13 Feb Help! I’ve Sold My House, But I Can’t Move Out by the Closing Date!
A closing date requires a home seller to be moved out by the closing. Home sellers are required to have left the home no later than the completion of the closing. While this is written into most real estate agreements, it doesn’t always work out as planned.
There are many reasons a home seller can’t get out of their home in time, including:
- Not finding a new home
- Waiting on a new construction home to be completed
- Financial delays
- Movers – yes, movers
Whatever the reason, what can you do as a seller if you can’t get out in time? Your lawyer can take a proactive approach to delays in moving out. Here are a couple ways to navigate these murky waters.
Work with a Savvy Real Estate Lawyer
The first and most important thing you can do if you’re concerned you won’t be out by the closing date is to contact your real estate lawyer. Your lawyer can do a great deal to help in this situation if you get in touch early.
Your lawyer may be able to work with the home buyer’s attorney to either push back your closing date or have some of your funds held in escrow until you move out. Your lawyer can create a written agreement between both you, as the seller, and the buyer, known as a “Post Closing Possession Agreement.” This agreement sets forth the rights and responsibilities of the parties to allow the seller to remain in possession of the property after the closing.
Post Closing Possession Agreement
Of course, not all buyers will be keen on this idea – after all, they bought your property to live in and were not expecting to be landlords! Additionally, there is always the risk now that closing is over and you have your funds, you will not treat the property with the same care as you did when you were the owner and may even cause damage, just as a tenant may do.
However, should the buyer and seller agree to enter into a Post Closing Possession Agreement, the amounts and timeframe must be agreed upon by both parties. Typically, the seller would pay the buyer of the property a per day amount which includes the buyer’s mortgage principal and interest, real estate taxes and insurance (a/k/a PITI) through the agreed upon possession date; this payment is called “use and occupancy” – similar to rent. The seller would also have a certain amount of their funds from the closing held in escrow to guarantee, as much as possible, the seller moves out timely and does not damage the property – similar to a security deposit. The Post Closing Possession Agreement should also provide for penalties should the seller fail to leave the home on or before the agreed upon possession date. Although this type of arrangement absolutely has its pitfalls, it does allow the seller to live comfortably in their home after closing.
Contact Mages & Price LLC Today
Mages & Price LLC serves homeowners and investors across the Chicagoland area. Whether you are a home seller or buyer, we can help protect your investment and make your closing process a great experience.