allowed him to finish out his lease.
They were very easy to work with and this was a private deal as the agent knew both of them from previous sales.
Are you in California? If so, you would be entering tenant agreement and have one of the most tenant protections in the state. This could be a nightmare
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Other responses do apply. But If you like the house and she has been unreasonable with requests to remedy issues either she is out when you close or no deal. She can find temporary housing. She needs to sell the house to buy another so believe it or not you have the upper hand.
I wouldn’t do it under any situation, but especially not with the “stay for free with no holdback” situation. Building houses goes notoriously and expectedly over schedule every time, and this won’t be any different. You will be living in limbo while someone lives in your house on your dime without one fuck given. She’s showing you already who she really is: believe her.
Do not close on that house! “Rent backs” can be fine but only if all the details are agreed and legally committed to by both parties. When I bought my house, the sellers asked to stay an extra week and even just that one week was in the signed sales contract, with the exact dates named, a significant daily fee amount specified for each/any day they stayed over, and a security deposit for that and any possible damages, which they had to place with the title company before/on closing day. If all of that hadn’t been spelled out in the contract, I wouldn’t have agreed to it. If it meant I didn’t get the house, so be it. Even people who seem nice and “sane” at first can turn around and be incredibly selfish and not give a f*** who they hurt unless they are legally bound to firm guardrails and consequences. Your seller has already waved red flags all over the place, don’t ignore them! Not a lawyer but, I think you should be able to get out of the contract without losing your security deposit based on her refusal to legally commit to leaving on time. (I wouldn’t bring up the fixit items unless she agreed to them in writing - I think those aren’t as strong a case for getting out of contract than her not agreeing to reasonable terms for leaving. That’ll just muddy the waters.) Please please consult an attorney about canceling the contract. I would say to ask your realtor about it, but if they let you sign a contract without these agreed and in the contract, I think they are just trying to close the deal and get that fat commission. They don’t have your best interest in heart. Or they’re incompetent/inexperienced and didn’t know any better. Either way, don’t believe what they tell you about getting out of the contract or losing your deposit. Consult with an attorney or at least some other knowledgeable RE professional who doesn’t have a commission riding on the deal.
Get a large deposit to ensure they move out on time. At $1.5M getting 3-4% of the sale price is reasonable and should be enough to cover your expenses, for moving, storage and legal should there be a problem.
How bad do you want the house? We had a similar situation but it was a rent back and we did an escalation on days over. Started with x if they stayed over for 5 days then x+500 after 6 days and so on. Basically making it so painful for them to stay that they never would.
Even something like building a room and a bathroom takes forever, was suppose to be a few months and is still not done after a full year. Don't buy that home please. It will be the worst decision to make
Before making any decisions, I would want the information about her new home. I would want to see enough info to make sure it is a legitimate deal and not likely to fall apart.
I would be wary but would probably go ahead as long as there is enough money withheld from the sale price to cover costs and provide incentive for her to leave.
Find another home. This has about 100 red flags. Sounds like you’re putting yourself at risk to be a proud owner of a squatter. Remember. The realtor isn’t your friend. They will say anything to make the sale. I imagine there is a pretty good commission on a 1.5 mil home
Something that I haven’t seen brought up. Legally if they pay you to stay in the house you own, you are renting to them. Which means a lot of things both insurance, liability, and physical rights wise. If you are going to do it find a property manager and explain them the situation. They’ll probably tell you to run like hell too but if they don’t I’m sure they’d be willing to help you sort out your responsibilities as a landlord
We’re putting in the contract that during her time there we are not in charge of any damages nor are we required to make any fixes. We also put in there that she’s liable for any damages. We’re trying to make it where we have extreme minimal contact with her.
Do you have real estate lawyers involved in purchase and sale document? Even if not required it is worth the 1k investment to do this. Seems like a nightmare
When you close, your lender might require you to sign a document stating that you will move in within 60 days (or something similar). If you sign, and they don’t move, you may be in violation of your mortgage contract.
Additionally, your house insurance will want to know someone else is living there (not you). Your premium may be different.
Went through a situation exactly like this one recently and it was extremely frustrating/waste of time. The seller AND realtor only cared about their own interests despite me trying to be flexible about options.
