Occupancy...To Give or not to Give

In a seller's market (where inventory is low and buyers are plentiful), one of the major items involved in a transaction is occupancy. For those new to home buying, you may not realize what this means to you.

When you write your purchase agreement, one of the major items to decide on is when you want the keys to your new home. At closing would make the most sense, but it is not always that easy. So let's talk about occupancy issues so you know the risks and rewards when writing up your offer.

What to give and why...

You go to your private showing and there are 10 cars lining the street waiting to go in. So much for privacy. This house is hot and you know that there is going to be a bidding war. Well, the good news is that it is not always about the most money to some sellers.

Often times, sellers are moving to a newly purchased home too. They may need to close on the current home first in order to buy their next home. They may need occupancy after closing to finish their new purchase and move into it. Have your agent find out what is important to the seller. Do they need a week, a month or more? Knowing this information can be a big advantage in winning the home!

The next question is do you charge the sellers rent while living in the home? Security deposit? You absolutely can. You can charge as much as you want (if they agree to it) or nothing at all. The choice is yours. Are you in a financial situation that you need the rent money or can you waive it? This could also make or break the offer. The decision is always yours!

Things to consider...

The biggest scenario is that the seller(s) need time to find a home and move. Sounds simple enough, but how much time do you give them in your new home? Well, the first thing you will want to check is what will the insurance company insure before it becomes a "rental property". In most cases, after 60 days, it is considered rental property and you will have to get a different insurance policy. You may need to check with your city or township as well to make sure that your taxes will not change too!

So you give 59 days occupancy. What if the sellers do not find a new home in that time? Unfortunately, you will have to start the eviction process starting with a 30-day notice. But don't think after 30 days, you can remove their items. Sometimes the court process can take almost 2 months. Now, this is a very rare case and most sellers move out as planned. But you need to the consequences of giving occupancy.

Don't forget to have the property properly insured during this time. You need to realize that you are now a landlord until they move out. Anything goes wrong with your home while they live in it is your responsibility.

Also know the risk of not offering any occupancy at all or very little could result in your offer not being chosen. Ultimately, it is the seller's choice on what they need out of the sale.

For more tips and blogs, please find me at www.facebook.com/soldbyjillb.


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