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Offer on house and we countered

Posted by ms.b.smitty (My Page) on
Mon, Jul 27, 09 at 20:14

Hi, everyone gives such great advice I thought I would put forth my situation and question.

My house has been on the market 4 weeks and we got an offer. We are listing at 189k (with realtor) and we were offered 177k (plus they asked for a lot of items not included in the original sale). I thought this was a decent offer, but my dh and realtor did not. So, we countered at 188k and basically agreed to the majority of their requests. One we did not agree to was the time of possession. The buyers asked for possession at closing and our realtor said we should not do that, as she has been burned before by buyers who flake out or what have you and she said it is very aggravating and costly if the buyers suddenly pull out of the deal (meaning my dh and I would have acquired moving expenses and possibly a lease or be stuck without somewhere to live because we would be waiting to close on next house, etc). When DH and I bought the house 5 years ago, we had possession upon closing. Anyway, we countered to give them possession 5 days after closing (realtors suggestion). The buyers claim to have financing and plan to put 20% down, so I don't know if that reduces the risk.

Mostly I am interested in what is the norm? It seems to me that both parties can't be perfectly happy and some risk is involved. Obviously it is too late to do anything about this (unless they counter us back), but I would really like to hear your opinions on how much time is between a closing and possession for a possible next time? (and I really would like to know for future, as I will be shocked if the buyers accept offer and not too surprised if they simply walk away).

And, just so you know, this is the first house dh and I have ever tried to sell, so I feel very unprepared to deal with things like the offer and relied on our realtor for most of those decisions.


Follow-Up Postings:

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RE: Offer on house and we countered

I would expect to move in at closing. I never heard of an extended possession. If I were a buyer, I'd never go for that.

Hopefully, experienced Realtor's will respond.


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RE: Offer on house and we countered

Thanks for the response. I felt similarly. I basically am pretty sure we (dh, realtor and I) killed any potential to negotiate this deal). Mostly I just feel so uneducated on the entire negotiating procedure. I questioned my realtor when she pushed for that, but she basically acted like she never allows possession upon closing. I would have accepted the buyers request, even with the risk involved, simply because that is how my dh and I purchased the house 5 years ago.


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RE: Offer on house and we countered

If you look through this thread you will see multiple discussions of that very issue. People have differing views. It's usually a pretty spirited debate.


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RE: Offer on house and we countered

As mostone says -- it's a spirited debate. There are many regional differences. Some parts of the country it's normal and perfectly acceptable to remain past closing, other areas not so much. We've sold 6 homes, the first and second we gave possession at closing. #3 we gave possession 30 days past closing, number 4 we gave possession 60 days past closing. Number 5 we gave possession at closing. Number 6 we gave possession the day after closing. The instances where we stayed past closing, it was stated in the listing details that we needed that time. It was agreed to in the contract and we paid "rent" equal to PITI for the days we stayed past closing. We also put a substantial amount of damage deposit money into escrow in the event that the property was damaged between closing and possession.

Most important is to do what ever both parties feel comfortable doing. There is always some risk associated with buying or selling a home. Personally in this era of home selling, I wouldn't move out at closing....but that's just me personally. I've heard too many stories lately of buyers flaking out and not closing....but then I've also heard stories of sellers who stay past closing being difficult.


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RE: Offer on house and we countered

In my area, I think it's normal for the sellers to stay 2-3 days past closing. When we first moved here my agent told me that was the norm to protect the sellers. My question was: "what protects the buyers?"

On the house we ended up buying, the seller was very flexible and actually fixed several things more than what we asked for, so although our contract stated possession at closing, he asked for another day and we weren't in a huge hurry to move so we just gave it to him.


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RE: Offer on house and we countered

Personally, I would never allow some strangers to live in MY house after it was closed upon, unless there was a lease agreement signed.
Just ask for a hefty amount of an Earnest Money Deposit, and negotiate a little longer than normal closing time. That way, if they do flake out and not close, you get compensated for your troubles. Also, ask for the buyers commitment letter from the lender after about 30 days from signing of contract. By this time, all contingencies would be gone, and you would know for certain that if they backed out, the deposit goes to you.


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RE: Offer on house and we countered

Here, the sellers nearly always give possession a few days after closing/funding;
it helps to keep the buyers from re-negotiating terms at the closing table, & there's always a "Seller's Temporary Residential Lease" attached to the contract.

I've heard of buyers showing up at the closing table (seller's furniture sitting in a truck on the parking lot) & claim they're short of money, can't close unless sellers give them $________(fill in the blank).


