Escrow Has Closed and the Seller Won’t Move…What Does a Buyer Do?

Westcoe Realtors, Riverside Ca…Today’s subject is pretty rare in our industry, but earthquakes don’t happen very often either, and they sure get your attention…and so will this situation if you, as a buyer of a home, ever find yourself dealing with a seller that won’t move.

So…what do you do?

First, before we begin, we need to put the standard disclaimer here that we are not attorneys, and cannot practice law. Our intention here is to give you the practical answer to this situation as we have dealt with it a couple of times over our 29 years in business. So please understand, we are answering this dilemma from a real estate experience standpoint, not the prospective of an attorney…whom you may have to consult anyway!

So…back to what do you do, if as a buyer of a home, the seller refuses to get out on time?

The first thing to do is make sure your paperwork is very clear on the date you, the buyer, are to obtain possession of the property. If you used the Standard Residential Purchase Agreement (and if not, you are crazy), paragraph 9B deals directly with the possession date for the buyer. When the offer to purchase is originated, the normal procedure here is for the seller to give possession to the buyer “no later than ___ days after close of escrow”. As the buyer, you can put any number of days in the blank, but most transactions work with 3 days.

Therefore, in the example above, if the buyer has asked for possession to be 3 days after the close of escrow, then the seller has the close of escrow day plus another 3 days to vacate the home, and unless it has been noted otherwise, the buyer gets the home at 6:00 pm on the 4th day. To be more specific, if escrow closes on Tuesday, then the seller gets Tuesday (close of escrow day) plus Wednesday, Thursday, and on Friday, must be out by 6:00 pm.

So, now that you have a clear definition of when the seller must be out, what do you do if they aren’t? If they are still in the home and refuse to move for another couple of days?

Well, we call the police. Most officers are loath to get involved with any type of dispute that sounds like it should be decided by a judge. However, we have found that in a case like this, when presented with the paperwork that shows the home is no longer the sellers, and that the buyer should indeed have possession of the property, most officers will make it very clear to the seller that they need to be out…pronto. Usually, pronto equates to 24 hours. In the rare times this situation has occurred, this is the normal method we have used, and it works. The officers are generally sympathetic to the buyers predicament, and since the seller has had the entire escrow period to plan for the move, the litany of excuses they give the officer generally don’t fly. Your situation could be different, but this has worked for us a few time.

However, please note this only works if it is the seller occupying the home. If it is a tenant, then you are screwed!

We don’t like the following statement, but we must acknowledge it…and that is this: Tenants have far more rights when it comes to possession than a seller…SO NEVER CLOSE ESCROW ON A HOME WITH THE TENANT IN POSSESSION UNLESS YOU INTEND TO KEEP THE TENANT IN THE HOME AS A RENTER. If you are a regular buyer who plans to live in your new home, and the home has been occupied by a tenant, then no matter how many promises the seller or the tenant make regarding the tenant vacating the home, don’t you dare close the escrow until you have verified the tenant has moved. The consequences if the tenant changes their mind are awful. It can take up to 6 months to legally get the tenant out, and all that time, you will need to make the new payment on “your” home, as well as whatever it will cost you to live somewhere until the tenant moves…and let’s not even count the potential damages to the home as the tenant finally leaves.

Yes, you can sue the seller, or the tenant, but good luck with that. The seller has probably moved to another state, and if the tenant is the type that will put you through all this hassle, then you probably can’t get “blood from a turnip”…or any money either.

Now, back to what to do if the police won’t help you. Well, now would be the time to get an attorney involved…and a good one can write a very scary letter to the seller, pointing out all the financial ramifications the seller will incur if they don’t honor the contract date, and usually that will do the trick. You will have to pay for the attorney however, and then if you want, take the seller to small claims court for any other expenses. This is a hassle, but available to you as an option.

In the end, this situation really is very, very rare…but ugly when it happens. Hopefully you won’t ever be here, but if you are, then perhaps this blog will help you get out of a very sticky situation. Good luck.

Take care, and as always, thanks for reading our blog.

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