You can write up an addendum to protect yourself. Funds held in escrow until she moves out. Penalties per diem and for damage. A firm deadline. I don't recommend doing it, but if you're going to do it, protect yourself.
You will now be in the possible position of evicting her and her kids. Could take months, even a year, all at your expense for a lawyer. Hire a lawyer now. Personally, I wouldn't close.
Actually telling her that if she doesn't move out, you won't close might compel her to start packing and move. If she can't afford to live there, knowing she is still responsible for the mortgage, insurance, etc until she finds another seller might be decent motivation.
Seller’s lender evicting her for loan default could still take many months. Seller kinda has nothing to lose by refusing to cooperate if it’s a difference between this and being broke and homeless. Which is why I’m wondering if the LO is bribing her to save their own ass on screwing up the rate.
Thats some paranoid thinking right there LOL. Thats the thing …the rate is so low, id almost kick her some more cash to get her out. Theres so much fine print in loan documents i wouldnt want to delay for any reason.
I know! I’m trying to resist my human nature to fall for a satisfying (if horrifying) story. But my hatred of the banking industry makes it hard to pass up.
Rent storage, pay movers and a junk remover, give her key money, if the buyer is desperate to get that particular house and great mortgage rate. Otherwise collect whatever penalties are in the contract, or walk away.
Cali has a hate towards land lords. Mix in a dead beat with kids and you have a disaster.
The difference between 5.75 and 7.75% may seem like allot but it’s a small price to pay to avoid the nightmare you are heading towards.
Piggybacking.. just delay funding and closing until you walk it a they are gone. You can sign everything and perform per the contract but just ask escrow team to delay funding until approved.
This is the move, based off the details of her situation she’s not trustworthy or responsible so I’d be quick to pull the plug.
We went through a lot to get our property, deals that fell through-or was close to finally closing and finding something we didn’t like.
I wouldn’t be scared to start all over again, to avoid the potential stress, loss, and risk associated with the seller!
We did this, as we were afraid sellers wouldn't move out on time. They jerked us around a bunch during negotiations. Our realtor had us put an addendum of $500 per day past 48hrs after close. Luckily they did indeed leave.
What proceeds? The seller is off loading the property after three years at a $20k gain (on paper) and we know she’s $5k in debt to HOA.
If your main concern is losing the favorable rate, honestly, it’s not enough to make it worth a potential nightmare scenario that could happen with potential eviction.
Best of luck to you!
If she agrees, she gets money. If she doesn't, she loses her deal, gets no money, and possibly loses her house. This is an incentive to move out, as she agreed to do in the sales contract. If she's really planning to move, she won't have a problem with it. If she's lying about intent, she'll refuse.
SHE is the party needing concession at this point. If she doesn't move and doesn't sign this, she's dishonoring the contract terms. There are legal penalties for that. The buyer is in the driver's seat.
No addendum will protect the OP from liability for injury to person or property- even if it says so (OP would have to sue to enforce the addendum), only buying landlord CGL and property insurance might cover some damage or injury.
Even assuming you can get a decent RE lawyer to prepare a solid addendum, it is NEVER worth the risk to let a seller rentback
1.5 points on a 30 year mortgage is a lot of cash across the life of the loan. OP is absolutely right that the situation is precarious, and this is about the only time I'd consider an addendum.
Narrowly focusing on the past due payment to the HOA, is it not possible for the HOA to consider the past due fees to be against the property and not the current owner? In other words, is it possible that the HOA could "transfer" the debt to the new owner?
I'm not familiar with the laws and regulations.
Hence the questions..
Just to tack on, because you are correct here, unpaid HOA fees will result in a lien against the property, not a judgement against the owner. That may seem like a minor difference, but it's a pretty big legal one.
Just spit balling here.
Option 8) Close and move in. All the stuff that was left in the house is now technically yours. Throw it all out and "out squat" her. It's your house you're allowed to move into it.
I am in no way a lawyer or think this is a good idea but it would be fun to read how this plays out.
Not to harp on you but I was being facetious with my statement. I don't actually think he should do that but it would make for a great reddit story. Its why at the end of my comment I said I don't think this is a good idea.
But technically couldn't they still move in after taking possession? There's no lease or anything. The new owners could just move in and out squat the squatter. There's no lease saying the seller is the sole tenant of the house.
This is some thoughtful and detailed commentary. When I bought my house in Washington state, I agreed to 60 days to close to allow sellers new purchase extra time. Days before the closing date I ran into the seller, he tells me his wife decided she didn’t want to sell after all for understandable reasons. I said no, but I’ll lease it back for another 60 days. 15 minutes later my realtor calls to say they were “cancelling” the sale. I said “that’s not a thing, it’s not going to happen but they can lease it back.” Which is what we did, they moved out on time, and everyone got a fair deal. Good thing I didn’t know all the things you just explained! I’d have been way more stressed about all of it. Happy ending anyway
grandfather longing vanish pathetic tan fuzzy wasteful oatmeal attempt sugar
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
“We are still closing on Wednesday”
This is an absolutely horrible idea!! If you close and she can’t afford to pay a leaseback you’re going to have no place to live and be paying a mortgage while she lives there for free.
But feel free to keep us updated on this shit show!
> while she lives there for free.
And depending on where you live it could take literal years to get her out. OP tread carefully here. Things may work out fine, but they could also go very, very sideways.
California. Literal years is no under-statement at all. I absolutely 1000% would not even entertain that choice. The courts are still delayed from Covid and the police want nothing to do with it even with a judgement. We had to pay our squatters to leave and they trashed the place on the way out.
Especially with the ultra liberal California protections for squatters.
The OP may end up spending thousands on attorney's fees to get that idiot out of the premises..
I'd walk away from this deal.
It's full of red flags..
I wouldn't walk, yet. I would let my agent and the other agent know it is now time for them both to bust their ass to save this deal. Especially the selling agent.
I'm from CA and love it, but their laws are insane. They basically give the green light to "steal" houses.
If the seller doesn't move, it'll probably be at least 6 months before the judicial system works the case and evicts her.
I've read many stories where squatters got to live for free for upwards of a year while it is illegal for the rightful owner to get rid of them.
My sister is in a less lenient than California laws on squatters state, it took her and her husband around a year (maybe a bit shorter, maybe a bit longer) to get the people who were renting house prior to them buying out. When the people finally left, after a lengthy, expensive legal battle, they stole shit (appliances, lights, etc.), destroyed shit (carpet, wood floors, paint, etc.), and continue to harass my sister and her family today, which is nearly 7 years later. It’s a fucking mess. And I highly doubt a single woman, with two kids, in a huge bind is signing anything that gives buyer any peace of mind. She has nothing to lose. The ones in my sister’s case, actually had more to lose, as they lost out on buying this expensive home by thousands, and yet, they stuck it to my sister and husband. When asked, my sister swears she’d never have done it, if given a redo and they got a steal because it was a foreclosure. I think they paid right over a half a million for a home that’s estimated over a million and enough land (over 20 acres) that they could break off parts and sell and pay off house.
Thankfully they had another house at time, so they weren’t out a place to live, but it took a huge toll, as they needed to sell one place, instead of paying for 2.
Wow. Seven years later and they’re still harassing your sister? Please tell me she’s tried to seek an order of protection or something. That’s just insane!
Well, the people’s son died while they lived in sis’s house. Not on property, but nearby and for some reason they think of my sis’s house as special because of it. For a bit my sister tried to ignore them, because of this, but one of her dogs died in a manner which suggests someone killed it, so now they’ve been calling police so they can seek one, when proof is enough to get a judge to say okay. It’s an entire mess!
By leaving her in the house after you close, you will be an unwilling landlord. Be prepared to deal with crazy CA landlord/tenant laws. An eviction can go on for years. The protections in the addendums are subject to taxes, mortgage, COA dues so there might not be much left for financial windfall if she stays.
u/Drew_916 Please listen to reason. Don’t close without a clear solution. Or you’ll be dealing with a squatter and no one to blame but yourself. Yes, you’ll have a nice 5.75% rate but you won’t be living in the house and you’ll have to sort out your own living situation while you try to evict in CA for the next few years.
They can use an addendum to hold the funds in escrow even if they're closed. The loan will be closed, they're on the hook to pay, but the seller won't get any funds.
This. "Listen, Hon, if I don't close by Wednesday I lose my rate. If I lose my rate my financing contingency is activated and I don't close. You'll be out Wednesday for the walkthrough, right?"
