Nothing deflates the excitement of buying a home faster than a seller who’s still in the house after closing. Such a scenario truly takes the social faux pas of overstaying your welcome to a whole new level.
“I’ve had people literally crying in the driveway, moving vans in the driveway, and the other people haven’t moved out yet,” recalls Nicole Solari, a top agent and first-time homebuyer specialist in Fairfield, California. “And conflicting times. Just lack of coordination, and lack of communication, is the biggest thing.”
Depending on the sellers’ willingness to be reasonable and how urgently you need to move in, you’ll either need to work out an agreement amicably or engage the help of an attorney if the situation escalates. We’ve got solutions and options for the specific scenario you face, whether it’s:
- You’re worried the sellers will miss the move-out deadline.
- The sellers refuse to move out, period.
- You need to negotiate a rent-back.
Scenario 1: You discover a house full of stuff during the final walkthrough.
It’s 24 hours before closing and you arrive at the house for a final walkthrough. You expect to open the doors and see the home in a “broom clean” state, which means swept, vacuumed, and free of debris or excess stuff you haven’t agreed to keep.
Instead, you enter a home packed with junk: closets full of old winter coats, heavy bureaus in the bedrooms, piles of stuff everywhere. It’s clear from the moment you walk in that the seller isn’t going to meet their move-out deadline.
What to do:
Stay calm, cool, and collected, and then take care of the following:
1. Double-check your contract.
If it looks like the sellers won’t be out by the date you agreed to, the first step is to confirm the details of your contract to make sure they didn’t ask for extra time after closing.
You might be 100% confident that you’re on the same page, but mixed signals happen when you’re managing so many details.
It can’t hurt to confirm once more what’s in writing (note that it’s common for buyers to allow a week to 10 days for the seller to vacate after closing).
2. Work out a compromise.
The purchase contract is crystal clear. Now, it’s T-minus 24 hours before the sellers agreed to leave, but based on the condition of the house, you have strong reason to believe they’re not going to make the deadline.
Before you threaten legal action, try compromising with the seller. Perhaps there was a miscommunication or last-minute emergency on their end.
“My advice to everyone is always the same: I try to work it out first,” says Zach Schorr, a Los Angeles-based attorney with nearly two decades of experience in the world of real estate litigation. “If they’re not getting out, it can be quicker to get them to agree on a certain date rather than spending a month or two in court.”
If you need to start moving things in, perhaps you can offer the seller limited storage in the garage for a couple of days after closing.
3. Delay closing and withhold funds in escrow.
If you haven’t signed the final closing paperwork yet — don’t. Once you close, you lose leverage. The sellers have the cash and the house at that point.
Agree to a delayed post-closing move-out date with the seller, and keep some of the closing funds escrowed until they’ve fulfilled their end of the deal.
For a first-time buyer, delaying closing might sound like a headache, but Edie Waters, a Kansas City agent with 25 years experience under her belt, says it’s a non-event for most agents. In fact, an agent will often plan for a closing mid-week so if you need to push it back 24 to 48 hours, you can still close in the same week.
4. Haul the stuff yourself and decide whether it’s worth suing over.
Let’s say you make it to the closing table, receive the keys, and start moving in. You then find the seller left more than a few small items behind: There’s still equipment in the shed, boxes in the attic, and piles of junk in the hall closet. You’ve asked your agent to contact the seller and requested that they come back to remove their possessions.
At this point you’ve got two main choices:
- Cut your losses. Toss, donate, or otherwise get rid of the stuff yourself. (Are any of the items worth keeping?)
- Keep track of what it costs to remove the items and sue the seller for the expenses.
Schorr once had a case where the seller of an estate left a ton of junk behind, and the buyer wound up spending several thousand dollars to have it removed. The purchase contract didn’t specify that the seller would leave the items, so the sellers were in clear violation of contract.
The buyer decided not to bother with small claims court, knowing the case would be long, drawn-out, and that paying a lawyer and showing up for court would ultimately be more expensive than what the buyer paid to get rid of the junk.
But, that’s not always the case, Schorr reasons: “it’s up to the buyer to determine if the cost of removal is worth suing over.”
Scenario 2: You’re in the driveway with your moving truck and the sellers won’t leave.
You pull up to your new home in a van packed tight with your belongings, only to discover the sellers haven’t moved out yet. Maybe you’re running up against the end of your lease, and if they’re not out within the week, you’re homeless. Or, maybe like this investor in Idaho, your seller moved more things into the house and even installed an additional satellite dish to the roof.
Bottom line — you’re ready to move in, and your seller isn’t moving out.
What to do:
With closing paper signed, and the deed in hand, you’re now the rightful owner of this property. However, getting the sellers to move won’t be as simple as asking them nicely to leave or changing the locks while they’re out. You’ll need to tread carefully to avoid any legal blowback.
1. Talk to your agent about next steps.
Reach out to your agent ASAP. In phone-tree fashion, your agent will contact the listing agent and broker to bring everyone up to speed, with the goal of helping the seller vacate the home before the situation escalates further.
Your real estate agent will also be able to connect you with reputable real estate attorneys in the area…because chances are high you’ll need one at this point.
Use your agent as a resource to find an attorney, then vet your attorney candidates with the following questions:
- How many seller holdover cases have you handled?
Try to get a feel for how often the attorney deals with this type of scenario and whether it’s a type of case he or she gets hired for regularly.
- How many of your cases end up in court?
Once holdover cases reach court, a long and expensive process ensues. Check if the attorney has a history of settling or mediating these disputes — avoiding court saves you time and money in the long run.
