What if a Seller Refuses to Leave the Home After Closing?

When should a seller leave a home after closing?

Most home purchase agreements have a standard clause similar to this example: “If the seller fails to vacate the property as agreed, the seller shall be responsible for all additional expenses, including attorney’s fees, incurred by the buyer in order to take possession as a result of the seller’s failure to vacate.”

As Donaldson noted above, typically, a buyer and their agent will conduct the final walkthrough on closing day or the day before to ensure that the house is in the condition that the seller promised. You should receive the keys right at closing. If the seller does not vacate the property by closing or leaves the house damaged, then the money held in escrow can normally be given to the buyer as a penalty or to repair the home.

However, with a holdover home seller who is discovered living in the home after closing without an arranged agreement, the funds have already been distributed, and the buyer has lost their financial leverage. In this rare situation, the buyer may need to engage law enforcement or an attorney to determine what steps you can take to force them out and demand possession.

Reasons a seller might refuse to leave after closing

Understanding why a seller might linger after closing can help you approach the situation with empathy or the correct legal game plan. Here are some reasons a seller might refuse to leave their home after the deal has been finalized:

• Financial difficulties: The seller might not have a new place to move into due to financial problems.
• Misunderstanding the closing date: Sometimes, sellers misinterpret the timeline or forget the exact move-out or buyer occupancy date.
• Emotional attachment: Sellers who have lived in their home for years may struggle with the emotional aspect of leaving.
• Disputes over property condition or terms: If there’s a disagreement about the state of the home or the details of the sale, a seller might delay leaving.
• Legal or logistical issues: Legal complications or issues with their new home might prevent sellers from moving on time.

What are my options if a seller refuses to leave the home?

When you encounter a holdover seller, it’s essential to approach the situation with a clear head and a strategy. Here are your options:

• Communication: Often, a direct but polite conversation can resolve the issue. Understand the seller’s reason for staying and see if you can find a mutual agreement.
• Legal notice: If talking doesn’t work, sending a formal notice might. This indicates you’re serious about taking legal action if necessary.
• Mediation: A neutral third party can help both sides reach an agreement without going to court.
• Legal action: As a last resort, you may need to initiate legal proceedings to gain possession of your property.

Donaldson says, depending on the severity and urgency of the situation, you could reach out to law enforcement. “You could call the police or the sheriff and say, ‘Listen, we had a closing, they took my money, they have the sale proceeds, they no longer have a right to occupy these premises, get these people out there. There is no landlord-tenant relationship. There never was because of the contract relationship — we purchased the house from them.’”

Communication tips when dealing with a holdover seller

Here are some tips to consider when negotiating with a holdover home seller:

• Try to understand their position: Identify the reason behind their refusal to leave. This understanding can help guide your decisions.
• Offer assistance: If the seller is facing logistical issues, offering help might expedite their departure. This will depend on the situation and the help needed.
• Compromise: Sometimes, allowing the seller a few extra days to move out can resolve the issue without further conflict or costly legal proceedings.
• Work within the law: If direct communication and mediation efforts fail, you can prepare for legal action. However, be certain you work with local law enforcement and/or your attorney. Don’t do anything that might step outside the law and jeopardize your own credibility or rights.

Legal consequences of staying in a house after closing

While most situations can be resolved without going to court, if you end up needing to turn to the legal system, you may be entitled to monetary damages.

“What we consider damages are the cost that one party incurs in order to get what they want or to fix a problem,” Donaldson explains. “Any costs I may have incurred associated with that seller refusing to leave the property are my legal damages, and that would be the amount that I would claim if I brought [legal] action against the seller.”

Donaldson provides this example: “Okay, seller. Listen, not only didn’t you leave the property that we purchased, but I had nowhere to go. I had to rent a hotel, I had to rent another property to live in. Now you owe the money that I had to spend to live someplace else because you refused to leave despite the [purchase] contract.”

Can I evict a holdover home seller?

Donaldson says “evict” is not necessarily the correct term to use in a holdover home seller situation.

“This is not really an eviction process because the seller doesn’t have a legal right to be there after the closing date,” he clarifies, “I don’t think the court would even be needed. I think it’s just a matter of turning over the contract to sell to a sheriff or whoever handles evictions in the area, in that jurisdiction.”

Most states have unlawful detainer laws designed to remove people who remain in possession of a property when they have no legal right to be there. These laws can fast-track the process of vacating a home.

Do I need an attorney if a seller refuses to leave?

If other resolution attempts, such as communication, legal notices, and mediation, are unsuccessful, hiring an attorney may be required in situations involving an unreasonable holdover seller who refuses to leave. An attorney can:

• Provide legal advice tailored to your situation.
• Help draft and send a formal notice to the seller.
• Represent you in mediation or court if the issue escalates.
• Ensure all actions taken are legally sound, minimizing the risk of future disputes.

How can I avoid a holdover home seller?

Prevention is always better than cure, especially when it comes to avoiding a holdover home seller. Here are steps you can take to minimize the risk:

• Clear communication: Discuss move-out plans with the seller before closing to ensure everyone is on the same page.
• Written agreement: Include specific terms in the contract about the move-out date and penalties for non-compliance.
• Final walkthrough: Conduct a final walkthrough close to the closing date to confirm the seller is prepared to vacate.
• Escrow holdback: Consider holding back a portion of the sale proceeds in escrow until the seller fully vacates the property.

What if the seller asks to stay after closing?

If the seller requests to stay after closing, and the timing works for your moving plans, negotiate terms that protect your interests:

• Temporary lease agreement: Create a short-term rent-back agreement that includes a definitive move-out date and lease payments. This can be arranged even on a daily basis.
• Security deposit: Require a security deposit to cover potential damages or if the seller stays beyond the agreed period.
• Legal documentation: Ensure all agreements are documented legally to avoid misunderstandings.

What if the seller leaves, but the home is damaged?

Discovering damage after the seller leaves can be disheartening. Here’s what to do:

• Document the damage: Take photos and detailed notes of all damages.
• Contact the seller: Try to resolve the issue amicably, possibly through compensation for the damages.
• Use escrow funds: If the closing hasn’t happened yet and you held back funds in escrow, use them to cover repair costs.
• Legal action: For significant damage, consult with your real estate attorney about possible legal recourse.

If a seller refuses to leave after closing, pause and breathe

Donaldson says most home purchases go as expected. “[Buyers] have a better chance of winning the lottery than the seller not leaving the property after closing.”

If, despite these odds, you find yourself faced with a holdover home seller, pause and take a breath. Start with prudent communication, which might include reaching out to local law enforcement or an experienced attorney. Be patient but diligent. The law and reason are on your side.

»Haven’t purchased yet? If you’re reading this post because you are just planning for a worst-case scenario and you haven’t yet purchased a home, HomeLight can connect you with top agents in your area who have a track record of smoothly handling post-closing challenges. These professionals can negotiate effectively on your behalf, and ensure your homebuying experience is as seamless as possible.

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