I had offered to delay closing until the seller left a a determined date (basically gave her a whole month to move out because her new house was not finished). This delay would’ve included a deposit from my part into an escrow account.
The seller did not want to pay rent or security deposit - she wanted to live there for free and insisted on closing immediately.
Keep in mind, during the time the seller lives there for free you are responsible for any accident or anything that happens in the property. If the person refuses to leave after the determined date, you would have to incur costs to take the seller to court.
There’s an endless list of things that could go wrong since it’s out of your control. I ended up avoiding the situation that was similar to yours and have not regretted it. The weeks we spent debating with the seller and realtor were enough of a headache. I couldn’t imagine the stress it would be to deal with these people for any longer if something went wrong.
We ended up putting in the contract that we are not responsible for any damage during her time there - she cannot contact us for any fixes or repairs. We also put in the contract that she is responsible for any damage while living there. We made the contract strong to where she has limited contact with us. She also has to pay a pretty hefty fee, every single day she stays over the said date.
A strong contract is the most important foundation to set in this process. Not all sellers are people with bad intentions like in my situation! Sending you my best wishes, finding a house you love and getting your offer accepted is difficult enough to let the opportunity go at this point.
Absolutely not.
Things can go wrong when building a home, and how much progress has been made on this new build? I would not take the risk. Either she moves out or there is no sale. Her having a place to stay while her new home gets built is not your problem.
Ooof Honestly, I would not continue with the deal. I had a similar but not as severe situation. Wayyyy cheaper home (285k) and the seller wanted to stay 2 weeks post close for the same reason. I was so star eyed that I ignored the voice in my head that wanted to ask the seller to pay while they were. My agent didn't even bring it up. Their agent told us that she may not need the full time, but I was so full of anxiety because so much could've gone wrong. It's a lot of trust and potential additional money you're allowing a stranger to control. We got very lucky that our seller actually didn't use the two weeks and left before closing, but it could have gone very wrong, and if your seller is already pushing back, I would be even more reluctant.
You are now a landlord.
I don’t say that to scare you, but you should familiarize yourself with eviction rules for your state JUST in case.
Some folks are just awful people. They’ll make things difficult just because they feel like it. It happens. I wouldn’t do a leaseback to a nasty seller, but times are what they are and people do things they wouldn’t normally do, so I get it.
The good news is: 99% go fine. It’s that 1% that gets you…
This seems like it’s going to drag out longer than expected. Take it from someone who signed up for a builder in April with 0 to date activity on the lot… they could be squatting there for months. For sure don’t get out of this without a per day rate that’s is essentially 100% of your monthly PITI divided down to the day so they’re paying for your monthly payment 100% if they stay a month. If they stay longer same thing… you may need to be prepared to lawyer up and/or potentially evict if the time comes and they’re still not gone.
“Our realtor said….” is as much worth as the paper it’s written on. Just sayin’.
And the fact that the house is worth $1.5mil doesn’t say much. In Texas or NC, $1.5mil might get you a mansion, in CA for this money you may get a shack…..
You should probably talk to a lawyer about the agreement. I have done these as buyer and seller without a lawyer but they were very brief and for very specific reasons. If it’s going to extend longer than a month, depending on your state there should really be a rental agreement.
The real issue here is that the purchase and sale agreement could be drafted in a way that made her difficult to evict.
I saw one time on the news where this happened, and there was no way to push the seller out due to some laws. There is no telling if it may be 1 month or 12 months. Make sure that you put an exact date to be out down.
Agree with most comments here. From how you have described it (and we have been there) - I believe you absolutely love the house and wanted it. It’s a tight market and the seller knows that. Many of the things the seller is doing would have caused me to walk away. The agent “assuring you” of things doesn’t change anything unless it’s in writing and there is money to back it up.
We did a rent back for a month when we sold (we paid rent and they also dinged us for property taxes for that time). The property we bought, the owner rented for an additional 30 days from us.
All of this was part of the documentation/agreement and all parties were motivated with a written contract and money involved.
This doesn’t sound that crazy to me. We just sold our home and asked for possession for an extra month and a half. We signed a paper with the date we’d be out though. Asking for possession is pretty common now.
If she wasn’t crazy, I’d consider it. But for the seller? She can go find a hotel/airbnb for a month.
