Advice needed: sellers want to stay past closing

[Elizabeth Nenque]

My husband and I have been house hunting and are about to submit an offer on a house in Bothell.
The sellers would like to stay past closing and rent until they find a house. Our agent says this is common. BUT we received advice from another RE agent that we shouldn't allow this, because of the liability.
Our agent had suggested that the sellers need the proceeds to begin their house hunting (they want a bigger house), but a closing contingency makes them less competitive in this market. 
Tomorrow at 1 pm, (Friday Dec 30) we will meet with our agents for a strategy meeting. They say that sellers request to stay past closing is common. But that doesn't make me feel assured.
Additionally, they need to repair the roof before we close. A previous set of buyers backed out of closing when the sellers could not repair the roof on their own.  They were willing to use the proceeds of the sake to repair the roof. 
However, their agent says that now they have a roofer that will do the work and will wait to get paid on closing with the funds from the sale. So this may not be a concern.
What advice would you offer us? What should we bring up with our agent in our strategy meeting? Should we offer lesson the sale price AND charge for rent?  what would you cosnider in the contract?
Other considerations: This is a sellers market. Once the holidays are officially over more buyers may come into the market.  The area and home are desiresble, but the sellers request, I think have kept the house on the market limber than normal.  The house had been on the market for almost 1 month.
Sorry for repeat posts: the app doesn't confirm whether the her 

[Steve Milford]

Step back from this and look at it from a big picture.

Before you do anything... What happens if you don't get this house? Do you have time to keep looking? That is really your answer about how flexible you need to be. Is this deal a good deal for you based on market conditions? Only you can answer that. If you are just putting the offer in now, you still need an inspection and appraisal - room for more issues. How bad do you want this house?

Here are the issues it seems:

1) Once the home is sold, it is called a rent-back where the previous owners are now renters. This does happen although the concern is that now that they are renters, will they take as good care of the property as they did when they were the sellers? You will be signing a lease agreement - just like a rental. The sale of the home and the rental are technically two different issues. Also as the sellers are now renters, you are now the landlord and are liable if they get hurt or oopsy burn the house down. You also need to find out if your homeowners insurance company will allow it? Will your lender allow it if you are financing? Some firms will not.

2) The roof needs to get repaired and the only money that it seems is available is the money from the sale. 

3) What is the average DOM for comp homes? Based on that number you will have a better idea if another buyer might be coming soon. A bird in the hand is better than one in the bush for any seller.

4) Yes a closing contingency is harder for the sellers to find a home and submit an acceptable offer - because - drum-roll - it's a sellers market!! Once you buy the home, do you need to move in soon? Are the sellers looking now? Remember, that once the sellers have their house sold, they will have all this "cash" for a better down on a larger house if needed.

5) For the sellers, keeping the home on the market too long is not your problem - it is their's. The longer it is on the market - more and more buyer's agents will consider that something is wrong with the property, especially if avr DOM is much less.

All I can offer is what happened to me. On my last home purchase last year, I agreed to a rent back of 3-days to give the sellers time to finish their move out process at 1/30th per day of my mortgage payment plus a little. And then they needed another day and another day. I couldn't get the people out until I threatened to call the Sheriff and have them tossed out. When I did get them out, the last thing they said to me was, "Sorry for the mess." I walked in thinking that I could vacuum and then move in? HA! I filled my car to the rim 10 times for Goodwill and filled an apartment sized dumpster 3 times. It took me about a week to clean out and sanitize it to my standards. And I was "nice" because the owners were down on their luck. Never again. This situation forced me to be homeless for about 2 weeks, incurring costs I didn't expect. I got the luxury of having my stuff in storage and staying in extended-stay while they sat in my home. Next time the sellers can put their stuff in storage and stay in extended-stay with a penalty of $100+ extra per day over the closing date.

Good luck.

Steve