- How long do you expect this case to take?
Attorneys well-versed in holdover cases should be able to ballpark how long the case will take based on previous experience.
With an attorney by your side, you’ll be in a position to start the eviction process if necessary.
2. Send a demand letter
An attorney will help you submit what’s called a demand letter to the sellers. A demand letter describes your problem (you closed on a house but the owners won’t move out) and what actions you need the other party to take (vacate the property). It’s the first step in resolving an issue, and in one-third of all potential disputes, a demand letter leads to resolution.
When a seller won’t vacate the property even after delivering the demand letter, you’ll need a legal resource who’s well-versed in tenant/property laws in your state.
“You can’t just change the locks or force the sellers out without the proper process or they’ll sue you,” Schoor explains. That means it’s a good idea to bring on a lawyer at the very beginning of a seller holdover, even if only to work behind the scenes.
Once a seller remains in the home after closing, they’ve basically become your tenant. Forcing them out by changing the locks or intimidation, or entering the property without notice can lead to retaliation lawsuits.
3. Check your state laws.
Getting a seller to vacate the property is similar to evicting a tenant, though how long the process will take depends on where you live. Most states have unlawful detainer statutes that fast-track the dispute to trial within 45 to 60 days.
Eviction processes do vary state by state, but they generally follow this formula:
- You file a complaint with the court. You’ll need to file the appropriate paperwork and in some cases pay a small fee (an average of $50).
- From here, the person being evicted can:
- Move out
- Contest the complaint
- Not respond at all
If the seller challenges the complaint (sometimes called an unlawful detainer), the trial will take place within 30 to 45 days. If the seller doesn’t respond, the court will often rule in favor of the buyer.
- The complaint goes to trial. If the seller shows up, both the buyer and seller will present their points. If the seller is a no-show, the judge typically sides with the buyer and grants eviction.
- Writ of execution or possession. If the judge rules in favor of the buyer, a marshall or sheriff will deliver the eviction notice. From there, the person will have between three and five days to vacate, depending on the state.
Eviction can be a long, complicated, and emotional process. You shouldn’t resort to it unless you’ve exhausted all other options to compromise and negotiate with the seller.
Thankfully, this type of extreme situation is rare: “Knock on wood, but I’ve been selling real estate for 25 years, and our team will sell over 500 homes this year, and I’ve never had this happen,” Waters says.
Scenario 3: The seller asks for a rent-back.
As you draw closer to closing, your seller might ask to stay on the property a little longer.
“It’s typically when the seller is building a new home and the construction is delayed by a few days or weeks,” explains Waters.
This upfront ask is called a lease or rent-back, and instead of moving in right after closing, you become the seller’s landlord while they continue to live in the home temporarily.
What to do:
Depending on your situation, a rent-back could be a welcome offer or a housing headache. It all hinges on your flexibility, accommodations, and timeline.
1. Weigh the pros and cons of a rent-back for your situation.
- Pro: Money in the bank.
This isn’t a free deal for the sellers. They’ll be obligated to compensate you. To work out a prorated daily rate, divide the monthly payments (including insurance and taxes) on your new home by the number of days in the month. You can also tack on a premium for the inconvenience: “I’ve had sellers pay up to $500 a day to stay in a home,” says Waters. If you’re willing to be flexible, you can make a quick buck leasing back the property.
- Con: You’ll need another place to live in the meantime.
Depending on your housing situation, a leaseback could leave you homeless, or scrambling for temporary housing. It’s one thing if you’ve still got a few weeks left on your lease. It’s another if you’re in the middle of moving cross-country with kids in tow and expected to be able to move in by a certain date.
- Pro: Sweeten the pot.
Being flexible with a seller’s move-out options can help you stand out in a competitive market. Agreeing to a rent back could be the ticket to securing an offer in the first place.
- Con: You’ll need to play landlord.
When the seller rents the property back from you, you assume the role of the landlord. That means any unexpected issues like a burst pipe, broken fridge, or failed AC are now up to you to handle.
2. Set up a detailed lease or contract.
The rent back isn’t a handshake deal. Just like any rental agreement, you’ll want to work with your agent or real estate attorney to nail down the terms of the agreement, including:
- Term of the rent-back period (the rent-back should last no longer than 60 days. Any longer, and the property is classified as an investment residence instead of primary residence, and the terms of your mortgage will likely need to change)
- The amount the seller is expected to pay in rent per day
- The party responsible for utilities
- Buyer’s rights to enter the property
The buyer can also ask for a daily fee if the seller stays beyond the agreed dates and a security deposit for damages incurred during the rent back.
3. Get the right insurance coverage.
Since you won’t be living on your property, the sellers will need to get renter’s insurance to cover the belongings in the home in the event of fire, theft, or vandalism. Your homeowners insurance won’t provide coverage to the property because you’re not living in it. You should require proof of insurance before agreeing to a rent-back contract.
Whether the sellers left a basement full of seasonal decorations and heavy furniture or just flat-out refuse to leave your new home, you’ll need to reopen those lines of communication and consider striking a compromise.
The moment you realize the move-out isn’t moving smoothly, loop your agent in and consider consulting an attorney. When the seller lingers like a bad smell, you need to start protecting yourself using the leverage you still have, whether that’s crafting an airtight rent-back lease, keeping funds in escrow, or filing a formal letter of complaint. Don’t let a seller’s refusal to leave defeat your achievement of buying a home.
Disclaimer: Information in this blog post is meant to be used as a helpful guide, not legal advice. If you need legal help with a seller holdover situation, please consult a skilled lawyer.
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