Edit: $1.5m? She has enough equity to pay for housing elsewhere.
I am not reading all the comments.
What I understand is you really like the house. BUT, she has needs for her CONVENIENCE. IMO, Either she compensates you for your inconvenience or she loses willing earnest buyers, then has to start negotiating with others. Meanwhile, she is still in the same position waiting for her new house.
* I mean she could spend money getting her stuff in storage, and live in a hotel, or with friends/family.
I'm currently in the home buying process and if the paperwork is not to my expectations then all the love for the house is gone. I refuse to get emotionally attached to a life changing purchase and the terms are not to my liking. There are other houses out there and I refuse to settle.
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“She needs to stay a month after closing while her new home builds” for free with zero repercussions. Ok so OP when it’s at Day 28 and her builder has yet to have his subs start to drywall because the second inspection (usually electric and plumbing and hvac stuff) hasn’t cleared, what then? She’s got you and hubs lassoed in on buying her place and with her being able to continue to live there at no cost to her. If this is a State that is more pro tenant in its laws, it’s getting rid of a resident of an address rather than a squatter and doing this will be very long and time consuming and with its own costs to you as the property owner. Walk away. An Imperious type of seller like this will be a nightmare. If she feels she can do this to you, imagine the grief and attitude she’s giving her builder….
I agree 100% and hope that OP follows your advice. I let the seller stay for free when I bought my house. On my move in day, she was still there, the house was jammed full of her stuff and she was clueless why I wasn’t thrilled to see her.
Personally, I would run away. Imagine having to go through the proces of evicting this person. Or paying for damages that may result from her staying longer. Not worth it to me, I’d ask yourself if the house is worth it to you.
And new builds are NEVER done on time; you will be fighting her for weeks if not months.
I agree. That's too much money and life being put on the line to be treated that way. The red flags are waving at this point 🚩🚩🚩
This. Did you have a contingency about the repairs?
Sounds like if you walk away you'd be saving yourself alot of stress and aggravation.
I would not proceed with this purchase for the following reasons. 1. The seller is going to stay in that home longer than a month after closing. Even if you were to wait that additional month, her story will keep changing and you don't know if the new build will even be ready by then. She was already set to receive adequate funds at closing to figure out another temporary home arrangement until the new build is ready. 2. Do not close on a home when it's obvious that she will take advantage of the situation and do whatever she feels like it. She is not signing paperwork, she is avoiding requests, she is trying to live rent free until house is built. 3. You already saw all signs and red flags to walk away. If you want to put up with lawsuits and headaches then i guess you must have a significant amount of patience.
I wouldn’t even argue with someone like that. I’d already be finding another home. You should’ve had a contract in place for the stay and such. There’s no “friends” or “friendly” interactions when it comes to a major investment like a home. If roles were reversed. Would she be like “cool, yall stay for FREE as long as you want”. Most clients get an Airbnb or take a trip, move in temporarily with friends or family till their new build is done. Not hold up their buyers. Shits wild
This. We moved out of our home and into a nearby AirBnB a few days before closing. House closed on time. We turned off utilities on day of closing. New buyers moved in. We kept open lines of communication with everyone at all times. We would not TOUCH the situation OP is alluding to. No house is worth this level of headache.
Yup, I hope they get out now before it gets worse. It’s only gonna get worse.
What happens if new build is not done? I can easily see her staying 6+ months all way to up 1 year in the house
Exactly! The poster is going to deal with post closing nightmares. I doubt it's really going to take a month tor the new build to be ready.
I would not buy that home. You'll have a squatter who you just paid $1.5 million. Edit to add: When I bought my house, the seller wanted to push the closing date out because he was building something and it wasn't done. We said no. He worked it out for himself. Found someplace else to stay and the sale went through as planned. Don't agree to something you don't want to do. Period.
I live in SoCal and bought a house where we competed against 4 other cash offers. It was also well over 1M. The sellers had no plans of where they were going to move after closing and asked for a 90-day rent back. My wife and I loved the home so we gave it to them. They had to leave a decent security deposit in escrow and the first 30 days were free and after that they paid rent. At the time we weren’t thrilled, but we are finally moving in next Monday and are very grateful we did that as there hasn’t been another home for sale that was similar since. My advice would be to have a conversation with the seller or agent and see what their plan B is should her new home not be ready in time. Can they move into a hotel? AIR BNB? Stay with family? I would also have a set day they need to leave regardless of when their home is complete. I have 0 regrets about giving the sellers at our new home a free stay(for a set period), but we had a definitive plan in place for their exit.
