I'm selling my home in North Carolina. The closing date was supposed to be on 7/21, but this date was missed due to the fact that the lender asked the underwriter on 7/18 to get a copy of Form 4506-T from the IRS. Apparently, this area of the IRS is very backed up. There's a stipulation in my contract that states, if the closing has not occurred after 10 days from initial closing date, the buyers must pay interest on the purchase price at a rate of 8% per annum accruing from the end of the 10-day period until closing occurs or the contract is terminated. However, what the buyers are requesting is that they move in by the end of July & pay me rent on the property. Any advice would be greatly appreciated.

I'm selling my home in North Carolina. The closing date was supposed to be on 7/21, but this date was missed due to the fact that the lender asked the underwriter on 7/18 to get a copy of Form 4506-T from the IRS. Apparently, this area of the IRS is very backed up. There's a stipulation in my contract that states, if the closing has not occurred after 10 days from initial closing date, the buyers must pay interest on the purchase price at a rate of 8% per annum accruing from the end of the 10-day period until closing occurs or the contract is terminated. However, what the buyers are requesting is that they move in by the end of July & pay me rent on the property. Any advice would be greatly appreciated.

the rental would require a separate agreement. what if the escrow falls through completely? then you have an unwanted tenant.

What does your Attorney think about giving Pre-Mature Occupancy ? Where will you be living ? How certain of Closing are you, or how certain is your Attorney ?

Occupancy prior to Closing is always an area similar to a Mine Field. When you make it thru, it's Okay ! When you don't, it's . . . . Not Good. Who's carrying Insurance on the premises during the Rental Period ? Who insures the "Tenants" Belongings ?

Familiarity breeds contempt. Living for a few days in a property gives them the opportunity to get real "up close and personal". Some times defects are discovered and brought wwith them to the Closing !

Avoid it if you can ! Your Attorney should be able to address your concerns in each of the little areas I've mentioned, and MORE. I hope none comes to be a problem; but "Forewarned is Forearmed" Take the risk IF you absolutely have to. Tenancy brings with it certain rights. Good Luck !

Do you have an attorney or real estate agent helping you? They should be your first resources for advice.

It normally does not take 10 days to get a 4506 tax transcript. I had a closing where the underwriter didn't have it, and after some calls, the IRS faxed it over to the underwriter within two hours of the request. Similarly, your buyers probably already signed an authorization for the lender to get information directly from the IRS at the time they submitted their loan application.

In my humble opinion, you should not let your prospective buyers take early possession of your property as renters. To do so is risky. It would be better just to have a clean escrow closing. If you want to risk it, then you should at least be paid in advance (by certified funds or cashier's check) and get a large security deposit. Your state laws might determine what a landlord can and cannot request in this regard. If your buyers have money in escrow, you could have them release some of the funds to you as security for the rental situation, but such funds have to be replaced by buyers so that escrow can close. If you let your "buyers" rent prior to close of escrow, you will need a carefully worded rental agreement detailing the rights and responsibilities of the parties to the rental agreement. If you are not sophisticated about making these arrangements, you need to speak with your agent and/or attorney.

Keep in mind that if your prospective buyers move in and then fail or refuse to close, you now have a rental on your hands and will probably have to get rid of the tenants to sell it to the next prospective buyers. That could mean having to evict them. They may not cooperate with any showings while they are living at the property.

Take everything I said with a grain of salt. I don't know all the facts nor the personalities of the parties involved, nor how much money or how little money the buyers have at their disposal. No legal advice given. See your attorney or agent for further assistance.

are they requesting to pay rent in lieu of the 8% interest? I wouldn't let them off the hook on that 8% stated in the contract especially since the hold up is the fault of the buyer. but if you have a place lined up already and already moved out, it makes sense for you to charge rent AND the 8% interest

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I think something is FISHY ! Why don't you attempt to get a Transcript of your own 1040 and see how long it takes ? This seems to be an automated process. If the Underwriter has yet to verify the stated income of the Buyers, then you've got much bigger problems yet to come.

I asked yesterday what your Attorney thinks about this matter. I'm having serious doubts about whether that Buyer is going to get final Approval for the Loan . . . . which means NO to the Occupancy !

PS: BY NOW YOU KNOW YOU HAVE TWO SEPARATE THREADS RUNNING ON THIS SAME SUBJECT. Perhaps the Moderators could combine them.