It can happen: a buyer of a new home is confronted with a situation where the seller of the home has “seller’s remorse” and does not want to vacate the home that has just been sold so that the new owners can move in and occupy it. The problem resulting for the new owners is what to do in getting the former owner out of the home that they no longer have.
Purchase Contract
The signed purchase contract for a home between the seller and the buyer typically controls the obligations owed by each party to the other. Consequently, it is very important that a buyer carefully read and understand all provisions within all offers (or counteroffers) made for a piece of property. Normally most sellers and buyers of real property have licensed real estate agents representing their interests in a given transaction. Prudence also suggests that a buyer or seller also retain a licensed attorney in the state where the property is located in order to review all documents concerning the possible sale in order to safeguard the interests of each.
Language To Safeguard a Buyer’s Interests in Purchasing Real Property
One of the best ways to prevent a holdover occupation by the seller is to have language in the purchase agreement (or addendum) placing safeguards as well as penalizing language in the sale agreement covering an unauthorized occupation of the property post close of escrow. Typical language in a written agreement signed by the seller and the buyer would include the following:
"The seller agrees to vacate the property to be sold at least two full days before the slated date of close of escrow removing all items of property from the premises before close of escrow."
By doing this, the buyer is assured that before close, he can drive by the property and inspect it with his real estate agent to see whether the seller has moved out.
Have a provision in the purchase agreement that once the seller has moved out of the property, the keys are turned into the escrow company before close. Such a provision has the effect of creating a course of action from the seller, though the seller could have extra keys. In this event, consider inserting a provision within the sales agreement that the new buyer (once the seller has turned his keys in) can have a locksmith come out before close to change the locks and the new keys will be held by the escrow officer. By doing this, the buyer has some assurance that only he has proper access to the property once the escrow closes and the escrow officer hands over the keys.
Another safeguard for the buyer is to have a written provision in the purchase contract holding back a significant amount of money ($25,000.00) due the seller from the escrow as damages for the buyer if the seller fails to leave the premises after close. This money is only to be released when the buyer confirms in writing that the seller has moved out. The problem arises if the sale is a short sale and the sellers do not receive any money from the transaction. In such a situation, there is no money to hold back.
Other Considerations
In most written sales agreements for real property there is an attorneys fee clause allowing the award of reasonable attorneys fees to the prevailing party when there is a dispute between the seller and the buyer. The problem arises when the sellers refuse to leave a sold home and then file for bankruptcy protection. This causes the buyer additional expenses that were not contemplated when the agreement to purchase was signed.
Best Prevention Against A Holdover Seller
The best prevention against a holdover seller is to have all agreements reviewed by an experienced real estate attorney before signature. By doing this, issues not contemplated by the buyer could be discovered by this licensed professional , Proper safeguards can be inserted in the written agreements and escrow instructions.