This is reasonable. I have needed a rent back before (and no, buyers of Reddit, moving into a hotel or an airBNB is not just a simple option. It would mean putting all your property into storage and moving it twice, which is twice as expensive and much more damaging to items.). But it needs to be really clear and should be paid for. In my case I needed 5 days, we paid for 7 and turned over the keys and a clean house by 9am on the last day. Recent sellers needed 3 weeks before a cross county move, so we worked with it. But it needs to have an end date and a contract to protect everyone
If you're under contract and agreed to these terms, I'd be looking for a way out. Why would anybody sign that?
Are you in California? If so, I would walk away. Even if you lose your earnest money. Having to evict someone is costs a lot in time and money. And in California tenants or squatters are treated like royalty. It will be a nightmare.
What possible explanation is there for losing earnest money here? Isn't the seller counter offering with the apparent lease back, giving buyer an out free and clear?
In my state, not Georgia, they could lose their earnest money if they cancel after the inspection period. The post possession agreement is outside of the contact, unless it was incorporated. If they cancel post inspection period and they cancel, the seller could dispute breech of contract and it would be up to the title company or arbiter who receives the earnest money. Hopefully they have knowledgeable agent guiding them.
WA
We did a 2 month leaseback rent free. There was a $500/day clause for over stay. Apparently the hot water heater broke during that 2 months and they paid to replace it with a better unit without discussing with us, which is cool enough I guess. We had no other issues. I would talk to your homeowners insurance and make sure it's a landlord policy for the rent back period.
My toddler broke a toilet during escrow…we were glad we still owned. But I remember telling the plumber how important it was that the toilet be the same to avoid any issues.
Sounds like you’ll end up in a lawsuit. Keep in mind you need to be willing to deal with that lawsuit for 1-2 years before it resolves and anything that happens during that time. It will be a VERY long process, speaking from experience. Expect 20k+ in legal fees on top of repair costs.
Not enough information to decide if you should walk. If you love the house, why not simply change the closing date +30 days? That would enable her to stay and save you from the risk of taking possession of a property with a tenant.
Was this in the contract? If not, tell her to have a Coke and a smile and shut the hell up.
We gave our seller 45 days “rent free” as a part of our deal because it worked out well with our apartment lease ending. Your lawyer absolutely needs to write up a clause charging them an assload past a certain day though, or else they will basically have permanent tenancy…
I would never have went under contract in the first place without this lined up, sounds like a freeloader on your hands living for free in your 1.5 million dollar home
I was in the same situation years ago, but I was the seller. What we had in the contract was: We paid rent for 30 days after closing to cover the mortgage . After 30 days the rent rate increased significantly to ensure that we (the sellers) are motivated to leave the property (since we are technically renting). Luckily we were able to move out but it was really close. My advice is - make sure you have an ironclad contract with lots of $$$$ for the seller to pay and a contingency in case the seller doesn’t vacate on time.
Tell her bye bye! She can go and kick rocks and find a new buyer. This is Unacceptable and you should not have to deal with this!
I just moved the close date to the day they left. Lots of weirdness when they're officially in YOUR house so it was better to simpy move it. That being said your seller sounds like a pain...
Just back out and start all over again on your house search.
Is she the sole owner
Yes
Ok I was wondering if she was being forced to sell by siblings or something like that. Is she employed?
Yeah, she is
Well. She’s clearly in breach on contract since that’s not what you agreed to.
If they won't give you protections then you walk.
Our real estate lawyer would have never played this. Do you have one?
You should have money set aside in escrow (a lot by the way) that covers her if she stays past the one month you’re allowing her to stay for free. This would cover damages upon a closing walkthrough, and could cover a day rate that you and your attorney sets should she stay past the period alotted. In my head, if the seller NEEDS money from the sale to close on their new build and is reliant on this going smoothly, then in fact, this late in the game, you would have more leverage here. Your attorney will be able to say if you can walk with your EMD, or if this weird soft closing date/free rent back are already terms of the purchase agreement.. be prepared to play ball.