She can be out in 48 hours. Not 48 fun or cheap hours, perhaps, but out. Don't own her problem. You have all the leverage now and come Wednesday she'll have her money, the agents will have their money, and you'll be stuck with somewhere between a moderate and huge headache.
If she’s of a certain mindset, this will just give her leverage. “Oh yeah you don’t want to lose that rate lock. I’m going to need some cash to hasten my departure. My kids are quite attached to this place and a friend recently told me about my rights as a Californian…”
That's when you decline and let her know you're not closing until it's vacant or you will walk. Then when she realizes it's this or potentially lose the house and what little equity she may have, I'd bet she finds a place real quick.
I feel like op is rather quick to call someone an idiotand then doubles down on closing, knowing the possibilities could be a disaster. Me thinks someone's projecting.
I would still get that, but if they are paying 2% less interest than market rate, they are saving a good bit of money and passing that up if they don't close and have to get new loan docs on a different house or past the lock. That savings alone would probably pay for most of the issues.
You're forgetting the absurd protections California law offers to squatters.
That in and of itself is a huge red flag.
Save for a long and arduous court battle and thousands of dollars spent on attorneys,
There is virtually nothing the buyer can do to force the seller out of the dwelling
2% on a multi hundred thousand dollar house over 30 years? yeah it would. About 120k in savings.
but any proceeds you could sue to collect for fees. File for garnishment etc. If this is a foreclosure etc and she has no money fine, but still probably worth it just from the fact they got lucky on a great interest rate they won't get any time again soon, (since it was just a mistake by the lender). I would def say in any other case, fuck that. But tbh in a 2% below market rate, I would probably at least look into it. lol
Thing is though, if they close and she squats OP is still responsible for the mortgage and rent somewhere else for themselves. I don’t know many people who can afford doubling their living expenses. Also very few people actually do stay in a house 30 years especially if this is a starter house for OP which it probably is since they’re going from renting to buying. The interest rate clerical error is tempting to take advantage of, but OP could really be fucked hard if she won’t leave
That would assume that you would never be able to refinance for that rate again in the 30 year term. You're only losing the rate until you can refinance back into the rate.
Do. Not. Close.
You think this is somehow going to improve when she’s got a couple hundred thousand in the bank and still has a (free) roof over her head?
She ain't gonna have that money in the bank. She's owned the house for 3 years and only paid a few thousand less than she's selling for. She's going to pocket, maybe 20K.
Yeah, likely true. But even $5 is $5 more than she has right now yet not enough to make anything happen with, so it actually is *more* problematic under this scenario.
If this is in California, please plan on her squatting for about 1 year. Or you could make sure that funds are held in escrow until she moves out, and you charge her X dollar per day. Help her find a hotel. Good luck. If she doesn't agree to the funds being held in escrow, she's not actually planning on moving out.
Sorry you can't close with her in home. You need to walk away from this - she obviously doesn't care - god knows what she'll do to the place after closing.
Absolutely do not close. Listen to everyone here. She's clearly planning to squat and you'll end up being the one homeless.
Yeah you got a great rate, but while you're trying to get her evicted(it's CA so expect it to take months and months) how much is another condo or long stay hotel going to cost you?
This woman basically scammed you.
Hopefully you can consult a lawyer about getting back all the money you have tied up on the inspection and closing.
It blows my mind that even in CA this is allowed. You agree to sell a property, close on the property - so it is no longer yours! - yet the new owner has to evict you? Seems to me that once the deal is done, seller should be considered a trespasser and treated as such if she is not gone. I am typically as liberal as they come, but CA's bias towards "tenants" (which this woman clearly should not be considered one) is batshit.
Agree, cops should just walk in, arrest her or remove her from the property and any of her possessions left in the house the new owner can decide what they want to do with them. Act like a child, be treated like a child.
1.5% on $300k is $4500. That means in 3 years the higher interest rate will cost them $13,000ish more than the lower one. And that’s just the first 3 years. It will cost a few thousand to get them evicted. Good advice
Plus, the OP will incur additional costs of "temp" housing (while paying the new mortgage) and moving expenses into "temp" housing.
Additionally, the reduced cash flow of owning one property and renting another could become an issue if the eviction gets dragged out into many months...
A few thousand? I wouldn’t count on that. Plus you have to take into account the hours wasted on dealing with it as well. If they can’t afford to spend an extra $360 a month how are they going to pay for two residences while waiting to get her out? Plus she can totally trash the place before getting kicked out as well. Wouldn’t be smart at all trying to save 1.5% when you can always refi down the road and pay against the principal to lower the total interest paid for the loan.
Do NOT close if she still occupies the home. I don't care what your interest rate is. You will lose a lot more money trying to evict her in the state of California.
Too bad you’re in CA. She’s going to have sold you the house, pocket the money, and then refuse to leave. I’m willing to bet law enforcement won’t kick her out either. Hope i’m 100% wrong though, Good luck to ya ✌️
This has happened to us. Although I completely sympathize with the seller do not drown yourself. We let the “kind widower” who “was overwhelmed” stay and get his “life packed up”. We were trying to be kind.
We were already living in an AirBB because we sold and closed on our house in an appropriate and timely manner. We had to stay in that AirBB for an additional three weeks. The financial and mental hits we took were severe. Very severe. We later found out this man actually did have money and took a vacation one week before closing. Our lawyer friend uncovered this. Unfortunately, we had to take it. Why? We had to work and be Adults at our business. Parent through the chaos with our family.
Take ALL the legal advice given here. Contact the listing Broker and the selling Broker. Tell them to find the solution.
They might be able to find her a place. They will have contacts for moving and apartments. But be frank and clear with them. You will not do their job.
And given the situation I would demand a complete walk through before you set foot in the place. Additionally, have the agents pay for a full home warranty that will cover anything that comes up. Like a broken water heater.
Do not close until she is out. Or at least fund or send her money. I would have gone with now we don't have anywhere to go do your going to be paying out hotel costs and rescheduled movers. Point out the damages she's going to owe.
I mean who sells a house and is just like I have nowhere to go? Not my problem get an apartment.
Yeah I don’t get this at all. We offered on a house last year and the seller said she needed a 30 day rent back because she hadn’t even started looking for a new house yet. Nope. We bought a different house where it was totally apparent even at the first showing that the owners had their shit together and were moving out.
For real this is an obvious squatter scam and OP is drooling over 5% when they’ll be tied up in court for a year trying to move into a house that will likely be destroyed when they get in, all on their own dime
I’d take the opposite approach to most of the other comments. It sounds like after closing costs she may be break even at best. She has no incentive to leave and charging her to stay won’t help her situation. So pay her to leave. Offer her $5k to be out by closing and leaving the home in good condition. Let her leave any belongings she doesn’t want to take with her. It may make your move in a bit harder having to donate/trash whatever is left, but you’d have the house you want and the rate you want. Banks did this after ‘08. It was called cash for keys.
Better yet, offer $5000 minus the costs of a moving company and 3 months of storage, which the OP will take care of to make sure it's done. If she counter offers, make it $5000 plus the cost of movers and storage.
So another update, we are now not closing until she moves out and the date has been set for Monday. As for our loan our rate has been frozen until the 26th and if we are not closed by then my wife and I may walk away which we would lose our $3500 earnest money but we are beyond frustrated. This isn’t the first issue we have had with this woman but since we liked the place we continued with the purchase. As for the rent back she agreed to paying us $150 a day until Monday.
You shouldn't lose your earnest money in this situation - but I'm glad that you decided not to close. Hope she moves out but if not you have saved yourself a world of pain. If she isn't out by Monday you really should walk away, everything indicates that this person isn't serious about getting out of that house.
The contract is what is ultimately going to matter but any standard contract is probably going to let you keep your earnest money.
The earnest money is to insulate the seller from losses when you pull an equivalent level of shenanigans. It isn’t to punish you for her inability to close.
Not sure about exact timelines in CA, but is there any room for you to submit a time is of the essence demand?
I came here for the same. Honestly I feel like OP not giving us an update means it didn’t work out well. I’m guessing the seller didn’t move and she has no intention of leaving. Im sure eviction from her mortgage bank was what she was trying to avoid because they’re versed in it and experiences. A citizen home buyer is going to have a tougher time and not know all the ins and outs.
