Previous Owner Not Vacating After Shortsale. Legal Options?

[Mehran K.]

Situation: I've got this deal I'm working on where a shortsale was initiated by the current owner. The sales price ($37,000) was approved by the lender and we made an offer for $35,000 that was accepted. I got the inspection (came out great) and the appraisal (came in at $40,000) done.

We were set to close on April 25th and the current owners were to vacate the property by that time to deliver the property vacant. I found out a week ago that the current owner is refusing to leave/unable to find a place to move prior to closing.

Salvaging Deal: After some haggling, we got the asset manager at the bank(and the investors) to agree to drop the sales price to $32,500 and they will be paying up to 5% of my closing costs. This is to reduce my risk of damages/eviction costs. Supposedly the tenant has agreed to leave within 30 days after closing (which potentially means nothing) . I'm at the point now where I'm trying to decide if I should go ahead with this.

Concerns:

1. Current owner may not leave as agreed and therefore I have to evict them. They aren't tenants who didn't pay late, and It's not like I will own the note and they are defaulting on it. Looking into the process now.

2. Property may be damaged on their way out, resulting in more costs.

3. Are there any laws protecting previous owners being foreclosed on/going through a shortsale that will prevent me from being able to get them out of the property quickly?

Any thoughts/advice on the situation would be appreciated! Tags: Milwaukee - Wisconsin

@Dawn Anastasi , @Ramon Jenkins

[J Scott]

Here's my suggestion, having gone through this several times...

First, don't take title until they're out, unless you will be happy fighting for the property for the next couple months (see Will's thread on "the tenants from hell"). Second, offer them cash for keys, but let them know that they won't get the cash until the place is vacant and the keys are handed over (even if it's before closing)

Unfortunately, there are people out there who don't "get it" and don't realize that they're getting kicked out sooner or later and they would just be passing up free cash by not leaving now.

I once had a seller who was getting $20,000 from the bank to move (I was buying the property for $95,000!), and they still refused to leave until it was made abundantly clear that they wouldn't get the money until they moved out and the house was going to foreclosure less than a week later (at which point they'd lose the house and the money).