Closing Soon and no word on Tenants Vacating

[Carl W.]

We're ready to close on our first investment property (a house hack) but the sellers say they need until the first to get the tenants out. The contract states the property must be vacate for the property to close and so they claim they have given the tenants notice to vacate by that date. We've spoken with the sellers throughout this process to say the property must be vacated. I'm willing to wait until the first for the tenants to move out but we want assurances that will happen because we're getting mixed messages. At one point, they said the tenants were going to leave immediately when we were ready to close and then they flipped the script. Of course, that did not happen. Now we're asking for them to confirm the tenants will be out when they say they will and it's been nothing but dead silence from the seller's side. I'm really losing my cool here because I don't know what's going on.  

[Nick C.]

Sounds like the sellers are doing what they can to get the tenants out as agreed upon. Unfortunately any assurances you get will only be as good as what the tenant is telling the seller. Unless your seller is planning to physically remove the tenant with violence everyone is going to have to wait. 

[Matt Ziegler]

Reschedule the closing until the property is vacant. Better to wait a bit than to make the current tenant your new problem.

[Charlie MacPherson]

@Carl W.  No matter the promises, you should do a walk through immediately before closing. By immediately, I mean when you're on the way to the closing.

You can check for damages that occurred after you saw the property and to be sure it's vacant.  Our contracts typically state "vacant and broom clean".

If it's not vacant or if there are new damages, you can do a hold-back of funds sufficient to remedy the issues, but with COVID eviction moratoriums still in place, I would refuse to close.  You could be stuck with a professional tenant that drags the eviction out for a very long time.

[Carl W.]

Originally posted by @Nick C.:

Sounds like the sellers are doing what they can to get the tenants out as agreed upon. Unfortunately any assurances you get will only be as good as what the tenant is telling the seller. Unless your seller is planning to physically remove the tenant with violence everyone is going to have to wait. 

Yeah, now it's just a wait and see situation but the whole thing has just been so shady we want to make sure now that we're ready to close it's gonna happen. We were originally told they were doing cash for keys, which made sense considering the circumstances. Just pay them to leave but then the story changed. Who knows why? No one is talking.

[Carl W.]

Originally posted by @Charlie MacPherson:

@Carl W.  No matter the promises, you should do a walk through immediately before closing. By immediately, I mean when you're on the way to the closing.

You can check for damages that occurred after you saw the property and to be sure it's vacant.  Our contracts typically state "vacant and broom clean".

If it's not vacant or if there are new damages, you can do a hold-back of funds sufficient to remedy the issues, but with COVID eviction moratoriums still in place, I would refuse to close.  You could be stuck with a professional tenant that drags the eviction out for a very long time.

Oh, we're definitely doing a walkthrough before close to make sure the sellers completed certain tasks that we requested. I actually would prefer to do the walkthrough 2 to 3 days before in case they need to do any last-minute fixes. I don't want to hear anyone say again, "Oh, we didn't know. No one told them XYZ." Yes, the contract states the property must be vacant and broom swept clean. We're trying to do everything by the book here. 

[Bill B.]

Just remind them you plan to walk through before closing to make sure promised repairs have been made and to look for damage caused by tenants moving out. (So you’re giving them credit that they will get the tenants out but still have a reason to check it out.)

I’ve always looked at the property the day of closing (sometimes for the first time ever.) I’ve never found a problem but what if an air conditioner was stolen, or the appliances removed? 

[Carl W.]

Originally posted by @Matt Ziegler:

Reschedule the closing until the property is vacant. Better to wait a bit than to make the current tenant your new problem.

There's nothing to reschedule as we're already waiting for them to vacate.

[Aj Parikh]

If your closing is contingent on the tenants moving out, then I would just stick with that. If they don't move out, you don't close on the home or delay the closing till the tenant moves out. 

[Carl W.]

Originally posted by @Aj Parikh:

If your closing is contingent on the tenants moving out, then I would just stick with that. If they don't move out, you don't close on the home or delay the closing till the tenant moves out.

Yeah, this appears to be the case. It's now just a waiting game and there's no telling when the property will be vacated. It's so annoying to me because I feel like the seller should've been more aggressive in getting these people out months ago. I'd been asking for the longest time when they would be given the notice to vacate. I was informed by my attorney that couldn't happen because if the sale had fallen through the sellers would have no sale and no tenants. I understood, but since they're problem tenants I knew them waiting to get them out would only spell complications with the sale when it came time to close, and here we are.