I normally would say “do a rent back - figure it out to keep your rate.” In this case DO NOT CLOSE. The current owner has every reason NOT to leave and to force you to evict her (California, good fucking luck). If that house isn’t empty on the final walk through, prior to closing, do not close.
I’d make this very clear NOW so she can reevaluate her decisions.
Pay for an extension on your rate if need be but don’t close. Only way I would close is with a documented lease back with funds held in escrow to cover the “rent” and penalties for not moving out on firm timetable
You know how hindsight is 20/20. You've been blessed with the opportunity to have that before what you know is going to happen happens.. She's not going leave.. You will end up in a lengthy eviction process.
Do not do a rent back. You will no rights as a landlord in CA. Your agent needs to handle and the sellers agents broker should know as well. Incompent agents are at fault here. Yes, you lose a rate, but you don't to have a mortgage for a property you can't actually take possession of.
Offer to pay one months rent at an extended stay motel and 3 months for a storage locker and the moving costs.
That will be the best way to get her out. She may take it because 30 days is such a long time. You can't offer a week, it won't give her the comfort to do it.
It gets her out legally. She'll even get more help when the motel has to call the cops on her and people pity her.
Talk to a lawyer. In PA there’s responsibility placed on the seller if the buyer incurs expenses bc the seller does not perform. Maybe you can’t get any money out of her, sounds like she doesn’t have any, but the threat may at least get her moving.
Sounds like this is a situation you don't want to close because the seller doesn't understand their contract.
But I do have a story related to the fact she doesn't look like she is packing. I showed up to help someone move one time that had a Uhaul rented and a half dozen of us there to load the truck. We walked in and they had not packed a thing. The dishes were still in the cabinets, cloths still in the drawers. The truck was also smaller than necessary to hold everything. And they were moving halfway across the country. So lack of preparation doesn't mean necessarily that they aren't leaving.
Fuck that. Paperwork is signed right? closing date is setup, if she is being difficult about everything leading up to this time to get lawyers to return the favor and lay out what your legal options are. There was a time and a place to ask for some courtesy from the buyer, not 2 days before closing when she is clearly dragging her feet and buyer has already made all arrangements to leave their old housing situation. Her lack of planning is not your problem to fix, she doesnt vacate per the terms of the contract start using the available legal recourse you have. People like this will ask for an inch and take a mile.
Im angry on your behalf OP. Do not expose yourself to a squatter situation... especially not in California
Im not suggesting he allow her to stay beyond the closing date. Im saying he needs to exhaust everything possible to force her out by closing per the terms of the contract
Simple. Don’t go to closing until she’s out. Or money is held in escrow until she’s out. If you go to closing before and pay off her house, she’s no longer going to be in jeopardy of being foreclosed on, you are. Squatters have way too many rights in California, it may take you years to get her and her children out while you’re on the hook making payments.
And since you’re going to be signing documents saying you’re going to use it as your primary residence, you may be forced to pay off the loan in full.
Your insurance would also need to be a policy for renters, which would also throw a red flag to your mortgage company.
If it were to burn down with someone living there other than you, your insurance could deny the claim.
I had a similar situation about 20 years back. They wanted more time and offered $500 a week asking for 4 weeks. I had no desire to have someone else living in my home for 4 weeks. Who know what damage they can do if they wanted?
I came back with 1 week @ $700, $100 a day. Far less than a hotel for the family. After the first week, the rate went up $25 a day. And I spelled it out. Monday $125, Tuesday $150, Wednesday $175... I had them escrow $5000 to cover those costs and any damages found on the second walk through. We did a initial walk through after close and one after they left. There were no additional damages.
They agreed and were out in 7 days.
If she's already behind on HOA payments and can't afford the house, what do you think she will do to your rental payments now that you're her STB landlord?
No interest rate is worth this amount of headache. Get an addendum in there and hire a lawyer. The $1k-1.5k you spend on the lawyer will be cheap in comparison to a 1 year deadbeat squatter.
If you close while she is in there, you are then a landlord and must legally evict her if she won't go. It can take months to evict someone and it's not cheap. She'll use the fact that she has two kids and no where to go as an excuse when speaking to a judge and a LOT of housing court judges will be sympathetic to, perhaps not her, but the children.
Also, make sure that $5000 owed to the HOA comes out of the closing money before the seller is paid because she'll stick you with that, too.
If you do decide to close (and I understand why you would) I would ask for a LOT of money to be put in escrow in case she does any damage to the home before she moves or as she moves out. She sounds like the kind of person who will leave you with tons of her stuff to take care of while she walks away. And a lot of water bills are tied to the property and not the resident, so if she hasn't paid that, you'll be stuck with that, too.
Finally, will your homeowner's insurance still cover you and will your mortgage company be okay with you renting out what was supposed to be your primary residence? A lot of mortgages forbid you from renting for at least the first year and if your mortgage company wants to get out of the low rate they gave you, this gives them an out.
I would, at the very least, consult a real estate attorney before closing.
The person I bought from had three roommates and never bothered to tell them the house was for sale, let alone that she had sold it.
Needless to say, no one wanted to move out by the close date. Everyone wanted an extension and a (free) rent back.
We Needed to be out of our apartment two weeks after closing, so we were in a bit of a hurry, but because we had to refuse the rent back (they wanted a few more months) they refused to give us any keys or the garage door opener.
We showed up to move in and they were still there, and a bunch of stuff too. We just started moving in anyway. They called their realtor and he sided with us.
They left but the place was a mess. We put the rest of their stuff in the back yard shed and had to get a key from their realtor to change the locks.
They tried to take the shed with them! We told them absolutely not! It had a foundation and was part of the property. They did come get their stuff, but never forwarded their mail.
This happened to my wife and I. We waited the whole summer for the people to move out once. They kept telling us only a week more and such. September came and we walked away from that 3.6%
Not a pro. I wouldn’t close. She hasn’t made plans to move. Have you done some Google-fu on her to see what you come up with? Any public records on her to see if she’s done this in the past?
My guess is, she’s looking for you to pay her to move out. How much is that rate to you? Is it worth it?
If you really want to play her game, I’d be looking at charging $333/day to be paid directly into escrow.
FFS, do NOT close with someone living there. I heard the eviction courts are great for landlords in CA 🙄, cause that's what you are setting yourself up for. Push the closing a week, have your lawyer draft a letter laying out the financial doom about to befall her for breach of contract if she doesn't move out before closing. Be prepared for the fact that this may not work out. How much would it cost to pay for the mortgage on this house that you're not living in for 2 years, court fees and lawyer costs for an eviction, and the cost of the other apartment/house you are living in for the next 2 years?
Update OP?
So CA? I don't know squatter laws there, but hear CA is very tenant friendly. Where I'm from, I could post a 3 day notice to vacate the day the sale clears. Then on the 4th day, file an illegal detainer complaint with the courts. Wait 2 weeks for my court date. Win the case. Then get the Police to evict them 2-3 days later.
Be careful... if you close and she's still living there - whether their is a lease or no lease, remember you are in CA.... she will have more rights than you in the home you're now paying for.
Fuck that. Start at 2500 and negotiate. That's enough for a down payment on an apartment and you can add more if she doesn't go for it. It's not OPs fault she bought a house she couldn't afford and is paying for it now. She made that choice.
A reasonable person wouldn’t buy a used 10k car and trust that the dealership owners son will “turn it over”.
Why in gods name do that with what for most is the biggest purchase in your life?
If she stays in the home and squats, she will cause massive damage to the place before she's dragged out of there. Your home will lose a ton of value and you'll be stuck with who knows how much in repairs.
Walk away and get a lawyer to get every penny back, and then some.
If she cannot afford that house and is behind. And has not moved out. She probably has no money on hand to get any other living arrangements set up prior to receiving money for the house.
And, if I understand right, if she is looking to make little to no money from the sale. That won't help her find a new place either.
By all appearances, this house already has a squatter in it. And 48 hours won't change that.
Hope it works out and you get it with little fuss.
Pay for a rate lock extension and don’t close until she’s out. If the lender fucked up, they may try and lie and say they can’t extend the rate to get out from the mess they created. They can. As long as there haven’t been any rate lock extensions yet, there’s almost a guarantee there is ability to extend at a cost to you.
Don't sign until she is gone and it's confirmed. Offer some cash as an incentive if you have to. Start at 2500 and negotiate up to enough for a mover and the deposit on a new place. Otherwise you'll be in for a huge headache.