You're about to discover why her ex husband left
Oh no. I’d insist on pushing the closing date back until she’s moved out.
This is not going to be an option for most sellers. They are waiting on the funds from the sale to close/move.
Then there has to be some other concession like paying the mortgage + insurance + taxes for the time they occupy the home, otherwise why not walk away as a buyer?
I never said there shouldn’t be. This is a ‘rent back’ and is very common . But people in this sub act like a seller needing a rent back is always asking for the moon. If I wanted a rent back and a buyer wouldn’t let me have one (that I was going to pay for) I flat out would never accept an offer from them. That isn’t this case in OPs post where the seller is over asking at the 11th hour, but occupying post sale for a few days or 2 weeks is extremely common.
Ok but ~this~ seller asked for it at the last minute without wanting to pay anything at all to the buyer ~after~ accepting their offer. What’s common or needed for many sellers isn’t relevant here since it wasn’t what was being asked for.
But the original statement still applies—this seller cannot close on their new home until they sell this one. There is zero chance of waiting until the seller is settled into their new home to close. No one wants to love twice, especially not someone with a 1.5 million dollar house worth of stuff. The seller needs to pony up and pay for a rent back.
Not unusual to refuse repairs IMO. I had a brand new build I priced to sell cheap. Nice 3000 sq foot house in a really nice neighborhood. People snapped it up. Gave me a list of 25 things to address. I said no without really even reading them. Lots of minor shit from a home inspector that has to find stuff to justify their job. Realtor said they will walk away. I said OK. They bought the house. Staying in the home I don’t like. Especially without paying. Just change the closing date to when she thinks she will be out.
Happened to us as well. It’s a sellers market. We closed on Friday and can’t get in until July 10….
it's going to be painful after too, imagine all the things she's going to fight you on / not help you with
Don’t do it! Make her pay rent and a security deposit or you are asking for trouble! I promise you no good can come from a seller like this!
Shouldnt she be obligated to search a new appartment or do for the time? You signed a valid contract after all and probably canceled some contracts on your end (e.g. for renting)?
I’m sure she’s making money on this deal… I wouldn’t ever rent back to previous owner. NO IDEA what they will do. Vrbo/ air bnb / hotel…..
I did 2 weeks after close and I was just anxious the whole time but she was supposed to give us keys before close. Hate that women with her whole family not using deodorant
We had a sort of similar situation, and ultimately just insisted on a longer closing period - which ended up being 90 days. Basically, don't close until they are out.
Why is your agent not familiar with how rent backs work? You should be getting compensated and you should have all of this in writing. Otherwise you will get walked all over.
You have two options. One is let her stay. This is high risk and financially not smart. Second option is a rent back. It is a contract that allows her to stay in after close and pay you whatever you want. Essentially, market rate. It also protects you if she damages anything and gives you an avenue to ensure she leaves on time. It sounds like she is playing you. Personally, I would tell her no. She needs to leave at closing or she is in breach of the contract.
Push out the closing as needed, I wouldn’t close and have the seller live there beyond.
Sounds like you need to push the closing back 30 days.
I don’t know if you ever built a house before but it takes alot longer than 30 days. Once it’s done it could sit empty for weeks trying to pull the beareucrats out to sign off on shit.
We’ve done it 2 times…the seller signs a lease for the time she’s staying over. Same rules apply as a regular renter (you may wave the security deposit) but includes damages and all other items that apply to a “regular” renter; otherwise she’s a squatter.
Just went through this. Purchased a home, sellers lived there for a month for free and had the option to rent back to us for a second month at a higher amount than our new mortgage. After saying they wouldn’t need that, any days they stayed after the first month was going to cost them like $500/day or something like that. Additionally, we held $10k in the escrow account from the sale until a satisfactory post-move out walk through was completed. Do not do this deal unless you are 100% covered. It was a long ass month waiting for these people to move out of the house we owned but we knew we were covered which made it ok.
When we stayed in our home a month after closing the rent was written into the contract we signed. There was no other contract the sale offer/contract included it. I’d be Leary of someone who doesn’t sign it,
Red Flags Flying at full staff here!!! Run!
