How Long Can The Seller Stay in The House After Escrow Closes?

Westcoe Realtors, Riverside Ca…What a great question posed to us by one of our on-line readers. Just how long can a seller stay in a home after the escrow closes?

The short answer is…as long as the buyer let’s him. Now…let’s clarify this a little.

Standard procedure in our business is that the seller normally gets the date of close of escrow plus 3 days to move out. This means that if escrow closes on Monday, then the seller gets Monday (the day escrow closes) plus Tuesday, Wednesday, and must vacate by Thursday at 6:00 PM. This is not set in stone, nor is it a law, but it is the customary procedure for the sale of a home. The reason this is done is that most sellers simply do not want to move out of the home before it actually closes. Things can go wrong even at the last minute, and the seller does not want to have moved everything out in the horrible event that the buyer fails to close at the last minute.

When the above policy is followed, then there is normally no charge to the seller for the 3 day delay in the buyer gaining occupancy of the home. It is a courtesy extended to the seller, and allows for the seller to know for sure that all is well, the escrow is closed, and the seller’s money is coming in a day or so.

Can this policy be different…or extended…or be shorter or longer?

Of course, but this is best done at the time of the offer, and as long as both buyer and seller agree, almost anything can be done. The seller could agree to be moved out on the actual day of closing (rare, but it can be done), and the seller can also ask to stay in the home for longer than the standard 3 days….5 days, 7 days…maybe even 30 days. As long as the buyer agrees, then whatever works for the both of them is pretty much OK.

However, if the seller is to remain in possession longer than the standard 3 days, then it is also normal for the seller to pay some rent to the buyer for this “extra” time. Usually the amount is simply a daily prorated amount based upon the buyers new payment, including taxes and insurance. As an example, if the buyers new total payment was $3,000 per month, then the daily rate would be $100 per day ($3,000 divided by 30 days in the month).

If the seller wants to stay any longer than 5 or so days, then there is also more paperwork involved, since you are bordering on the seller becoming a tenant. The California Association of Realtors has a form for this, and when the seller is remaining in the property for more than 5 days, it is highly recommended that this form be used and signed by both buyer and seller. By doing this, it greatly reduces any chance for miscommunication between the buyer and seller.

What happens if the seller is not moved out by the time they were supposed to? Well, that is a legal matter, and while we are not attorney’s, and while this is very rare, we have found that the police are very helpful if you meet them at the property with all your paperwork. This usually gets the sellers attention, and solves the problem. Again, please understand this situation is very rare.

Lastly, once the buyer and seller have agreed to the possession date in the original purchase contract, in most cases, it is very hard to change the possession date as you near the close of escrow. Sometimes as the closing date nears, the seller feels they need more time to actually move out, but by then, it is our experience that the buyer also has plans set (time off work, moving truck, friends to help, etc.) and extensions are just not possible. Remember: in the absence of any new agreement by the buyer and seller, the original time referenced in the purchase contract will control.

Good luck, and we hope this helps you plan your next move and close of escrow. Moving is stressful enough for all parties, and the last thing anyone wants is a conflict over who gets the home when.

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

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