Q: We just closed on a house, but the sellers have not vacated the property on our agreed terms. They were supposed to be completely out on the closing date. But they’re still there.
We just want to move into our new home. We're running up against the end of our lease, and will have to be out from our place within the next week. What should we do to get them to move out?
A: Ugh. Sellers who won’t leave. This is one of the recurring nightmare scenarios Sam worries about when he represents buyers. That’s why the first thing he does when he meets his buyers at the closing table is ask whether they have inspected the property just before the closing and if they can verify whether the sellers have moved out.
If the sellers have moved out, and the property was left in the condition required under the contract, Sam proceeds with the closing (known as a settlement in some parts of the country). If not, then the closing is either delayed (if the sellers are in the process of moving out) or some significant portion of the funds is put into escrow, until the sellers complete the move.
Several weeks ago, Sam had a client who was buying a home. The buyer had inspected the home the day before closing. When the buyers got to the closing, Sam asked them if the sellers had moved out. One of the sellers was at the closing and asked if she could leave some stuff at the home and pick it up a day or two later. The buyers agreed.
However, when the buyers got to the home, it turned out that the sellers had left quite a lot of stuff in the home. Before finalizing the closing, Sam had one of the buyers go to the property to check, and it turned out that most of the stuff in the kitchen, bathrooms and garage had not been packed or moved out.
Sam wouldn't allow the buyers to close until the sellers were completely out. That meant no money. Once the sellers understood that salient point, they quickly found other people to help them pack the remaining items and get them out of the property.
Sam’s preference is for sellers to leave the home before closing, where they hand over the keys and head off to their new home. Unless specifically negotiated and documented in the contract, buyers are entitled to take possession of the home when they pay the seller the money for the home.
If a seller wants to stay in the home after closing, the buyer and seller should have a written agreement setting out the expectations for that post-closing possession between the parties.
Sometimes a seller needs a day or two, or even a week, after closing. When these situations arise, some of the purchase price (often a daily fee) is often put into an escrow account, held back to make sure that the seller moves out as promised and leaves the home in the shape it’s supposed to be in under the contract. If the seller does not vacate on the appointed date, or leave the home damaged in some way, then the money held in escrow can be given to the buyer as a penalty or to fix the property.
Unfortunately, you’ve lost your leverage. You’ve paid the money and the seller hasn’t moved. Now you’ll need to engage an attorney to demand possession of the home and determine what steps you can take to force them out. In some states, getting a seller out can take time because you have to go through the eviction process. In the meantime, the seller is staying in the home for free. Check your purchase and sale agreement to see what it says in case the seller defaults on the delivery of possession of the home to you. You may be able to sue the seller and recover attorney fees as well.
Your first step is to consult with a savvy attorney who can help you figure out your options and next best step. Let us know what happens.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, ThinkGlink.com.