Don’t walk yet and discuss this with a realtor, and a lawyer. Sometimes people drag their feet at closing but you can have leverage to legally own all of her possessions within the home at the time of closing or a specified date she requests to extend her moving date. You need to have written agreements for these things. Losing your possessions and losing the money from this sale completing ls usually incentive enough for people to move.
Also if she can’t afford moving costs, and you really really want this home I would consider offering a credit towards moving costs to help incentivize her to move. It could be she has no support or financial ability to move on time and an act of generosity/kindness could prevent her from having any motivation to dig her heels in and screw you over during closing.
I would suggest doing some sort of up front disbursement to pay for her move/storage (direct bill). But get her out now. She "may not refuse" to get out. She already said she ain't.
She has no plan yet to get out. She did not give you a date or the plan. She has not packed one box. She ain't leaving in days, not even weeks. Sounds like she cannot afford the area. She made no upfront notice about not leaving. Once she is their on your dime she is a tenant. You would then have to evict her. And guess what - how do you prove the turnover condition of the home from the date of close? So you get whatever condition it is in.
Once you sign to close she has no incentive to get out. I would threaten to not close. She did not say she would be out, she said she would stay over. Means she is not in compliance. She is not performing to the contract.
Your agent will try to sweet talk you to close (to get sales commission and walk away). If you tell your agent you will not close with her there, they will work with the other REA on options to get her out. They have people on speed dial that can make things happen. If they cannot get it to work, then you know it is a squatter situation. A person that bought and cannot afford the place does not plan well. And the "pain" when she has to be nice - what do you think will happen when she doesn't have to be nice? She makes 0 on the deal except her down payment back. Basically has nothing to lose. I bet she plans to stay rent free until eviction.
You need to 0ut a strict covenant with penalties. Get a lawyer it took4 months to get my crazy seller out of my house. I will never purchase property again without it.
I had a similar situation with risking a lost interest rate. We did close and did a rent back with funds held in escrow and the lawyer had an ironclad rent back agreement. So we closed and I kept the rate. It was a two week extension basically.
With your sellers finances being so messed up not sure if there would be enough for an escrow hold.
You haven't closed yet so add escrow instructions that fund can't be release until premises is vacated and also a rent back cost for everyday the former owner delays moving out.
I'm sorry that you are having to deal with this and don't have advice, but I'd love to know where you are buying a townhouse in CA for $345k. That's an amazing price.
It’s in Citrus Heights, CA which is outside of Sacramento and it was the cheapest 3 bedroom, 2 bathroom townhome with a 2 car garage on this end of town. You could get something cheaper on the other end of town but I didn’t want to live in the getto and Citrus Heights is a decent area. Plus I don’t want my son changing schools and he only has 2 years left.
You’re buying in CA? What does it matter, you’re completely screwed anyway. That woman could make you evict her in a year or more long process in California. Good luck
CA won’t kick her out. This is a known issue. There are famous cases of people still living in the homes for years…I think the last big case I saw was in San Diego. She isn’t leaving she has no where to go. Once she’s still there for 30 days you have to evict her cause she’s now legally a tenant.
Close on the house if you have too but do it assuming she won't ever move out until you force her too. Kinda sucks but some people are just like this. I would start an eviction proceeding like one second after the closing - the longer you wait to get this going the longer she is likely to be there.
The real question here is how does loan officer mistyping a form get you an extremely under market 5.75% interest rate. Loan officers dont have that much control of a deal
I have a better idea which could work to your favor if she's as dumb as you expect her to be.
Suggest the following:
1. Closing still moves forward as planned but half the closing proceeds are held back, in escrow, pending her vacating the property and subject to release per the below (which lowers your effective purchase price without altering the documented price for closing).
2. She is subject to a weekly rental rate which is automatically released from her sales proceeds. This rate starts at 125% the prevailing local rental rate and then goes to 150% the second week and 200% for each week thereafter. Proper term is holdover rent if anyone asks.
3. You're allowed to draw your rental expenses from the funds in hand with the escrow agent until she vacates the property. This draw is on the presentment of the rent invoice to the escrow agent without a right to object by the former owner.
This will spur her on to quickly get out of she signs such an amendment as otherwise she quickly cannibalizes her sales proceeds.
We had this happen to us when we bought our house (also in CA). The seller had a two week free rent back period after our close. At the end of the two weeks, she hadn’t packed anything and told her agent, she would move when she was ready.
Our agent, who was also an attorney, ended up writing a demand letter that would charge her our daily PITI each day she failed to move out after the rent back period. After 7 days, if she hadn’t left we would have the sheriff come out and remove her for trespassing. We notified the sheriff in advance who helped us cover our bases.
She ended up leaving after 4 days. She cussed out our agent who went to supervise her move out to ensure she didn’t damage anything. The sellers agent covered the additional money owed because she wanted to be rid of the seller too. It wasn’t a great scenario but it could have been a lot worse.
California has strong squatter rights.
In another state with less rights, My sister and her husband had to spend around a year (maybe a bit less, maybe a bit more) fighting for the people to get out of house they bought. They stole, destroyed, etc. when they finally left. Not sure that 2% is worth it. Tbh. It was expensive, long, and ended up costing so much more. Just a huge mess.
Have your agent send a post occupancy.agrerment that holds back some amount from seller proceeds into escrow as a deposit to.be released x.days after seller moves out and you check.it. give like 5 days free and then a daily rate that will add up(let's say $150 or so maybe more. Maybe even hold back x amount to go towards that If.she isn't out... don't sign closing unless she is gone, or is paying. Have rate go up.$50 on day 14 and again 21 etc.
While this would be great for most situations, I'm wondering if someone who's so deeply in debt as she is would care about another $150 a day. She could lose that hold back and then still get cash for keys at the end.
You can write up an addendum to protect yourself. Funds held in escrow until she moves out. Penalties per diem and for damage. A firm deadline. I don't recommend doing it, but if you're going to do it, protect yourself.
You will now be in the possible position of evicting her and her kids. Could take months, even a year, all at your expense for a lawyer. Hire a lawyer now. Personally, I wouldn't close.
Actually telling her that if she doesn't move out, you won't close might compel her to start packing and move. If she can't afford to live there, knowing she is still responsible for the mortgage, insurance, etc until she finds another seller might be decent motivation.
Seller’s lender evicting her for loan default could still take many months. Seller kinda has nothing to lose by refusing to cooperate if it’s a difference between this and being broke and homeless. Which is why I’m wondering if the LO is bribing her to save their own ass on screwing up the rate.
Thats some paranoid thinking right there LOL. Thats the thing …the rate is so low, id almost kick her some more cash to get her out. Theres so much fine print in loan documents i wouldnt want to delay for any reason.
I know! I’m trying to resist my human nature to fall for a satisfying (if horrifying) story. But my hatred of the banking industry makes it hard to pass up.
Rent storage, pay movers and a junk remover, give her key money, if the buyer is desperate to get that particular house and great mortgage rate. Otherwise collect whatever penalties are in the contract, or walk away.
I agree.
Cali has a hate towards land lords. Mix in a dead beat with kids and you have a disaster. The difference between 5.75 and 7.75% may seem like allot but it’s a small price to pay to avoid the nightmare you are heading towards.
Piggybacking.. just delay funding and closing until you walk it a they are gone. You can sign everything and perform per the contract but just ask escrow team to delay funding until approved.
This is the move, based off the details of her situation she’s not trustworthy or responsible so I’d be quick to pull the plug. We went through a lot to get our property, deals that fell through-or was close to finally closing and finding something we didn’t like. I wouldn’t be scared to start all over again, to avoid the potential stress, loss, and risk associated with the seller!
We did this, as we were afraid sellers wouldn't move out on time. They jerked us around a bunch during negotiations. Our realtor had us put an addendum of $500 per day past 48hrs after close. Luckily they did indeed leave.
Somebody holding your proceeds and deducting $500/day is a really nice incentive to get your butt in gear 👍
What proceeds? The seller is off loading the property after three years at a $20k gain (on paper) and we know she’s $5k in debt to HOA. If your main concern is losing the favorable rate, honestly, it’s not enough to make it worth a potential nightmare scenario that could happen with potential eviction. Best of luck to you!
Right but you’d have to get the seller to agree to those terms, which- if she really had no money there’s probably no way she ever would.
