When a seller lists their home, there’s always the worry that they won’t be able to find a new home in the time they must be out of their old one. A post-closing occupancy agreement might just work your seller who’s worried about the timeline, or a buyer who’s looking to make a stand-out offer.
What is a post-closing occupancy agreement?
A post-closing occupancy agreement is when a seller retains occupancy of the property for up to 60 days after closing occurs. Per Jim Smith, Broker and Owner of Golden Real Estate, Inc., the tactic isn’t often used, but he and other brokers consider it an ace in the hole if navigated correctly. Read more about his approach here in his column from May 11, 2017. And although Jim used a post-closing occupancy agreement as a tactic at a time when market inventory was low, it’s a real estate practice that’s generally good to know and keep in mind, because it can work in other situations.
Not all buyers are good candidates for the post-closing occupancy agreement, and it’s important for you to understand your clients’ current living arrangements prior to suggesting it. If they’re living at an extended-stay hotel, Airbnb, month-to-month apartment, etc., and can lengthen their stay or find another budget-friendly, temporary living arrangement, the post-closing occupancy agreement could be something to consider.
Similarly, there’s a note of caution on the seller’s side. Again, not all buyers can accommodate a post-closing occupancy agreement. If you list it as an upfront requirement, you run the risk of decreasing the number of offers you receive.
Have you successfully navigated a sale that included a post-closing occupancy agreement? Let us know down in the comments!