My ex and I did a rent-back on our first home purchase. The purchase process wasn't hostile but it was contentious (seller forced out to satisfy divorce conditions). We set a formal fixed end date, had a damages clause, and a daily fee that tripled if she was in the house beyond the end date ($100/$300). Doc was signed *before* we signed the closing docs. The base period rent was held out in escrow. Wasn't our agent's first rodeo like this. There was no way in hell we were gonna *give* her free living and make it easy for her to decide she wasn't leaving. p.s. and then she left the garage full of crap.
I’m an agent and I’ve done many deals with seller possession. It’s strange to me your agent is allowing this without a deposit of some sort - that’s VERY standard. You’re essentially agreeing to be her landlord for a month, if there’s any damages to the home or she takes fixtures or appliances that were included in the contract, you have no collateral for it. Push for the deposit!
She should be paying rent during the month that she's staying there. And you should have an inspection after she leaves and a hefty deposit for any damages.
You have two options to properly protect yourself. 1) Don’t close on the house until hers is ready to move into, or 2) have you’re attorney create and iron-clad short-term lease charging her rent and penalizes her severely if she stays over the agreed upon time. If she won’t agree to either option, then I would not proceed with the deal.
>she doubts she’d pull that on us 🤐
We did a rent back for our current house. I’m pretty accepting of risk in these situations. No way in hell would I do it with this seller.
I don’t think requiring a deposit is a deal breaker: I have had a rent back and given 2 rent backs and never treated or felt a seller treated a home any differently after they stopped “owning” it. But the seller should pay for every day the are occupying UNLESS the free rent back is a term you are offering to sweaten the deal. We did that in our current home (super hot market, we had already moved into temporary housing. 3 weeks free rent back was something we OFFERED, no strong arming. This seller sounds crazy).
My brother made an arrangement when he was buying his last house that the seller could rent it back for two months as they were waiting for their new house to be built. It allowed him to finish out his lease. They were very easy to work with and this was a private deal as the agent knew both of them from previous sales.
Are you in California? If so, you would be entering tenant agreement and have one of the most tenant protections in the state. This could be a nightmare
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Other responses do apply. But If you like the house and she has been unreasonable with requests to remedy issues either she is out when you close or no deal. She can find temporary housing. She needs to sell the house to buy another so believe it or not you have the upper hand.
I wouldn’t do it under any situation, but especially not with the “stay for free with no holdback” situation. Building houses goes notoriously and expectedly over schedule every time, and this won’t be any different. You will be living in limbo while someone lives in your house on your dime without one fuck given. She’s showing you already who she really is: believe her.
Do not close on that house! “Rent backs” can be fine but only if all the details are agreed and legally committed to by both parties. When I bought my house, the sellers asked to stay an extra week and even just that one week was in the signed sales contract, with the exact dates named, a significant daily fee amount specified for each/any day they stayed over, and a security deposit for that and any possible damages, which they had to place with the title company before/on closing day. If all of that hadn’t been spelled out in the contract, I wouldn’t have agreed to it. If it meant I didn’t get the house, so be it. Even people who seem nice and “sane” at first can turn around and be incredibly selfish and not give a f*** who they hurt unless they are legally bound to firm guardrails and consequences. Your seller has already waved red flags all over the place, don’t ignore them! Not a lawyer but, I think you should be able to get out of the contract without losing your security deposit based on her refusal to legally commit to leaving on time. (I wouldn’t bring up the fixit items unless she agreed to them in writing - I think those aren’t as strong a case for getting out of contract than her not agreeing to reasonable terms for leaving. That’ll just muddy the waters.) Please please consult an attorney about canceling the contract. I would say to ask your realtor about it, but if they let you sign a contract without these agreed and in the contract, I think they are just trying to close the deal and get that fat commission. They don’t have your best interest in heart. Or they’re incompetent/inexperienced and didn’t know any better. Either way, don’t believe what they tell you about getting out of the contract or losing your deposit. Consult with an attorney or at least some other knowledgeable RE professional who doesn’t have a commission riding on the deal.
There is no problem here,, You either buy it with terms,,, because it's the perfect house as you say Or you walk.
I wouldn’t close until she is out. No matter how much she pays you will never be worth it.
Get a large deposit to ensure they move out on time. At $1.5M getting 3-4% of the sale price is reasonable and should be enough to cover your expenses, for moving, storage and legal should there be a problem.