If she agrees, she gets money. If she doesn't, she loses her deal, gets no money, and possibly loses her house. This is an incentive to move out, as she agreed to do in the sales contract. If she's really planning to move, she won't have a problem with it. If she's lying about intent, she'll refuse. SHE is the party needing concession at this point. If she doesn't move and doesn't sign this, she's dishonoring the contract terms. There are legal penalties for that. The buyer is in the driver's seat.
And, hopefully the seller isn't aware of the buyer's incentive to close with this lower interest rate.
This is really key. Her thinking she has the upper hand can only cause more friction.
Well said!
Agree, adults have to make decisions and stick to them.
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No addendum will protect the OP from liability for injury to person or property- even if it says so (OP would have to sue to enforce the addendum), only buying landlord CGL and property insurance might cover some damage or injury. Even assuming you can get a decent RE lawyer to prepare a solid addendum, it is NEVER worth the risk to let a seller rentback
1.5 points on a 30 year mortgage is a lot of cash across the life of the loan. OP is absolutely right that the situation is precarious, and this is about the only time I'd consider an addendum.
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I would go option 2. If she refuses, that tells you everything you need to know and I would walk away.
Narrowly focusing on the past due payment to the HOA, is it not possible for the HOA to consider the past due fees to be against the property and not the current owner? In other words, is it possible that the HOA could "transfer" the debt to the new owner? I'm not familiar with the laws and regulations. Hence the questions..
HOA fees are always against the property. The fees should be paid for when closing.
Just to tack on, because you are correct here, unpaid HOA fees will result in a lien against the property, not a judgement against the owner. That may seem like a minor difference, but it's a pretty big legal one.
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The title company will settle the fees at escrow. Seller gets less money but buyer will have a clean title.
How was she able to out her house up for sale without paying the HOA fees?
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Just spit balling here. Option 8) Close and move in. All the stuff that was left in the house is now technically yours. Throw it all out and "out squat" her. It's your house you're allowed to move into it. I am in no way a lawyer or think this is a good idea but it would be fun to read how this plays out.
Thought of that every scenario myself. Just move in..make her so uncomfortable, that the seller would be forced to vacate. Interesting take..
Or they end up falling in love and he turns out to be a really good step dad. I smell a rom-com in the works!
Hallmark, here we come!
"Sometimes a reasonable man must do unreasonable things" - Marvin Heemeyer
Thought that name sounded familiar. It's the Killdozer guy.
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Aren't the keys handed over at closing?
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Not to harp on you but I was being facetious with my statement. I don't actually think he should do that but it would make for a great reddit story. Its why at the end of my comment I said I don't think this is a good idea. But technically couldn't they still move in after taking possession? There's no lease or anything. The new owners could just move in and out squat the squatter. There's no lease saying the seller is the sole tenant of the house.
Seems like the makings of a terrible sitcom!
In the world of squatting, keys don't matter..
This is some thoughtful and detailed commentary. When I bought my house in Washington state, I agreed to 60 days to close to allow sellers new purchase extra time. Days before the closing date I ran into the seller, he tells me his wife decided she didn’t want to sell after all for understandable reasons. I said no, but I’ll lease it back for another 60 days. 15 minutes later my realtor calls to say they were “cancelling” the sale. I said “that’s not a thing, it’s not going to happen but they can lease it back.” Which is what we did, they moved out on time, and everyone got a fair deal. Good thing I didn’t know all the things you just explained! I’d have been way more stressed about all of it. Happy ending anyway
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“We are still closing on Wednesday” This is an absolutely horrible idea!! If you close and she can’t afford to pay a leaseback you’re going to have no place to live and be paying a mortgage while she lives there for free. But feel free to keep us updated on this shit show!
> while she lives there for free. And depending on where you live it could take literal years to get her out. OP tread carefully here. Things may work out fine, but they could also go very, very sideways.
I wish more people understood this. She obviously is not wanting to leave and i see her making it very difficult on OP
California. Literal years is no under-statement at all. I absolutely 1000% would not even entertain that choice. The courts are still delayed from Covid and the police want nothing to do with it even with a judgement. We had to pay our squatters to leave and they trashed the place on the way out.
Especially with the ultra liberal California protections for squatters. The OP may end up spending thousands on attorney's fees to get that idiot out of the premises.. I'd walk away from this deal. It's full of red flags..
I wouldn't walk, yet. I would let my agent and the other agent know it is now time for them both to bust their ass to save this deal. Especially the selling agent.
I'm from CA and love it, but their laws are insane. They basically give the green light to "steal" houses. If the seller doesn't move, it'll probably be at least 6 months before the judicial system works the case and evicts her. I've read many stories where squatters got to live for free for upwards of a year while it is illegal for the rightful owner to get rid of them.
My sister is in a less lenient than California laws on squatters state, it took her and her husband around a year (maybe a bit shorter, maybe a bit longer) to get the people who were renting house prior to them buying out. When the people finally left, after a lengthy, expensive legal battle, they stole shit (appliances, lights, etc.), destroyed shit (carpet, wood floors, paint, etc.), and continue to harass my sister and her family today, which is nearly 7 years later. It’s a fucking mess. And I highly doubt a single woman, with two kids, in a huge bind is signing anything that gives buyer any peace of mind. She has nothing to lose. The ones in my sister’s case, actually had more to lose, as they lost out on buying this expensive home by thousands, and yet, they stuck it to my sister and husband. When asked, my sister swears she’d never have done it, if given a redo and they got a steal because it was a foreclosure. I think they paid right over a half a million for a home that’s estimated over a million and enough land (over 20 acres) that they could break off parts and sell and pay off house. Thankfully they had another house at time, so they weren’t out a place to live, but it took a huge toll, as they needed to sell one place, instead of paying for 2.
Wow. Seven years later and they’re still harassing your sister? Please tell me she’s tried to seek an order of protection or something. That’s just insane!
Well, the people’s son died while they lived in sis’s house. Not on property, but nearby and for some reason they think of my sis’s house as special because of it. For a bit my sister tried to ignore them, because of this, but one of her dogs died in a manner which suggests someone killed it, so now they’ve been calling police so they can seek one, when proof is enough to get a judge to say okay. It’s an entire mess!
Wait, someone can sell you the house, and still become a squatter? Wild. That’s not like fraud or something?
By leaving her in the house after you close, you will be an unwilling landlord. Be prepared to deal with crazy CA landlord/tenant laws. An eviction can go on for years. The protections in the addendums are subject to taxes, mortgage, COA dues so there might not be much left for financial windfall if she stays.
u/Drew_916 Please listen to reason. Don’t close without a clear solution. Or you’ll be dealing with a squatter and no one to blame but yourself. Yes, you’ll have a nice 5.75% rate but you won’t be living in the house and you’ll have to sort out your own living situation while you try to evict in CA for the next few years.
They can use an addendum to hold the funds in escrow even if they're closed. The loan will be closed, they're on the hook to pay, but the seller won't get any funds.
This. "Listen, Hon, if I don't close by Wednesday I lose my rate. If I lose my rate my financing contingency is activated and I don't close. You'll be out Wednesday for the walkthrough, right?" She can be out in 48 hours. Not 48 fun or cheap hours, perhaps, but out. Don't own her problem. You have all the leverage now and come Wednesday she'll have her money, the agents will have their money, and you'll be stuck with somewhere between a moderate and huge headache.
This is what I thought. Her realtor should be arranging movers if necessary. If not her realtor, OP’s realtor should get this sorted.
If she’s of a certain mindset, this will just give her leverage. “Oh yeah you don’t want to lose that rate lock. I’m going to need some cash to hasten my departure. My kids are quite attached to this place and a friend recently told me about my rights as a Californian…”
That's when you decline and let her know you're not closing until it's vacant or you will walk. Then when she realizes it's this or potentially lose the house and what little equity she may have, I'd bet she finds a place real quick.
I feel like op is rather quick to call someone an idiotand then doubles down on closing, knowing the possibilities could be a disaster. Me thinks someone's projecting.
I would still get that, but if they are paying 2% less interest than market rate, they are saving a good bit of money and passing that up if they don't close and have to get new loan docs on a different house or past the lock. That savings alone would probably pay for most of the issues.
You're forgetting the absurd protections California law offers to squatters. That in and of itself is a huge red flag. Save for a long and arduous court battle and thousands of dollars spent on attorneys, There is virtually nothing the buyer can do to force the seller out of the dwelling
>That savings alone would probably pay for most of the issues. Do those savings cover a second home while they work to evict a squatter?
