Buyers: Don’t Close Escrow Until the Tenant Moves Out!

September 2, 2015

Westcoe Realtors, Riverside California…Like most industries, we in the real estate business have our share of horror stories…and our hope in sharing some of these with you is to save you from some of the messes we hear about.

 

Today’s topic:  If you are the buyer of a home that is tenant occupied, unless you are planning on keeping the tenant in the home as a renter, don’t ever allow the escrow to close until the tenant is out, and you or your agent  has physically verified the home is vacant.

 

The key to this situation is understanding the difference between a seller who is occupying the property at the close of escrow, and a tenant who is occupying the property…and again, we are not attorney’s here, so our CYA here is for you to talk to your attorney if you find yourself dealing with this problem.  However, we can give you the benefit of our experience.

 

OK, now that we’ve established that, here’s what you need to know: a tenant has far more rights when it comes to removing them from a property at the close of escrow than a seller…rights that could cost you months of delay and agony while you make the payment on your “new” home that you can’t move into.

 

Just because the tenant has verbally agreed to move at the close of escrow doesn’t mean they will…and if they change their mind, refuse to move, have some big family crisis, etc., you are stuck, because getting a tenant out of a house they don’t want to leave can take 90-180 days (or longer), depending on the situation.

If you think you were hot when they didn’t move out, take your temperature when you are making house payments and can’t move into the house!

 

You can get a mad as you want with the previous seller (who said the tenant would be out), but once you, as a buyer, close the escrow, you have pretty much lost all leverage to get the tenant out.  Understand, once you close escrow, the sellers problem now becomes your problem.  Oh, you can sue the seller, and probably eventually get some money, but why go through the cost and hassle of all that?

 

Our advice….just don’t close the escrow until the tenant is out.  Now, it’s the sellers issue, and since the seller wants their money from the sale of the home, let them deal with the tenant.  Contractually, it is the seller’s responsibility anyway, so let them solve the problem.

 

All we are saying here is that when it comes to a tenant occupied property, protect yourself from the worst case scenario by making sure it can’t happen.  With a seller in possession, you can call the police, present your paperwork, and they can pretty much get the seller to move because the seller never had an agreement to occupy the property.  However, with a tenant, they DID have an agreement, and that agreement gave them rights, and only a court can decide how or when to enforce those rights….and that takes time.

 

So…avoid the hassle, heartache, and “money-ache” if you ever purchase a tenant occupied home, and just make sure they are out before you close…you’ll be very happy you did.

 

Take care, and as always, thanks for reading our blog…and let us know if you have any questions you might like to see answered here.

 

 

 

Share on Facebook
Share on Twitter
Please reload

Featured Posts

What Can a Seller Take With Them When a Home Sells?

November 30, 2017

1/2
Please reload

Recent Posts
Please reload

Archive