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RE: Offer on house and we countered

sylviatexas,
You said that the sellers nearly always give possession a few days after closing.
Should not you say that the BUYERS almost always give posession to the SELLERS a few days after closing? After all, it is the Buyers property after recordation, so the Sellers would not be able to give permission to the buyers.

So, if it is negotiated that the sellers are staying in the home for a few days after close, and then the buyers still pull the trick of renegotiating at the closing table, how does this scenario protect the sellers any more or less than if they were supposed to move out on the closing day?
If I had buyers pull a trick like that, I would help the sellers sue them for Specific Performance.


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RE: Offer on house and we countered

My daughter faced this when she bought her first house in May. The seller wanted to stay in the house 2 days after closing just in case.

What they agreeded to was a $500. refundable deposit and a walk thru on the end of the second day. Everything looked fine and my daughter started to move in the next day.


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RE: Offer on house and we countered

Around here, the buyer always takes possession at closing. After all, the house at this point legally belongs to the buyer. I have heard of sellers staying in the house for a period of time and paying rent, but I can't imagine letting the sellers stay in the house for 30 days or more at no cost to them.


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RE: Offer on house and we countered

You said that the sellers nearly always give possession a few days after closing.
Should not you say that the BUYERS almost always give posession to the SELLERS a few days after closing? After all, it is the Buyers property after recordation, so the Sellers would not be able to give permission to the buyers.

Yes, the buyer owns the house at close of escrow, but the seller still has possession (occupancy of house) if indeed they remain after close of escrow. It is common in many areas to vacate at noon day of close, or close + 2-3 days. Whatever the time, it is agreed by both buyer and seller in the contract. Find out from your agent what is common and expected in your area.


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RE: Offer on house and we countered

I'd walk away from any house where I did not receive possession at closing... regardless of custom.


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RE: Offer on house and we countered

This custom stuff is interesting and I want to hear more! I'm going to post a question about regional customs. ~Elle


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RE: Offer on house and we countered

I'm not sure what it is like in your area, but around here we've had appraisal and financing issues that have seriously delayed or even canceled closings. The tighter financing and the new appraisal rules have put a whole new spin on things. Our neighbors completely moved out of their house for the new buyers and had their closing explode at the last minute.

It never hurts to ask for things that will make your life a bit easier and give you some piece of mind.


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RE: Offer on house and we countered

xamsx,
My thoughts exactly.
I would still like someone explain to me how staying in your old home for a few days after close protects you, the seller.


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RE: Offer on house and we countered

Once we were moving out of state and moved everything out the day before closing. One of us was to stay behind and clean up and then attend closing the next morning before heading to the new state.

1 hour before the moving truck left, we found out closing was delayed due to the lender missing a deadline with paperwork. The new closing date was not even known at that time. Also the homeowner's insurance policy was cancelled as-of the day of closing(sellers - always wait until after closing to request the cancellation - I learned the very hard way).

What stress this all caused. We went to to insurance agent's office moments after getting the phone call and gave a check and explained everything they assured all was fine. The next morning they call and say they can't insure us because the home is vacant. We are in the new state at this point and had to call around and buy expensive insurance for homes that are vacant.

Closing finally occurred 2 weeks later. I swear that stress took a year or so off my lifespan.


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RE: Offer on house and we countered

I would still like someone explain to me how staying in your old home for a few days after close protects you, the seller.

It has been explained in several of the postings here. Moving out early gives the buyer leverage and if it doesn't close for any reason the seller is in the lurch. A seller vacating a 6000sq ft house can't move out in 3 hours.
If you are an agent, I can't believe you haven't had delayed closings.


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RE: Offer on house and we countered

Hmm by staying a couple of days you haven't paid movers to move you until you have the money in the bank (the sellers). Turned off utilities, etc. It is just a matter of protecting so you're not out any money. I don't think it protects the seller as far as the house being sold if that is what you think it is referring to.


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RE: Offer on house and we countered

ncrealestateguy-"Personally, I would never allow some strangers to live in MY house after it was closed upon, unless there was a lease agreement signed.
Just ask for a hefty amount of an Earnest Money Deposit, and negotiate a little longer than normal closing time. That way, if they do flake out and not close, you get compensated for your troubles."

I don't know about having the buyer sign a lease agreement because that opens up another can of worms, but a hefty Earnest Money deposit sounds good to me.


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RE: Offer on house and we countered

"...unless there was a lease agreement signed."

The last thing you want is an actual lease since that invokes landlord-tenant law.


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RE: Offer on house and we countered

I really don't see the problem with staying one or two days. I've been on both sides, I think some people make things too difficult when it needn't be.
to each his own way...

