Should you let the seller stay in your new home after closing?

On Behalf of | Nov 30, 2021 | Residential Real Estate

Real estate in New York has always commanded a premium price compared with other markets. Buyers often have to pay more and make more concessions to become homeowners in New York City. Even if the market has cooled off slightly in recent weeks, demand for housing remains strong.

If you have found the perfect property for your needs, you want the seller to seriously consider your offer. Being flexible with your possession terms can help make your offer more attractive. This is particularly true for sellers who have not yet purchased a new home or who need to relocate for work on a specific schedule.

Allowing the seller to retain possession of the property after closing can solve their logistic concerns and can make your offer more competitive. However, allowing the seller to stay in a property when you own it means that you have to have additional protections in place. How do you limit your risk if you will allow the seller to stay in the property after you become the owner?

You need to negotiate an agreement with the seller

Indicating your willingness to take delayed possession after closing can be a big part of what makes your offer attractive to the seller. You will have to negotiate specific terms around that agreement or risk them potentially taking advantage of you.

In New York, buyers and sellers can execute a Post-Closing Possession Agreement that establishes protections and rights for both parties. You can assess the specific amount of rent and hold them responsible for any damage they caused to the property while moving out. They have a written contract ensuring that they have someplace to live while searching for their own home or waiting to relocate for their job.

Setting specific terms in writing will allow you and the seller to plan and will give you legal recourse if they violate your agreement, refuse to give up possession or damage the property. 

Knowing how to protect yourself is crucial in a real estate transaction

You will have thousands of dollars on the line when making an offer with earnest money attached. A real estate transaction could be the biggest purchase you ever make in your life, at least the biggest one you have made so far.

Having the right protections in place is crucial to limit what risks you take when looking for and buying residential real estate in New York.