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Advice on dealing with delayed possession

9 years ago

I'm advising an employee who's buying his first house.

Pertinent details: purchase contract calls for closing within 45 days, possession upon closing, $100/day damages for delayed possession.

Closing was dragging out due to inspection issues, so they signed an amendment that extended closing to 4/21. Seller needed funds from closing to close on a house they're buying, so they also agreed to extend possession to 5/18, with Seller paying my guy a month's mortgage payment.

In the meantime, my guy vacated his rental so realtor has been paying for him+wife+toddler to stay in a hotel through 5/17. Realtor is dual agent for both houses in the chain.

Earlier this week realtor tells my guy that Seller's closing has been delayed, so possession will be delayed, probably a week. Suggests that my guy can stay at her house (!?!?). My guy wants to get into his new house.

My advice to him yesterday was to call the realtor and calmly insist that the Seller vacate by 5/18 as agreed. If she protested, not to let their problem become his problem. The sellers can put their stuff in a moving van and move into a hotel (or the realtor's house) until they close.

His phone call went to voice mail, with no return. He sent a very long text which was not responded to.

Advice?

Comments (11)

  • 9 years ago

    I agree: tell the realtor that she should have the seller stay with her so the buyer can move in. If she thought her initial idea was great, then it shouldn't make any difference who stays with her. And it should be up to her to get this idea sold to the seller. It's not your employee's problem.

  • 9 years ago
    last modified: 9 years ago

    Possession dates are typically part of the contract. Even if the original date was amended it will still be part of the contract. It cannot be extended further if your employee does not sign another amendment in writing doing so. This should no longer be his problem. It's the seller's problem to figure it out now.

    If the agent does not respond within 24 hours, it's time to call the broker.

  • 9 years ago

    He needs to find out what the reason for the latest delay is. Is it out of the control of the seller?

    Either way, the contract should spell out exactly what happens in this situation. Ours does.

  • 9 years ago

    If they have mortgages, will they keep same rates if they delay the closing?

  • 9 years ago

    Rate locks do have an expiration date... good point. Some lenders will charge a fee to extend the agreed upon rate, while others will go with the current, updated rate.

  • 9 years ago
    last modified: 9 years ago

    Closing has already happened (on the first house in the chain). The delay is in the second closing. I don't know the specifics of why it is running late. And apparently there are 4 houses in this chain, the last one of which is empty, so it may be that closing #2 has happened but they're waiting on #3 or something.

    My guy called his agent again yesterday afternoon, and when she didn't respond, he went to the local office and told the person there that he'd been trying unsuccessfully to get ahold of her, so they needed to get her to call him back.

    She called him within a couple minutes of his leaving the office. Apparently she's at her wit's end, as seller #1 refuses to vacate until they can move into house #2. Agent offered house #2 sellers some money to vacate early, but they refused. She suggested my guy send a certified letter to seller #1 telling them they'd be seeking the $100/day damages for delayed possession.

    I told him not to bother with a certified letter, as it wouldn't secure his rights any more than the contract already does. But tell the realtor to deliver that message verbally so that the sellers can make an informed decision.

    After the dust settles, he can send a demand letter to the sellers for the $100/day, and if they don't respond, file a small claims court suit.

    NC: I believe the contract does spell out what happens: the $100/day damages, which would apply unless the parties agree to an amendment. What does your contract say?

  • 9 years ago

    In most states, the closing date is NOT a hard date. Here as long as the delaying party is performing duties in faith to close the deal, they are allowed a 14 day grace period w/o penalty.

  • 9 years ago

    In most states, the closing date is NOT a hard date. Here as long as the
    delaying party is performing duties in faith to close the deal, they
    are allowed a 14 day grace period w/o penalty.

    But this isn't about the closing date, which happened as agreed. It's about the possession date.

  • 9 years ago

    That's why I never close without the sellers having moved and keys being exchanged at the closing table. In MA closing and possession happen at the same time. Here in CA they like to do closing + 3 days, but it is negotiable, and I would never agree as a buyer.

  • 9 years ago
    last modified: 9 years ago

    Oh... I read it incorrectly. IMO, shame on anyone letting a seller stay in their home past the closing date... possession is 9/10ths of the law, as the saying goes.

    I realize it is customary for this to happen in some areas, but I have yet to figure out why people would open themselves up to this type of hassle.

    I don't know what else to tell you., because my personal actions in a situation like this would probably be frowned upon by many.