"So, if it is negotiated that the sellers are staying in the home for a few days after close, and then the buyers still pull the trick of renegotiating at the closing table, how does this scenario protect the sellers any more or less than if they were supposed to move out on the closing day?
If I had buyers pull a trick like that, I would help the sellers sue them for Specific Performance."

Obviously the seller has more power if they are not packed and moved out of the house, it would be much easier to cancel the sale if the buyer doesn't perform and all parties know it.
How much work do you think it is to sue the buyers for specific performance and if they have no money what good does it do you? Isn't it easier to keep more power on your side to begin with?

and right, never cancel insurance until after closing, the insurance company can backdate the cancellation.


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RE: Offer on house and we countered

"I'd walk away from any house where I did not receive possession at closing... regardless of custom."

Well, then, you'd have a more limited number of homes from which to choose in an area in which the sellers typically don't vacate until after closing, & if you insisted on possession at closing, you might find sellers less flexible on other considerations.
maybe you could just look at new homes?

"would never allow some strangers to live in MY house after it was closed upon, unless there was a lease agreement signed."

agreed.
Any Realtor would make sure a Seller's Temporary Lease was attached to the contract.

"The last thing you want is an actual lease since that invokes landlord-tenant law."

don't know about other states, but in Texas, both Buyer (now Landlord) & Seller (now Tenant) who have a Seller's or Buyer's Temporary Lease in place are in much better positions than those who do not;
the lease protects *both parties* by spelling out what each one's rights & obligations are;

for instance, the Landlord cannot come to the house at 2 AM to change the locks & measure for drapes.
The Tenant cannot change out cabinet hardware or ceiling fans.

It also spells out the procedures for eviction.

As someone mentioned above, a good deposit is good insurance.


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RE: Offer on house and we countered

"don't know about other states, but in Texas, both Buyer (now Landlord) & Seller (now Tenant) who have a Seller's or Buyer's Temporary Lease in place are in much better positions than those who do not;
the lease protects *both parties* by spelling out what each one's rights & obligations are;"

In many places you can have a tenant at sufferance (the holding over party) removed as a trespasser after they violate the agreement.

If they have a lease then the lease terms AND any overriding landlord-tenant law must be followed.

Get ready for 'notice to quit,' filing an eviction proceeding, showing you have the power and reason to evict, then waiting for the sheriff to serve the eviction, then perform the actual eviction after any statutory delays required, etc.

You can have all the contract you want, but creating an actual lease invokes many other conditions in most jurisdictions.


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RE: Offer on house and we countered

I am not an attorney, & nothing that I say or write here is intended to be taken as legal advice, but I do have extensive experience in writing real estate contracts & getting transactions closed & sellers moved out & buyers moved in.

If a buyer or seller is absolutely petrified that the other party to the contract is going to find a sneaky way to take advantage & cause problems, then the best advice I could give that person is to *consult an attorney*, *not* to ask me for advice & not to take legalistic-sounding advice from an internet forum.

As a Realtor, I am bound to use the forms promulgated by the Texas Real Estate Commission.

The Buyer's (& the Seller's) Temporary Lease is the addendum I must use if the seller is to occupy the house after funding, or if the buyer is to occupy it prior to closing.

These addenda were written by people who are expert in Texas real estate law.
Never have I had a problem with the principals to a transaction moving out & moving in as agreed.

Most people buying & selling simply want to work out the terms of possession in a way that will work for both parties, they want to know how to schedule their movers, & they want it in writing.


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RE: Offer on house and we countered

I'd walk away from any house where I did not receive possession at closing... regardless of custom.

Intransigence is the hallmark of a bad negotiator.


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RE: Offer on house and we countered

sylviatexas Well, then, you'd have a more limited number of homes from which to choose in an area in which the sellers typically don't vacate until after closing, & if you insisted on possession at closing, you might find sellers less flexible on other considerations.
maybe you could just look at new homes?

Orrrr since most of the country is still a buyer's market the seller would have to work with me.

graywings Intransigence is the hallmark of a bad negotiator.

Not when my attitude is "take it or leave it".

I know a lot of people are hung up on their area's customs. As a buyer there is absolutely nothing in it for me to allow the seller to stay one second after I own the house. We've all read the horror stories about having to evict selling-homeowners that just won't budge. We've read the horror stories about not walking through an empty house and the damage that was covered by strategically placed pictures or furnishings. We've read the stories about sellers that stayed in the house after close, hurt themselves and sue the buyers - who now actually owned the house. And I'm sure if we dug deep enough there would be stories regarding house fires too.

While I can understand the seller wanting to stay until after the closing takes place, I can't understand any buyer going along with it, and for just some of the aforementioned reasons.


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RE: Offer on house and we countered

Amen, brother xamsx. Your post is right on.