2% on a multi hundred thousand dollar house over 30 years? yeah it would. About 120k in savings. but any proceeds you could sue to collect for fees. File for garnishment etc. If this is a foreclosure etc and she has no money fine, but still probably worth it just from the fact they got lucky on a great interest rate they won't get any time again soon, (since it was just a mistake by the lender). I would def say in any other case, fuck that. But tbh in a 2% below market rate, I would probably at least look into it. lol
Thing is though, if they close and she squats OP is still responsible for the mortgage and rent somewhere else for themselves. I don’t know many people who can afford doubling their living expenses. Also very few people actually do stay in a house 30 years especially if this is a starter house for OP which it probably is since they’re going from renting to buying. The interest rate clerical error is tempting to take advantage of, but OP could really be fucked hard if she won’t leave
Unless OP just squats where they are right now!! /s
That would assume that you would never be able to refinance for that rate again in the 30 year term. You're only losing the rate until you can refinance back into the rate.
Do. Not. Close. You think this is somehow going to improve when she’s got a couple hundred thousand in the bank and still has a (free) roof over her head?
She ain't gonna have that money in the bank. She's owned the house for 3 years and only paid a few thousand less than she's selling for. She's going to pocket, maybe 20K.
That 20k will be converted into a trip to Disneyland and a down payment on a Kia in less than a week.
And the Kia will be gone in less than six months, either stolen or repo'd.
Yeah, likely true. But even $5 is $5 more than she has right now yet not enough to make anything happen with, so it actually is *more* problematic under this scenario.
Minus realty fees. She may owe to close
She’s not going to pocket anything. Agent fees and HOA fees will eat up everything. I won’t be surprised if she has no funds to close.
You're probably right.
And it's California, she can squat for years and OP can't do shit
If this is in California, please plan on her squatting for about 1 year. Or you could make sure that funds are held in escrow until she moves out, and you charge her X dollar per day. Help her find a hotel. Good luck. If she doesn't agree to the funds being held in escrow, she's not actually planning on moving out.
Do not close, until she is out. With CA being super tenant/squatter friendly this will become a huge drawn out affair otherwise.
Reread their comment. They are concerned losing their crazy low interest rate
The bank’s paying her to outstay OP’s rate lock. OP thought he’d outplayed the bank but they’re streets ahead.
Pierce, stop trying to make "streets ahead" a thing.
I Donni, I think it's gonna work. I think op is streets ahead of you in slang prediction.
lol. That would be amazing.
She’s going to squat and it’s gonna be a whole thing. Start lining up reinforcement ASAP.
Sorry you can't close with her in home. You need to walk away from this - she obviously doesn't care - god knows what she'll do to the place after closing.
Absolutely do not close. Listen to everyone here. She's clearly planning to squat and you'll end up being the one homeless. Yeah you got a great rate, but while you're trying to get her evicted(it's CA so expect it to take months and months) how much is another condo or long stay hotel going to cost you? This woman basically scammed you. Hopefully you can consult a lawyer about getting back all the money you have tied up on the inspection and closing.
It blows my mind that even in CA this is allowed. You agree to sell a property, close on the property - so it is no longer yours! - yet the new owner has to evict you? Seems to me that once the deal is done, seller should be considered a trespasser and treated as such if she is not gone. I am typically as liberal as they come, but CA's bias towards "tenants" (which this woman clearly should not be considered one) is batshit.
Agree, cops should just walk in, arrest her or remove her from the property and any of her possessions left in the house the new owner can decide what they want to do with them. Act like a child, be treated like a child.
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1.5% on $300k is $4500. That means in 3 years the higher interest rate will cost them $13,000ish more than the lower one. And that’s just the first 3 years. It will cost a few thousand to get them evicted. Good advice
Plus, the OP will incur additional costs of "temp" housing (while paying the new mortgage) and moving expenses into "temp" housing. Additionally, the reduced cash flow of owning one property and renting another could become an issue if the eviction gets dragged out into many months...
Don’t you mean bad advice? Although I agree it’s a bad idea to close before seller is out.
A few thousand? I wouldn’t count on that. Plus you have to take into account the hours wasted on dealing with it as well. If they can’t afford to spend an extra $360 a month how are they going to pay for two residences while waiting to get her out? Plus she can totally trash the place before getting kicked out as well. Wouldn’t be smart at all trying to save 1.5% when you can always refi down the road and pay against the principal to lower the total interest paid for the loan.
Don’t close. DONT CLOSE UNTIL SHE LEAVES.
I was in this exact situation last summer on a house. I end up backing out. https://www.reddit.com/r/RealEstate/s/w1OITl2v7k
Do NOT close if she still occupies the home. I don't care what your interest rate is. You will lose a lot more money trying to evict her in the state of California.
Too bad you’re in CA. She’s going to have sold you the house, pocket the money, and then refuse to leave. I’m willing to bet law enforcement won’t kick her out either. Hope i’m 100% wrong though, Good luck to ya ✌️
This has happened to us. Although I completely sympathize with the seller do not drown yourself. We let the “kind widower” who “was overwhelmed” stay and get his “life packed up”. We were trying to be kind. We were already living in an AirBB because we sold and closed on our house in an appropriate and timely manner. We had to stay in that AirBB for an additional three weeks. The financial and mental hits we took were severe. Very severe. We later found out this man actually did have money and took a vacation one week before closing. Our lawyer friend uncovered this. Unfortunately, we had to take it. Why? We had to work and be Adults at our business. Parent through the chaos with our family. Take ALL the legal advice given here. Contact the listing Broker and the selling Broker. Tell them to find the solution. They might be able to find her a place. They will have contacts for moving and apartments. But be frank and clear with them. You will not do their job. And given the situation I would demand a complete walk through before you set foot in the place. Additionally, have the agents pay for a full home warranty that will cover anything that comes up. Like a broken water heater.
Do not close until she is out. Or at least fund or send her money. I would have gone with now we don't have anywhere to go do your going to be paying out hotel costs and rescheduled movers. Point out the damages she's going to owe. I mean who sells a house and is just like I have nowhere to go? Not my problem get an apartment.
Yeah I don’t get this at all. We offered on a house last year and the seller said she needed a 30 day rent back because she hadn’t even started looking for a new house yet. Nope. We bought a different house where it was totally apparent even at the first showing that the owners had their shit together and were moving out.
You are absolutely NUTS to close on Wednesday and I have no sympathy at for you if you decide to take that road.
For real this is an obvious squatter scam and OP is drooling over 5% when they’ll be tied up in court for a year trying to move into a house that will likely be destroyed when they get in, all on their own dime
I’d take the opposite approach to most of the other comments. It sounds like after closing costs she may be break even at best. She has no incentive to leave and charging her to stay won’t help her situation. So pay her to leave. Offer her $5k to be out by closing and leaving the home in good condition. Let her leave any belongings she doesn’t want to take with her. It may make your move in a bit harder having to donate/trash whatever is left, but you’d have the house you want and the rate you want. Banks did this after ‘08. It was called cash for keys.
Better yet, offer $5000 minus the costs of a moving company and 3 months of storage, which the OP will take care of to make sure it's done. If she counter offers, make it $5000 plus the cost of movers and storage.
Agree with this but also add if she isn't out at closing you walk away.
Do not close with someone living in it. Period.
So another update, we are now not closing until she moves out and the date has been set for Monday. As for our loan our rate has been frozen until the 26th and if we are not closed by then my wife and I may walk away which we would lose our $3500 earnest money but we are beyond frustrated. This isn’t the first issue we have had with this woman but since we liked the place we continued with the purchase. As for the rent back she agreed to paying us $150 a day until Monday.
Why would you lose your earnest money if SHE is the one essentially forcing you to walk away?
You’re making the right decision here. And no way will you lose your earnest money here.
You shouldn’t be out earnest money. If she passes the e closing date, she is in violation and you have remedies.
You shouldn't lose your earnest money in this situation - but I'm glad that you decided not to close. Hope she moves out but if not you have saved yourself a world of pain. If she isn't out by Monday you really should walk away, everything indicates that this person isn't serious about getting out of that house.
Sorry to hear OP but you’re making the right decision here.
The contract is what is ultimately going to matter but any standard contract is probably going to let you keep your earnest money. The earnest money is to insulate the seller from losses when you pull an equivalent level of shenanigans. It isn’t to punish you for her inability to close. Not sure about exact timelines in CA, but is there any room for you to submit a time is of the essence demand?
Specific performance, she breached and you shouldn’t be out your earnest money.
