There are a lot of challenges that can arise as real estate transactions unfold. Buyers have to find properties that fit their needs and that are within their budgets. They may have to compete with other buyers to get the seller to accept their offer. Then, they have to handle the logistics of scheduling a closing, signing all of the necessary documents and transitioning into the new home.
Issues can arise at every stage in that process that can derail or delay the real estate transaction. One of the most frustrating and potentially costly issues may involve the seller failing to leave before the closing or by the possession date.
What happens when buyers show up to get their keys or start moving in, only to discover that the seller has not yet left?
The offer may include protections for this situation
There are a number of unusual terms that buyers often have to integrate into their offers. For example, they may need to include a post-closing occupancy agreement. Particularly in scenarios where sellers cannot commit to leaving by a certain date, buyers may need to set a move-in date and may also need to establish terms in case the seller stays past that date.
Usually, those terms include a requirement to pay on a daily basis for continued residence. It is often beneficial to set the daily rate at slightly higher than the cost for a long-term hotel to provide incentive for the seller to vacate the property and find alternate housing.
Unfortunately, the possibility of future expenses may not be enough to get a seller out quickly. What happens when they don’t leave despite the buyer needing to take possession?
Litigation may be necessary
If the seller does not leave of their own volition, then the buyers may need to prepare to evict them. Doing so can be a lengthy process that involves the court system. They may also need to ask for damages because of the cost they incurred.
Paying for movers twice, covering storage expenses and accumulating costs related to short-term housing can add up quickly. A seller refusing to leave can cause financial hardship for those who recently invested large amounts of money to purchase a new home.
The courts can potentially award people damages in scenarios where the misconduct of a seller affects their finances. They can also enforce the terms established in a post-closing occupancy agreement by requiring the seller to pay the contractual daily rate for the time they remained in the property.
Adding the right terms to a purchase offer can go a long way toward protecting buyers during a residential real estate transaction. Those who worry that a seller may not leave on time may need help addressing the situation quickly and effectively to minimize the expense and disruption the seller’s prolonged tenancy can generate.