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RE: Offer on house and we countered

And for every horror story you hear about, there are hundreds of stories where everything went just fine and didn't get reported on the internet. Anyone can insist on anything in a negotiation, but the more willing you are to consider alternatives, the better the overall negotiation.

Moving away from the purchase of a home and talking generally, I've seen people with what I call the fear mindset, people who internally are alway calculating risk and seeking to eliminate it from their lives. And the internet provides all the fodder necessary to come to believe that something bad is right around the corner. I'm not a pollyanna, but this isn't my view of the world.


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RE: Offer on house and we countered

"The Buyer's (& the Seller's) Temporary Lease is the addendum I must use if the seller is to occupy the house after funding, or if the buyer is to occupy it prior to closing."

You "must use"? By law?

I would strike the thing instantly to avoid ANY confusion and involvement of landlord-tenant law.

You can have all the attorneys write a contract you want, if they have not been involved in what happens when the contract goes bad (buyer does not move out on time) the agreement is dangerous.

I do not know the details of Texas landlord-tenant law, but in most places there are laws that supersede anything in rental contracts.
You cannot alter these laws by any agreement between parties.

Things like eviction procedures and times.


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RE: Offer on house and we countered

ms smitty -- how about an update. Did the buyer accept your counter, or did they counter back. Give us an update when you get a chance!


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RE: Offer on house and we countered

Yes, as I said above, I must use the TREC (Texas Real Estate Commission) promulgated forms.

& for the hundredth or so time, *it's not the same as a standard lease*.

It's used when a principal to a residential sale is occupying the property *for a very short time* while another principal owns it, while a standard lease agreement is used when anybody at all leases a property from the owner for a period of several months or more, & the terms are different.

For example, the Temporary Lease calls for the entire amount of rent to be paid in advance, while a standard lease calls for rents to be paid monthly.

If a seller were to lease the property for a term of several months after closing, I would use the standard residential lease.

"I would strike the thing instantly to avoid ANY confusion and involvement of landlord-tenant law."

Then you would run the risk of having the person occupying your house filing a homestead claim & involving you in lengthy & costly litigation.

As I said, the Temporary Leases protect both principals.

As I also said, if you are a principal in a sale & you are uneasy about the other principal occupying the property, *consult a real estate attorney in your own state*.


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RE: Offer on house and we countered

"You "must use"? By law?"
brickeyee, there are state mandatory RE commission approved contracts, written by RE attorneys to be used by RE agents. These contracts for sale or lease or as addendums to sales contracts have to be used and usually are iron clad proven in court contracts, not something willy nilly drawn up by your run of the mill attorney.
These contracts have been written, to protect the public from ambiguities normally associated with contracts in states that do not have this type protection.
Just an FYI how some states have better laws in protecting the consumer than others.


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RE: Offer on house and we countered

Sylvia,
Please post a link to the temp. lease.


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RE: Seller'sTemporary Lease

here ya go.

Here is a link that might be useful: Seller'sTemporary Lease Texas


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RE: Buyer's Temporary Residential Lease Texas

& here's the flip side.

Here is a link that might be useful: Buyer's Temporary Residential Lease Texas


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RE: Offer on house and we countered

My attorney is laughing at those two lease agreements.

There are enough holes in them to drive a truck through, starting with "prevailing party" used in the legal fees and expense clause and the lack of a severability clause clause.

The comment was "amateur hour."

If a suite occurs and one party prevails on 2 points and another on one point, who is entitled to reimbursement?

Severabilty allows the other portions of the agreement to remain in effect if some portion is found invalid.

And those are just the two I remember form a brief discussion.

Never use a form contract unless you are forced by law, especially without an attorney review before signing the thing.

You have to assume a default will occur (not that everyone will 'play by the rules') and what steps will be required to remedy the default.


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RE: Offer on house and we countered

yeah, right, you got an attorney (a real attorney or your imaginary wife/attorney) who had nothing better to do on a Saturday than to read 2 documents promulgated by the Texas Real Estate Commission & to respond with a "laugh" & "amateur hour".

As I said, if you have doubts or fears, consult a real estate attorney in your own state.

Do not rely on stuff you read on the internet, & do not allow someone with an ax to grind to scare the bejeebers out of you.


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RE: Offer on house and we countered

It is my wife who works in the general counsels office at HUD downtown.

She is rather far from "imaginary" and did get a good laugh from those contracts.

I am so glad I have never done any RE sales or purchases in a place like Texas.

Mandated contracts my a**.


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RE: Offer on house and we countered

"Mandated contracts my a**."

A HUD attorney? Think RESPA; enough said!


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