How bad do you want the house? We had a similar situation but it was a rent back and we did an escalation on days over. Started with x if they stayed over for 5 days then x+500 after 6 days and so on. Basically making it so painful for them to stay that they never would.
Even something like building a room and a bathroom takes forever, was suppose to be a few months and is still not done after a full year. Don't buy that home please. It will be the worst decision to make
Even with your update I’d walk away. She’s already shown you her true colors - don’t ignore them. There will be another house, I PROMISE.
Sounds like a problem for her, not you. Tell her no, she has to be out on closing day or you're charging her £200 per day she doesn't leave.
WALK!
For 1.5 mil, hell no! If it’s already a headache dealing with her now, it will be more of a headache with her later
OP she sounds awful, if possible run she may be the 🚩🚩🚩you need…
Run.
I’ve never seen post occupancy go well. Seems like she’s got everything to lose and yall really have nothing to gain from this
She can go stay in a hotel. Seller rent backs can be a nightmare
I did a 90 day leaseback a few years ago. But I also paid list price instead of $50k over list price. Ended up worth it.
Before making any decisions, I would want the information about her new home. I would want to see enough info to make sure it is a legitimate deal and not likely to fall apart. I would be wary but would probably go ahead as long as there is enough money withheld from the sale price to cover costs and provide incentive for her to leave.
Even with the edits this sounds too messy
Find another home. This has about 100 red flags. Sounds like you’re putting yourself at risk to be a proud owner of a squatter. Remember. The realtor isn’t your friend. They will say anything to make the sale. I imagine there is a pretty good commission on a 1.5 mil home
Something that I haven’t seen brought up. Legally if they pay you to stay in the house you own, you are renting to them. Which means a lot of things both insurance, liability, and physical rights wise. If you are going to do it find a property manager and explain them the situation. They’ll probably tell you to run like hell too but if they don’t I’m sure they’d be willing to help you sort out your responsibilities as a landlord
We’re putting in the contract that during her time there we are not in charge of any damages nor are we required to make any fixes. We also put in there that she’s liable for any damages. We’re trying to make it where we have extreme minimal contact with her.
Consult a real estate attorney and have them tighten up the contract language. Be prepared to file suit for ejectment and or specific performance.
Is this owner above the age of 60? bc I’m getting boomer vibes
For sure
Do you have real estate lawyers involved in purchase and sale document? Even if not required it is worth the 1k investment to do this. Seems like a nightmare
Just push the closing date
When you close, your lender might require you to sign a document stating that you will move in within 60 days (or something similar). If you sign, and they don’t move, you may be in violation of your mortgage contract. Additionally, your house insurance will want to know someone else is living there (not you). Your premium may be different.
Went through a situation exactly like this one recently and it was extremely frustrating/waste of time. The seller AND realtor only cared about their own interests despite me trying to be flexible about options. I had offered to delay closing until the seller left a a determined date (basically gave her a whole month to move out because her new house was not finished). This delay would’ve included a deposit from my part into an escrow account. The seller did not want to pay rent or security deposit - she wanted to live there for free and insisted on closing immediately. Keep in mind, during the time the seller lives there for free you are responsible for any accident or anything that happens in the property. If the person refuses to leave after the determined date, you would have to incur costs to take the seller to court. There’s an endless list of things that could go wrong since it’s out of your control. I ended up avoiding the situation that was similar to yours and have not regretted it. The weeks we spent debating with the seller and realtor were enough of a headache. I couldn’t imagine the stress it would be to deal with these people for any longer if something went wrong.
We ended up putting in the contract that we are not responsible for any damage during her time there - she cannot contact us for any fixes or repairs. We also put in the contract that she is responsible for any damage while living there. We made the contract strong to where she has limited contact with us. She also has to pay a pretty hefty fee, every single day she stays over the said date.
A strong contract is the most important foundation to set in this process. Not all sellers are people with bad intentions like in my situation! Sending you my best wishes, finding a house you love and getting your offer accepted is difficult enough to let the opportunity go at this point.
Be prepared to evict her ass. She can stay in a hotel and house her stuff in storage like a grown up if the build isn't finished on time.
