seller wants to remain in property : ezLandlordForms

R

Rodney B

started a topic over 12 years ago

Being a 1st time LL, Not sure how to proceed w/ this situation. Closing on my 1st invetment propety is end of May2012. Sellers asked if I would rent the property to them for a mth or two until their property is ready. Not sure of the pros and cons on this situation. Any and all advice is welcomed.

B

Bob R

said over 12 years ago

Rodney, that’s an excellent question. Before I give you my thoughts on this, I would like to hear why “you” think it’s a good/bad idea. My reason for doing it this way is you’re new in the business and I’m hoping that I can help you with your thought process for future decisions. There are times when you need to make split decisions. I’m not affiliated with EZLandlord. My purpose here is to offer sound considerations based on my 40+ Yrs as an investor. I’ll be gone for a few hrs today, so I may not get back to you until this evening (PT).

R

Rodney B

said over 12 years ago

Hello Bob, I like the idea of having an instant tenant, just not sure that the lease I downloaded is sufficient to this situation? I see no downside to renting to the sellers, just want to cover all the bases.

R

Rodney B

said over 12 years ago

Hello Bob, I like the idea of having an instant tenant, just not sure that the lease I downloaded is sufficient to this situation? I see no downside to renting to the sellers, just want to cover all the bases.

B

Bob R

said over 12 years ago

I agree Rodney. Having the seller remain for a few months gives you a chance to find a new tenant. True about lease agreements. I created my own that has increased in pages due to tenants try to out smart landlords in court. There is no such thing as a fool proof contract. Bad tenants don’t give a hoot. So it’s up to you to screen them the best you can and stay away from the court system. True, you may win a judgment, but collecting is another issue not to mention time consuming and possibly expensive. Consider the following: 1. Until you develop your own agreement, use a standard one and add addendums if needed. Make sure you charge them the current rental rate or even at the upper end. They may bulk if it’s more than their mortgage payment, but don’t let that bother you. There is no reason you should take a loss for them. Remember, you’re doing them a favor by allowing them to stay vs moving into a temp place and again into their new home. 2. Don’t forget to do a walk thru and ask for a security deposit. It’s also possible that their stay may be extended. Therefore, they should give you a written Notice that they will be moving on xx/xx/xxxx. 3. If they say they need 2 months, collect the 2 months rent and deposit up front at closing. Don't mention collecting up front until they tell you how long they will need to rent-back. Make it a part of the closing cost. If this was my deal and the seller was not happy with my offer and not willing to put $$$$ up front, I would tell them sorry, no deal on the renting part. Seller is not going to destroy the deal over a renting issue. Since renting was not part of the Sales Agreement (I’m assuming), seller would owe commissions if they backed out. Hope the above helps and welcome to the World of Landlording.

R

Rodney B

said over 12 years ago

Thanks Bob , just what I wanted to hear. You are correct in your assumption (not part of the sales agreement).Sellers have taken good care of the property. Considering #1, I have come to that conclusion after reading ALOT on this forum. Considering #2, I have a feeling their stay will be extendd. I will demand a walk thru before signing. Considering #3, I like your suggestions, I hope one day to be that savy, my only ? would be if I could lose this deal?

B

Bob R

said over 12 years ago

Anyone can back down on a deal and sometimes this happens. It's not over until Title closes. But as mentioned earlier, seller has a lot to loose if seller backs out, possibly even some of your costs. Your Agent should be able to handle the terms for you. As far as I'm concern, your agent is working for you until the deal is closed. Just make sure it's what YOU want and not seller or agents. Negotiate with a smile and let comman sense guide you. Let me know how thing went. Thanks and Good Luck.