Owner Wants to Occupy Month After Closing

[Tyler Haanen]

Hello Everyone,

I need some advice. I am closing on a duplex in a few weeks and have just learned that the owner would like to occupy their current unit until the end of September (a week and month after closing).

I am getting an owner-occupied loan and the other unit is vacant, so no issues on that end. I am just not sure how to approach this issue because it opens up to an awkward time. The owner is older and has owned the home for many years. 

My wife and I were planning to start some modest renovations to both units and get one ready to rent as soon as possible. 

Has anyone else experienced something like this? What did you do or would of done differently?

Should I charge her rent for the month on a month-to-month basis? Or would I be better off negotiating some seller concessions at closing?

I would not feel good about putting out an elderly woman even if it was my right to after becoming the owner. So that is not an option for me.

Any advice that can be offered for this situation is greatly appreciated! Thank you.

[Matt Devincenzo]

I did this with my OO duplex purchase years ago which is why I was able to buy since two other prior offers fell apart because they didn't want to allow the seller to stay. In my case she wanted 6 months, but the premise is the same.

First I charged rent in my case since it was a longer stay, in yours you can decide if an extra $1,500 is worth it or not...I'd probably not worry about it for a short stay and use it as 'good will' towards accepting my offer. With a short stay the practical advice I can give is to hold back a significant portion of the funds until she is out, and have a stated daily penalty following that date. I'd hold probably 5% of the sale price back and the penalty rate would be three times market rent, this motivates her to move out on time. And if she doesn't at least compensates you for the effort to go through an eviction (if it went that far).

Combined I think that offer has appeal to a seller. The 'no rent' stay is the nice part to achieve a sale, the penalty and hold back is the stick to motivate following through on the move.