What Should I Do If I Purchase a Short Sale and the Owner Refuses to Vacate?
There are a lot of risks that come along with purchasing a short sale home. While in most cases, the previous owners leave the property so the new owners can move in, this isn’t always the case. Occasionally, when you purchase a short sale the previous owner refuses to vacate the property, leaving you feeling unable to enter your own home.
There are already a handful of risks that come along with a short sale home:
- The purchase process is lengthier than a traditional sale
- You accept the property “as is”
- The seller might not be approved
- The lender might not approve the price
However, even if all of these risks above prove to be a non-issue, the previous homeowner can still choose not to vacate. At this point, it becomes a legal problem for the new owner. Here’s what you should do if you purchase a short sale and the owner refuses to vacate.
Postpone the Closing
The most extreme step you can take is an eviction. In most states, this is a costly and time-consuming process. Because you want to avoid needing an eviction, it’s best to try to negotiate with the previous homeowner if possible.
In many cases, the homeowner simply cannot find a new accommodation before the closing date. Either you or your real estate agent should talk to them about postponing the closing date. This might give them more time to secure a new place to live, and you’ll avoid an expensive eviction process.
Another option to avoid eviction is to come up with a rental agreement. Things sometimes happen. Perhaps your previous owners have done all they can to locate a new place to live, but they still need a few extra months in the space.
If you’re able to wait, it might be wise to draw up a rental agreement. This is a plan for the previous owner to stay on-property legally until an agreed-on deadline. In exchange, the previous owner will pay a rental fee each for their time spent in the home. This is a smart idea if you have a temporary place to stay and would like some extra cash before the move-in date. However, always get all agreements in writing and work with the help of an attorney.
Begin the Eviction Process
If no agreement can be reached or if all other efforts to negotiate have failed, it’s time to start the eviction process. If your closing agreement includes rights to physical possession of the property, you can take this to an eviction attorney who can begin the process.
Your lawyer will create a formal eviction notice and details for how the problem will be remedied. Since you’re now basically a landlord, you’ll need to treat the previous owner as an evicted tenant. You’ll provide a specific period of time for them to vacate the property, and this will depend on the specific rules of your state.
During this time, you might want to try what’s known as “cash for keys” in the real estate community. This is a common way for a landlord, usually in a foreclosure or short sale situation, to convince a tenant to leave the property quickly. In exchange, the landlord or new buyer will give cash directly to the tenant. Usually, this cash is enough for the first month’s rent at their new home.
Why give cash for keys? It usually avoids the eviction process or at least speeds it up without a costly court process. In addition, it reduces the risk of the tenant harming the property on their way out. Many times these tenants simply need some assistance getting to their new destination, and they also need the proper motivation.
Success in a Short Sale
Purchasing a short sale home isn’t always easy, but the deal might be worth it. If you’re in a situation where the previous owner refuses to vacate the property, start with mediation. It’s usually possible to avoid eviction, and this will save you both time and money.
You’ll be in your new home in no time. Just be sure you bring some patience and compassion to the table. Remember, these previous owners have fallen into a poor financial state. They might feel trapped with nowhere to go. Providing them an easy process to move quickly is often the best solution for both the buyer and the seller.