There are many challenges associated with residential real estate transactions that can cause complications. For example, buyers may offer a high price for a property, only to have the appraisal come in lower than anticipated. The buyer might lose a job before closing, leaving them unable to obtain a mortgage.
Other times, the complications could come from the seller rather than the buyer. The seller may list their property and accept an offer, only to then struggle to find a new place to move. With a competitive market where there is more demand than supply, sellers may have a hard time acquiring a new residence after arranging to sell the home where they currently live.
The seller may not be able to move out before the closing date. Yet, there is potentially a solution available when sellers have a difficult time locating a new residence after deciding to sell the home where they currently live.
The seller can temporarily retain occupancy
Buyers are often eager to take possession of a property as soon as possible. However, they may also agree to certain compromises so that they can acquire the home they desire. Sellers can sometimes negotiate terms that allow them to stay in the home for weeks after the closing on the property.
Such arrangements typically necessitate the negotiation of a post-closing occupancy agreement. The buyer agrees to a specific timeline and also a specific amount of compensation per day for the inconvenience of allowing the seller to stay.
The seller secures more flexibility regarding when they have to move, but they may need to pay a premium price to stay at the property. They could also be at risk of eviction from the home if they do not leave by a certain date or fail to pay the price negotiated with the buyer on a per diem basis.
There are a variety of solutions available when the current real estate market conditions complicate a pending transaction. Buyers and sellers may both benefit from securing legal representation as they draft agreements and review offers.
Agreeing to a post-closing occupancy arrangement often requires careful contractual protections for both parties in a residential real estate transaction. Proper contracts can limit the risk inherent in unusual real estate agreements.