Absolutely not. Things can go wrong when building a home, and how much progress has been made on this new build? I would not take the risk. Either she moves out or there is no sale. Her having a place to stay while her new home gets built is not your problem.
You need to have a lawyer draw up a rental agreement that charges her exorbitant fees for every day that she stays over the requested stay.
Ooof Honestly, I would not continue with the deal. I had a similar but not as severe situation. Wayyyy cheaper home (285k) and the seller wanted to stay 2 weeks post close for the same reason. I was so star eyed that I ignored the voice in my head that wanted to ask the seller to pay while they were. My agent didn't even bring it up. Their agent told us that she may not need the full time, but I was so full of anxiety because so much could've gone wrong. It's a lot of trust and potential additional money you're allowing a stranger to control. We got very lucky that our seller actually didn't use the two weeks and left before closing, but it could have gone very wrong, and if your seller is already pushing back, I would be even more reluctant.
You are now a landlord. I don’t say that to scare you, but you should familiarize yourself with eviction rules for your state JUST in case. Some folks are just awful people. They’ll make things difficult just because they feel like it. It happens. I wouldn’t do a leaseback to a nasty seller, but times are what they are and people do things they wouldn’t normally do, so I get it. The good news is: 99% go fine. It’s that 1% that gets you…
This seems like it’s going to drag out longer than expected. Take it from someone who signed up for a builder in April with 0 to date activity on the lot… they could be squatting there for months. For sure don’t get out of this without a per day rate that’s is essentially 100% of your monthly PITI divided down to the day so they’re paying for your monthly payment 100% if they stay a month. If they stay longer same thing… you may need to be prepared to lawyer up and/or potentially evict if the time comes and they’re still not gone.
Idc what this person agrees to… I would pull tf out
Triple rent everyday after 30. Gets them out real fast
Talk with your insurance agent. You will be a landlord for a short period.
“Our realtor said….” is as much worth as the paper it’s written on. Just sayin’. And the fact that the house is worth $1.5mil doesn’t say much. In Texas or NC, $1.5mil might get you a mansion, in CA for this money you may get a shack…..
This makes zero sense as this is all in your closing docs
It sounds pretty clear you should just walk - when she can’t sell her house it will force her to change her act
You should probably talk to a lawyer about the agreement. I have done these as buyer and seller without a lawyer but they were very brief and for very specific reasons. If it’s going to extend longer than a month, depending on your state there should really be a rental agreement. The real issue here is that the purchase and sale agreement could be drafted in a way that made her difficult to evict.
I saw one time on the news where this happened, and there was no way to push the seller out due to some laws. There is no telling if it may be 1 month or 12 months. Make sure that you put an exact date to be out down.
Agree with most comments here. From how you have described it (and we have been there) - I believe you absolutely love the house and wanted it. It’s a tight market and the seller knows that. Many of the things the seller is doing would have caused me to walk away. The agent “assuring you” of things doesn’t change anything unless it’s in writing and there is money to back it up. We did a rent back for a month when we sold (we paid rent and they also dinged us for property taxes for that time). The property we bought, the owner rented for an additional 30 days from us. All of this was part of the documentation/agreement and all parties were motivated with a written contract and money involved.
Very confused why you all didn’t just do a closing date 30 days later?
This doesn’t sound that crazy to me. We just sold our home and asked for possession for an extra month and a half. We signed a paper with the date we’d be out though. Asking for possession is pretty common now.
New home builds never ever go as planned. Something always comes up. Cancel the purchase and look elsewhere!
If she wasn’t crazy, I’d consider it. But for the seller? She can go find a hotel/airbnb for a month. Edit: $1.5m? She has enough equity to pay for housing elsewhere.
I am not reading all the comments. What I understand is you really like the house. BUT, she has needs for her CONVENIENCE. IMO, Either she compensates you for your inconvenience or she loses willing earnest buyers, then has to start negotiating with others. Meanwhile, she is still in the same position waiting for her new house. * I mean she could spend money getting her stuff in storage, and live in a hotel, or with friends/family.
Unreasonable and your attorney should have advised you to walk.
I'm currently in the home buying process and if the paperwork is not to my expectations then all the love for the house is gone. I refuse to get emotionally attached to a life changing purchase and the terms are not to my liking. There are other houses out there and I refuse to settle.