Know the risks of letting a seller stay in your home after closing

| May 19, 2021 | Residential Real Estate

With prices soaring and listed properties selling quickly, it is a hard time to try to purchase real estate in New York. You may have to make an offer of well over the asking price to buy a property. You may also need to find other ways to incentivize the seller to pick you.

 

Recognizing how difficult buying a new home can be on the New York property market could help you make a more attractive offer. Allowing the seller to maintain tenancy in the home after closing temporarily can make it easier for them to handle the logistics of selling one home and moving to another.

 

Typically, buyers willing to offer this kind of flexibility will set specific terms in their offer that require compensation or rent for every day the seller stays in the home. Before you make an offer to let the seller stay, it’s important that you recognize what the consequences of that offer might be.

 

The seller could overstay their welcome

Maybe you currently have a month-to-month lease that you can terminate easily in the future. Perhaps you live with family members while looking for a home, giving you even more flexibility. You may not worry about how long the seller will stay in the home at first because you aren’t in a rush to move.

 

However, as the days turn into weeks and months, it can be hard to remain patient about moving into a home that you already have to pay mortgage costs, taxes and insurance premiums to own. If they don’t leave, especially if they fall behind on their rental obligations, you may have no choice but to evict them. Eviction is an expensive and lengthy process that most people would rather avoid.

 

The seller could damage the home before leaving

People often do a final walk-through of a property before closing to check for any recent damage to the property. The seller could have caused substantial damage to their home if they stayed there after you closed on the property.

 

Not only may they stop cleaning and repairing the home as they should, but they might intentionally cause damage because they no longer have to worry about the costs involved to fix it. Although you can potentially hold a seller accountable for that damage, you will have to take them to court to do so in most cases.

 

When you want to add contingencies to your offer, it’s important to explore all of the consequences they could bring so that you adequately protect yourself in one of the biggest transactions of your life.