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Valentine's Fight :(
We are two weeks away from closing and the relator tried to set the closing time for 3:00 pm on the 28th. Well that didn't work for DH's schedule because he won't take time off work for anything. So we had to move it to 4:00, no problem. But we need to do a walk through before closing and he refuses to go, so hopefully I can do it on my own.
Basically DH is upset that we have to do a walk through because the contract is written up so closing is on Feb. 28th and we take posession on March 5th. He knew this when I made the deal. They have a FHA loan and must close before the 1st, and are moving into a rental that won't be available until the 1st. I know there story, he lost his job and is now working with his local church. It's not like they are shaddy characters, but family people dealing with a job loss. The house is in near perfect condition. I had no problem giving them the extra time since we aren't out of our rental till Mar. 31st.
DH just yelled at me for about an hour about how something horriable could happen and I am too trusting. And when there is a big whole in the wall he is going to say, "I told you so!" On Valentine's day none the less.
We are going to have a tennants agreement written up at closing to cover us legally while they remain in the home. And DH originally agreed to let me finalize the deal because I am paying all of the downpayent and decorating costs. UGHHHH!!
Has anyone made a similar deal? Maybe I am completely off my rocker....
Re: Valentine's Fight :(
Yes, we've done a similar deal. We were on the selling end of it though and planning to move out of state. In order to make their offer appear more attractive, the buyers set the closing date for Friday but the possession date for Sunday. This would give us time to move out and tie up loose ends. It's not very common, but it isn't unheard of.
That said, our buyers were terribly misguided. It's not common here to use an attorney during the buying and selling process, and they were acting on the advice of their agent. There was absolutely nothing in our contract regarding what we were responsible for, what would happen if there were damages, ect ect. They did not ask for rent or an escrow. If we had caused any damage, they would have been out of luck. If we had stayed and refused to leave, they would have had to take us to court. I think they realized this halfway through the process because they came back requesting we sign a crude tenant contract, but by then the contract was signed and we were not legally obligated to agree to their terms.
I would contact a real estate attorney if you aren't working with one. What does your contract say?
It's a leaseback, and it's fairly common practice. It does come with risks, but so does driving a car.
It sounds like you are getting some conditions outlined in an agreement, so be sure you are well advised at what to include in this agreement. I would consult an attorney that has experience in real estate leases to assist in this area. Maybe you can escrow a portion of the sales price to serve as a security if there is any damage between your walk-through and when you take possession.
I'm sorry that your DH reacted so strongly about this. That hour long argument does seem excessive, particularly when it sounds like you are likely taking the correct steps on this. Was it a true argument, or more tense discussion? I know sometimes I say that DH and I argued when really we just had a difficult discussion without raising our voices. If he was truly yelling at you for an hour about this, then my heart goes out to you and hopes that you are both able to find a way to communicate through this rationally. I think the previous poster may be a little strong in her comments, but I am seeing the same red flags in your post that likely caused her to recommend marriage counseling. None of us truly know your situation, but take an honest look at it, and figure out if you really want to tie yourself down with a mortgage with this guy.
On a side note, I am a little confused about your statement that you are paying for everything. Does he even have any skin in this game? Are you the only one on the deed? I'll admit that running separate money accounts in a marriage is very foreign to me. But if I was carrying the burden of the housing purchase, and I was paying for all the house costs, then I would thank him kindly for his opinion and tell him to butt out of the business aspects.
Good luck with it all.
Click it if you can't say it!
Thanks for the advice. It felt like I had everything taken care of but I think I will have my attorney look everything over and maybe refer me to an attorney who specializes in this stuff.
I MAY have been exaggerating a bit when I said he was "yelling." We were just having a discussion, I need to remember how everything is taken on chat boards.
I can understand your DH's concern; I have the same ones! We are closing on the 24th and the owners were extremely difficult to work with in the process. They received a taste of their own medicine when the house they offered on and drove those sellers crazy fell though. I heard through the grapevine that they were going to ask to rent back from us, and I refuse to be in a position of risk.
I agree with the pp to review with your attorney your rights as a landlord, which you will be for that period, and how liability would fall. Are they paying you for those days? If not, they should!
First of all, I am so sorry for all the stress and for the fight on Valentine's day
You aren't crazy, it is called a rent back and there are standard forms to address everything.
First, I want to make sure I am understanding everything: you are buying a home and closing on the 28th but the sellers need to remain in the home until 3/5. Dh is upset and doesn't want to go to the walk through (why? It protects you guys. But really, all that matters is he is upset).
About the rent back: totally common, as I said. As soon as you close, you become the owner and the sellers become the tenants. A lease should be signed before closing takes place. There are leases specific to this situation or a standard residential lease can be used. If you are not charging rent from 2/28 to 3/5, specify that in the lease but set a rental amount that would be charged on 3/6 going forward (and that should be based on your expenses and fair market rent, not what they want to pay or what they have been paying). It will be the best way to insure that they are out on time. Also, collect a security deposit (or have it held back in escrow). Do not confuse the situation: they are TENANTS.
Furthermore, you have all the powers of any other landlord. If they damage the home, you have rights just as if they never owned the home. So if there is a hole in the wall, you charge them for the repair (take it out of the security deposit) just as you would for any other tenant.
Talk with your Realtor and ask them to prepare the lease paperwork. Be sure to have it signed before closing. If they do not sign and remain in the house, they still have legal rights as tenants and you have no document detailing the rental agreement and terms. If they don't leave or don't pay rent, you still have to go through a normal evicition process which can be lengthy.
All that being said, it can work out just fine. The most important thing is to have your agreement in writing in advance.
Best of luck!
Lighthouse State Beach, Santa Cruz.