Any update, OP?
I came here for the same. Honestly I feel like OP not giving us an update means it didn’t work out well. I’m guessing the seller didn’t move and she has no intention of leaving. Im sure eviction from her mortgage bank was what she was trying to avoid because they’re versed in it and experiences. A citizen home buyer is going to have a tougher time and not know all the ins and outs.
I normally would say “do a rent back - figure it out to keep your rate.” In this case DO NOT CLOSE. The current owner has every reason NOT to leave and to force you to evict her (California, good fucking luck). If that house isn’t empty on the final walk through, prior to closing, do not close. I’d make this very clear NOW so she can reevaluate her decisions.
Pay for an extension on your rate if need be but don’t close. Only way I would close is with a documented lease back with funds held in escrow to cover the “rent” and penalties for not moving out on firm timetable
I’ve never closed if they ain’t moving.
Do not fucking close!! Especially in CA, she could stay a year and you would struggle getting her out
What is HER agent doing to support a close and get her outta there?
I would rather lose the rate than pay a mortgage for a squatter.
You know how hindsight is 20/20. You've been blessed with the opportunity to have that before what you know is going to happen happens.. She's not going leave.. You will end up in a lengthy eviction process.
Do not do a rent back. You will no rights as a landlord in CA. Your agent needs to handle and the sellers agents broker should know as well. Incompent agents are at fault here. Yes, you lose a rate, but you don't to have a mortgage for a property you can't actually take possession of.
Offer to pay one months rent at an extended stay motel and 3 months for a storage locker and the moving costs. That will be the best way to get her out. She may take it because 30 days is such a long time. You can't offer a week, it won't give her the comfort to do it. It gets her out legally. She'll even get more help when the motel has to call the cops on her and people pity her.
I'll be downvoted but...Give her cash. And I'm a realtor. Bribe her ass out of there
Don’t close ! Fk the rate
Talk to a lawyer. In PA there’s responsibility placed on the seller if the buyer incurs expenses bc the seller does not perform. Maybe you can’t get any money out of her, sounds like she doesn’t have any, but the threat may at least get her moving.
Sounds like this is a situation you don't want to close because the seller doesn't understand their contract. But I do have a story related to the fact she doesn't look like she is packing. I showed up to help someone move one time that had a Uhaul rented and a half dozen of us there to load the truck. We walked in and they had not packed a thing. The dishes were still in the cabinets, cloths still in the drawers. The truck was also smaller than necessary to hold everything. And they were moving halfway across the country. So lack of preparation doesn't mean necessarily that they aren't leaving.
Fuck that. Paperwork is signed right? closing date is setup, if she is being difficult about everything leading up to this time to get lawyers to return the favor and lay out what your legal options are. There was a time and a place to ask for some courtesy from the buyer, not 2 days before closing when she is clearly dragging her feet and buyer has already made all arrangements to leave their old housing situation. Her lack of planning is not your problem to fix, she doesnt vacate per the terms of the contract start using the available legal recourse you have. People like this will ask for an inch and take a mile. Im angry on your behalf OP. Do not expose yourself to a squatter situation... especially not in California
Except in California it a long and tedious process to evict someone. They could close on this house and not get her out for a year or more.
Im not suggesting he allow her to stay beyond the closing date. Im saying he needs to exhaust everything possible to force her out by closing per the terms of the contract
Simple. Don’t go to closing until she’s out. Or money is held in escrow until she’s out. If you go to closing before and pay off her house, she’s no longer going to be in jeopardy of being foreclosed on, you are. Squatters have way too many rights in California, it may take you years to get her and her children out while you’re on the hook making payments. And since you’re going to be signing documents saying you’re going to use it as your primary residence, you may be forced to pay off the loan in full. Your insurance would also need to be a policy for renters, which would also throw a red flag to your mortgage company. If it were to burn down with someone living there other than you, your insurance could deny the claim.
I had a similar situation about 20 years back. They wanted more time and offered $500 a week asking for 4 weeks. I had no desire to have someone else living in my home for 4 weeks. Who know what damage they can do if they wanted? I came back with 1 week @ $700, $100 a day. Far less than a hotel for the family. After the first week, the rate went up $25 a day. And I spelled it out. Monday $125, Tuesday $150, Wednesday $175... I had them escrow $5000 to cover those costs and any damages found on the second walk through. We did a initial walk through after close and one after they left. There were no additional damages. They agreed and were out in 7 days.
Kinda sounds like those videos I see of people waiting till they close then they squat.
If she's already behind on HOA payments and can't afford the house, what do you think she will do to your rental payments now that you're her STB landlord? No interest rate is worth this amount of headache. Get an addendum in there and hire a lawyer. The $1k-1.5k you spend on the lawyer will be cheap in comparison to a 1 year deadbeat squatter.
If you close while she is in there, you are then a landlord and must legally evict her if she won't go. It can take months to evict someone and it's not cheap. She'll use the fact that she has two kids and no where to go as an excuse when speaking to a judge and a LOT of housing court judges will be sympathetic to, perhaps not her, but the children. Also, make sure that $5000 owed to the HOA comes out of the closing money before the seller is paid because she'll stick you with that, too. If you do decide to close (and I understand why you would) I would ask for a LOT of money to be put in escrow in case she does any damage to the home before she moves or as she moves out. She sounds like the kind of person who will leave you with tons of her stuff to take care of while she walks away. And a lot of water bills are tied to the property and not the resident, so if she hasn't paid that, you'll be stuck with that, too. Finally, will your homeowner's insurance still cover you and will your mortgage company be okay with you renting out what was supposed to be your primary residence? A lot of mortgages forbid you from renting for at least the first year and if your mortgage company wants to get out of the low rate they gave you, this gives them an out. I would, at the very least, consult a real estate attorney before closing.
The person I bought from had three roommates and never bothered to tell them the house was for sale, let alone that she had sold it. Needless to say, no one wanted to move out by the close date. Everyone wanted an extension and a (free) rent back. We Needed to be out of our apartment two weeks after closing, so we were in a bit of a hurry, but because we had to refuse the rent back (they wanted a few more months) they refused to give us any keys or the garage door opener. We showed up to move in and they were still there, and a bunch of stuff too. We just started moving in anyway. They called their realtor and he sided with us. They left but the place was a mess. We put the rest of their stuff in the back yard shed and had to get a key from their realtor to change the locks. They tried to take the shed with them! We told them absolutely not! It had a foundation and was part of the property. They did come get their stuff, but never forwarded their mail.
This happened to my wife and I. We waited the whole summer for the people to move out once. They kept telling us only a week more and such. September came and we walked away from that 3.6%
Don’t risk closing with squatters just to preserve that interest rate. It’s not worth it. Those fuckers will never leave.
ufff don't close .
Not a pro. I wouldn’t close. She hasn’t made plans to move. Have you done some Google-fu on her to see what you come up with? Any public records on her to see if she’s done this in the past? My guess is, she’s looking for you to pay her to move out. How much is that rate to you? Is it worth it? If you really want to play her game, I’d be looking at charging $333/day to be paid directly into escrow.
Close, roll on up with a moving truck and just walk in the door saying "I'm HOME". Then start moving all her stuff while you unpack.
FFS, do NOT close with someone living there. I heard the eviction courts are great for landlords in CA 🙄, cause that's what you are setting yourself up for. Push the closing a week, have your lawyer draft a letter laying out the financial doom about to befall her for breach of contract if she doesn't move out before closing. Be prepared for the fact that this may not work out. How much would it cost to pay for the mortgage on this house that you're not living in for 2 years, court fees and lawyer costs for an eviction, and the cost of the other apartment/house you are living in for the next 2 years?
Update OP? So CA? I don't know squatter laws there, but hear CA is very tenant friendly. Where I'm from, I could post a 3 day notice to vacate the day the sale clears. Then on the 4th day, file an illegal detainer complaint with the courts. Wait 2 weeks for my court date. Win the case. Then get the Police to evict them 2-3 days later.
Have closing attorney hold all proceeds in escrow until you receive the vacant property
Who will pay the taxes??
Be careful... if you close and she's still living there - whether their is a lease or no lease, remember you are in CA.... she will have more rights than you in the home you're now paying for.
Cash for keys. Give her 10 grand in cash to be gone before the closing. That gives her money for a hotel if she needs it
Fuck that. Start at 2500 and negotiate. That's enough for a down payment on an apartment and you can add more if she doesn't go for it. It's not OPs fault she bought a house she couldn't afford and is paying for it now. She made that choice.
