Seller wants to stay in house after closing for 60 days

[Joe S.]

Seller wants to stay in house after closing for 60 days. What are other buyers doing when this happens? Are you holding a big amount of money back? If so how are you putting it on the HUD and who holds the money? We have a lender involved as well so how would I write up the purchase contract to appease the lender?

[Charlie MacPherson]

@Joe S.  This can be no big deal - or it can end badly.  I would try very hard to find a way around it, like finding a different place for their short-term rental needs.

When I was a Realtor in Mass, I helped someone to buy a home.  It was a bit of a unicorn as his budget was just barely enough to get into an entry-level home.  We didn't have a lot of choices and with prices rising at 6%+ per year, we were under time pressure too.

Normally, I'd advise the buyer to refuse, but in this case, we agreed to let the seller stay for 2 weeks after closing.  We did a holdback of several thousand to cover rent, eviction and cleaning as she was a borderline hoarder.

She stayed for 5 weeks and our holdback wasn't enough.  She left the place a mess and more than burned through the holdback amount.  In the meantime, my buyers were forced to scramble to figure out their own housing.

So my advice is to allow a post-sale occupancy only as a last resort.  If you do it, get a "Use & Occupancy Agreement" and a holdback that's large enough to make it hurt if they stay beyond the vacate date.  By that I mean charge an above market rent during the period you agree to and then double or triple it if the seller fails to vacate on time.  Be sure it's also large enough to pay for a contested eviction - and have an attorney draw it up for you.

Good luck!