ABA Family Legal Guide

Buying and Selling a Home

The Steps of Buying and Selling a Home

Making an Offer: The Purchase Contract

Should I allow the seller to remain in the home after closing?

The better practice is almost always for the buyer to obtain possession at closing. Generally, the buyer will be paying the mortgage as of closing and will not want to pay for two residences. In addition, the buyer runs the risk either that the seller will damage the property while moving out, or will fail to move out as promised. The buyer can be faced with the expensive and time-consuming task of having to evict the seller.

Sometimes, however, a buyer may agree to allow the seller to remain for a specified period of time. For example, the seller may be moving to another state one month after the closing or, perhaps, the seller is waiting for a builder to finish a new home. The seller may need the proceeds of the sale in order to complete his own purchase. If the buyer is renting and the end of the lease falls after the closing, it may be advantageous to the buyer to delay possession.

If you are a buyer and find yourself in this situation, do not rely on oral promises or a statement about the date on which the seller promises to vacate the premises. Make sure your purchase contract or a separate document (such as a lease or use and occupancy agreement) states how long the seller may occupy the home after closing and specifies the rent owed to you for that period. The document should also specify any penalties in the event the seller does not move, does not pay rent after closing, or does any damage prior to vacating the premises. Most contracts provide that a certain amount of the seller's proceeds will be withheld in escrow from the closing to ensure that the seller vacates as promised. Finally, be sure to clarify whose homeowner's insurance applies during this interim period.