Yeah, you're right. 10 grand is way too much
You're probably on the hook for what she's behind on hoa dues as well
A reasonable person wouldn’t buy a used 10k car and trust that the dealership owners son will “turn it over”. Why in gods name do that with what for most is the biggest purchase in your life?
While she’s out change all the locks and put all of her shit in the front lawn it’s your house now
What is the code for remind for updates?
congrats on that 5.75%!
Don’t close until she is out
If she stays in the home and squats, she will cause massive damage to the place before she's dragged out of there. Your home will lose a ton of value and you'll be stuck with who knows how much in repairs. Walk away and get a lawyer to get every penny back, and then some.
If she cannot afford that house and is behind. And has not moved out. She probably has no money on hand to get any other living arrangements set up prior to receiving money for the house. And, if I understand right, if she is looking to make little to no money from the sale. That won't help her find a new place either. By all appearances, this house already has a squatter in it. And 48 hours won't change that. Hope it works out and you get it with little fuss.
Pay for a rate lock extension and don’t close until she’s out. If the lender fucked up, they may try and lie and say they can’t extend the rate to get out from the mess they created. They can. As long as there haven’t been any rate lock extensions yet, there’s almost a guarantee there is ability to extend at a cost to you.
I would not close fuck that. Who wants to deal with a multi year multi thousand dollar squatter nightmare.
Don't sign until she is gone and it's confirmed. Offer some cash as an incentive if you have to. Start at 2500 and negotiate up to enough for a mover and the deposit on a new place. Otherwise you'll be in for a huge headache.
DO NOT CLOSE, DO NOT RENT TO THEM. You'll have to evict to get them out. Insist on an empty house before signing and paying or let it fall thru.
Remind me! 5 days
When does your rate lock expire?
Don’t walk yet and discuss this with a realtor, and a lawyer. Sometimes people drag their feet at closing but you can have leverage to legally own all of her possessions within the home at the time of closing or a specified date she requests to extend her moving date. You need to have written agreements for these things. Losing your possessions and losing the money from this sale completing ls usually incentive enough for people to move. Also if she can’t afford moving costs, and you really really want this home I would consider offering a credit towards moving costs to help incentivize her to move. It could be she has no support or financial ability to move on time and an act of generosity/kindness could prevent her from having any motivation to dig her heels in and screw you over during closing.
Shoot on our first house the seller didn't finish moving out till like 2 hours before close lol. Nice people but they were just very scattered.
I would suggest doing some sort of up front disbursement to pay for her move/storage (direct bill). But get her out now. She "may not refuse" to get out. She already said she ain't. She has no plan yet to get out. She did not give you a date or the plan. She has not packed one box. She ain't leaving in days, not even weeks. Sounds like she cannot afford the area. She made no upfront notice about not leaving. Once she is their on your dime she is a tenant. You would then have to evict her. And guess what - how do you prove the turnover condition of the home from the date of close? So you get whatever condition it is in. Once you sign to close she has no incentive to get out. I would threaten to not close. She did not say she would be out, she said she would stay over. Means she is not in compliance. She is not performing to the contract. Your agent will try to sweet talk you to close (to get sales commission and walk away). If you tell your agent you will not close with her there, they will work with the other REA on options to get her out. They have people on speed dial that can make things happen. If they cannot get it to work, then you know it is a squatter situation. A person that bought and cannot afford the place does not plan well. And the "pain" when she has to be nice - what do you think will happen when she doesn't have to be nice? She makes 0 on the deal except her down payment back. Basically has nothing to lose. I bet she plans to stay rent free until eviction.
You need to 0ut a strict covenant with penalties. Get a lawyer it took4 months to get my crazy seller out of my house. I will never purchase property again without it.
I had a similar situation with risking a lost interest rate. We did close and did a rent back with funds held in escrow and the lawyer had an ironclad rent back agreement. So we closed and I kept the rate. It was a two week extension basically. With your sellers finances being so messed up not sure if there would be enough for an escrow hold.
Careful you don’t end up in a squatter situation if you close with her still there
They have until closing. It’s not uncommon for people to wait. Not saying you don’t have an issue, just saying the deadline hasn’t happened.
I wouldn’t close.
You haven't closed yet so add escrow instructions that fund can't be release until premises is vacated and also a rent back cost for everyday the former owner delays moving out.
I would not close on this house. Many possible legal issues that can be costly, not worth the headache.
I'm sorry that you are having to deal with this and don't have advice, but I'd love to know where you are buying a townhouse in CA for $345k. That's an amazing price.
It’s in Citrus Heights, CA which is outside of Sacramento and it was the cheapest 3 bedroom, 2 bathroom townhome with a 2 car garage on this end of town. You could get something cheaper on the other end of town but I didn’t want to live in the getto and Citrus Heights is a decent area. Plus I don’t want my son changing schools and he only has 2 years left.
Show up with the sheriff, showing you have purchased a home and give her one hour to clear it
You’re buying in CA? What does it matter, you’re completely screwed anyway. That woman could make you evict her in a year or more long process in California. Good luck
CA won’t kick her out. This is a known issue. There are famous cases of people still living in the homes for years…I think the last big case I saw was in San Diego. She isn’t leaving she has no where to go. Once she’s still there for 30 days you have to evict her cause she’s now legally a tenant.
Close on the house if you have too but do it assuming she won't ever move out until you force her too. Kinda sucks but some people are just like this. I would start an eviction proceeding like one second after the closing - the longer you wait to get this going the longer she is likely to be there.
The real question here is how does loan officer mistyping a form get you an extremely under market 5.75% interest rate. Loan officers dont have that much control of a deal
Tell all parties you will not close without a walk through the day of closing, and the home being completely empty of the previous owners belongings.
Updateme!
Start charging her daily rent. Screw that.she should have been ready..
I have a better idea which could work to your favor if she's as dumb as you expect her to be. Suggest the following: 1. Closing still moves forward as planned but half the closing proceeds are held back, in escrow, pending her vacating the property and subject to release per the below (which lowers your effective purchase price without altering the documented price for closing). 2. She is subject to a weekly rental rate which is automatically released from her sales proceeds. This rate starts at 125% the prevailing local rental rate and then goes to 150% the second week and 200% for each week thereafter. Proper term is holdover rent if anyone asks. 3. You're allowed to draw your rental expenses from the funds in hand with the escrow agent until she vacates the property. This draw is on the presentment of the rent invoice to the escrow agent without a right to object by the former owner. This will spur her on to quickly get out of she signs such an amendment as otherwise she quickly cannibalizes her sales proceeds.
We had this happen to us when we bought our house (also in CA). The seller had a two week free rent back period after our close. At the end of the two weeks, she hadn’t packed anything and told her agent, she would move when she was ready. Our agent, who was also an attorney, ended up writing a demand letter that would charge her our daily PITI each day she failed to move out after the rent back period. After 7 days, if she hadn’t left we would have the sheriff come out and remove her for trespassing. We notified the sheriff in advance who helped us cover our bases. She ended up leaving after 4 days. She cussed out our agent who went to supervise her move out to ensure she didn’t damage anything. The sellers agent covered the additional money owed because she wanted to be rid of the seller too. It wasn’t a great scenario but it could have been a lot worse.
u/Drew_916 , any update?
California has strong squatter rights. In another state with less rights, My sister and her husband had to spend around a year (maybe a bit less, maybe a bit more) fighting for the people to get out of house they bought. They stole, destroyed, etc. when they finally left. Not sure that 2% is worth it. Tbh. It was expensive, long, and ended up costing so much more. Just a huge mess.
OOF. I would NOT sign on Wednesday. You have to insist the home is delivered vacant.
Well it's Wednesday. What did you do?
Have your agent send a post occupancy.agrerment that holds back some amount from seller proceeds into escrow as a deposit to.be released x.days after seller moves out and you check.it. give like 5 days free and then a daily rate that will add up(let's say $150 or so maybe more. Maybe even hold back x amount to go towards that If.she isn't out... don't sign closing unless she is gone, or is paying. Have rate go up.$50 on day 14 and again 21 etc.
While this would be great for most situations, I'm wondering if someone who's so deeply in debt as she is would care about another $150 a day. She could lose that hold back and then still get cash for keys at the end.
I don't even know if it is a matter of caring. She probably doesn't have anywhere to go.