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We are about to close escrow on a short sale purchase. The loan doc is ready for us to sign. But t

We are about to close escrow on a short sale purchase. The loan doc is ready for us to sign. But the seller said he wouldn't move out until the end of October.  What should we do now?

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September 13 2012 - US
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What does your buyer agent has to say?  What is the listing agent doing about this?  You may need to either postpone the closing or the lender has to evict the sellers.  I would not close with the sellers in the property.
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September 13 2012
Funds are in escrow for the benefit of the original lender, not the seller. And the listing agent is not getting paid by title company until all the good stuff (including handing over the keys) happens.

Where I represent buyers as their attorney at the closings, I make it a point to have escrow release conditioned upon handing over the keys. Otherwise no one is getting paid, including the listing agent.

Hire a lawyer to represent you at the closing if you feel there's going to be a problem occupying the house after closing.

Raheel Shahzad, Attorney, CPA, Real Estate Agent
Chicago, IL
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September 13 2012
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ah, the wonderful games of short sales.  When someone is selling short, they don't have a financial incentive.  At this point, they don't particularly gain by selling and going to foreclosure may be something they'd prefer to do. 

Are you working with a buyer's agent?   Have your agent put some pressure on the listing agent.

Did your contract say you were willing to rent back?    (We (as consumers) always mention in our purchase offers that we must have a walk through of the vacant property before closing.)

Eviction isn't a pretty process.  It is expensive, time consuming and often ends up with a trashed house.   I'd avoid that at all costs.

Should "rent back" be the only option, I'd have some of the proceeds held in escrow until they are out and the home is delivered in satisfactory condition.  As the lender wants their money, perhaps that will put a fire under their feet.   I'd also charge considerable rent (say $500/day).









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September 13 2012
Review the contract, and what is the reason the seller would not move out?
He could not find a place to move to? Is he getting the relocation incentive $ from the lender? Did he sign the lender approval agreement?  Your agent should talk to the listing agent to reason with the seller. If not the short sale approval is cancelled as well as the purchase contract. You may get your EMD back but you don't get to buy the house.  Best is work out a reasonable solution with the seller if you still want to buy the house. Good luck,
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September 13 2012
Depends on what the contract indicates, and your states laws about taking possession of the property. Your settlement attorney should be well versed on this type of issue, or at least aware of laws regarding eviction/taking possession.  I would get on the phone with them tonight, or contact their office in the am and discuss.  

If you back out of the contract now my guess is that you will be held liable for "failing to perform" in accordance with the contract.  Some states have laws indicating that once the property transfer is recorded it's yours and anything in the dwelling becomes yours, and anyone still living in the dwelling can be removed.  But all of this is supposition, you need to speak with your attorney first thing in the morning.
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September 13 2012
Read the contract (and the short sale authorization from the lender). Your agent should be able to explain these to you. They will clearly state when you get occupancy. If the seller does not comply with the contract terms then he is risking the short sale approval being cancelled. Your agent should be able to advise you on your best course of action. If you get no satisfaction, call his broker. Or consult an attorney.
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September 13 2012

What does your contract state? If they don't vacate the premises as agreed on your contract, you may be able to evict them. If you're working with a Realtor or Attorney, I'd suggest you contact them.

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September 13 2012
 
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