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It's transaction specific. A lot depends on the individual Seller. What does your contract say?
As I stated in my original post I understand the legal end.
I was looking for others experiences with this. Did your seller stay until close? Did you stay until close if you were the seller. Or did you vacate the property when you got bank approval.
As far as I understand my contract can say be out by closing but people have still stayed. Extensions have been ordered and so on.
I read an article in our local paper of a couple going for the walk thru on the morning of closing only to open the door and find the seller still there and all of her belongings. I am looking for what others have experienced who have bought a seller occupied short sale or those living in their home while attempting to short sale.
Thanks.
Since they are living there for free, some short sellers (certainly not all) will stay just as long as possible. I would not recommend signing the closing documents if they are in there because then you will be responsible for moving them out, not cheap or easy. If you do the walkthrough and the sellers are still there, have your agent notify them that you won't sign until they are out. If they don't move out, it's time to figure out how to cancel and move on. You do not want them as your tenants which they become after you buy the house.
My contract says before closing they will be out. The house inside was a disaster when I viewed it back on Oct 1. I stated that I would want them and their things out before I did my inspection. Their realtor said they would be out last week, didn't happen. My wife said she saw them garage selling a bunch of things, good news but still not out.
Since they are living there for free, some short sellers (certainly not all) will stay just as long as possible. I would not recommend signing the closing documents if they are in there because then you will be responsible for moving them out, not cheap or easy. If you do the walkthrough and the sellers are still there, have your agent notify them that you won't sign until they are out. If they don't move out, it's time to figure out how to cancel and move on. You do not want them as your tenants which they become after you buy the house.
But they're not all living there for free are they?
But they're not all living there for free are they?
Not necessarily. But many short sales are due to unemployment or other financial distress that makes it hard/impossible for the seller to keep paying the mortgage. To make matters worse, many banks won't consider a short sale until the buyer misses payments...so they stop paying. Not much incentive for them to pay the mortgage when short selling, because the bank takes the hit, not the seller.
Our seller is living there for free for over a year now. This is why I am reluctant to think he is doing anything to get out early. I do feel bad for him and anyone going through a hardship especially at the Holidays. But I really hope he is making some moves to remove some of his things from the house.
Our seller is living there for free for over a year now.
If I was going to make such a purchase, I would "purchase" some insurance:
Tell the current occupant that if they vacate on time and without damaging
the premises, you will pay them $500 in cash. That's what I would do.
If it was more than $175k, I would offer closer to $1,000.
Think of what it would cost if they took a hammer to a nice tile floor or a countertop.
What if they ripped out some wires ( for the copper ).
You can't sue them. You might not even be able to prosecute them.
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