When Sellers Remain in Possession

Frequently it happens that sellers don't want to give up possession of their home until after escrow has closed. I am not referring here to situations where they will rent back for six months or a year. Rather, it is the situation where the seller doesn't want to move out until two or three days after closing.

There can be good reasons for this. More than a few transactions have fallen apart at the last minute, though this is not common. What is more ordinary – and happens too frequently – is that the closing may be delayed a few days, maybe even a week. Often this is not the buyer's fault, but that of some third party (such as an underwriter). The point is: knowing that closings might be delayed, many sellers don't want to schedule movers and packing etc. until they know for sure that the closing has happened. Moreover, it may simply be a question of money. They need to have the sale proceeds in hand in order to pay the movers.
 
I know, I know. There are those who will argue that closings ought never to take place until and unless the sellers are out. While there may be compelling arguments for this point of view, the fact remains that it doesn't always happen, and that it would probably be a mistake to let this issue be a deal-killer if everything else was satisfactory.
 
So, the seller is going to remain in possession for, say, three days after closing. How best to handle this? You want more protection for the buyer than simply to say "OK". On the other hand, the situation doesn't seem to warrant a lengthy special contract.
 
The California Association of Realtors® (CAR) sets forth an alternative in its standard form Purchase Addendum Agreement (PAA). While the PAA deals with other topics as well, one of the options it lays out is "Seller to Remain in Possession After Close of Escrow." This option contains ten pre-printed sub sections plus a couple of blank lines for "other terms". It takes up about 2/3 of a page and might be described as a "rental agreement lite."

Click here for more of this article...

If you are looking for a Realtor you can count with the sale or purchase of a home, feel free to contact me by phone or email. I service Silicon Valley and Santa Clara County in Northern California.

Nora Sandoval
Sereno Group Properties
408-528-5631
Nora@serenogroup.com
Follow me on Twitter

Article source: Realty Times, Real Estate News and Advice