Buyers for our home, whose mortgage was not approved at the 11th hour, despite receiving mortgage commitment, now want to rent our empty home in another state. The were denied approval as the gal is not yet legally separated. The guy could not get mortgage on his own. They are willing to rent for $1300/month plus utils, and give us a nonrefundable $5000 deposit that we keep if the closing does not occur w/in 6 months. We have put the home back as active but would need to put it back to pending in this situation. We got little action at today's 1st open house, since their deal fell through. We have still not formally rejected their initial offer, as our agent hopes they will come through. Of course if we get another offer we need to reject their deal.

What do people see as the pro's and con's of doing this? Taxes and utilities cost us about $600/month, plus grass cutting etc. The house has been on market since March in NY state, and they were our only offer. The offer came at 10 weeks after listing. Our fears include damage to home that could eat up the $5000, to make it marketable again. And who is responsible for repairs, or if disaster hits? I am continuing my HO policy.

We thought of just telling them to give us a nonrefundable deposit to guarantee closing in 6 months, and not rent to them as an option. Maybe $10000 rather than 5000, and let them rent elsewhere.

Any thoughts appreciated!

We discussed a similar situation for another Seller last week . . . . so I'll just repeat much of what I said then:

What does your Attorney think about giving Pre-Mature Occupancy ? How certain of Closing are you, or How certain is your Attorney ? How likely is the Buyer to completely severe her Marital Relationship during that time period? Your Attorney should also be able to assess that situation.

Do you own the Subject property outright, or is there an outstanding Mortgage? If there is a Mortgage, I always advise Sellers to check with the current Lender to make sure that "renting" is not forbidden under the terms of your current loan. Banks will often agree to this anyway if you talk to them first, and if they understand the circumstances.

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 even for just a few days in a property gives them the opportunity to get real "up close and personal". Some times defects are discovered and brought with them to the Closing !

If you have to Postpone the Closing 6 months, will the Property be subject to another Appraisal? How likely are market conditions to change in your area between now and then ? How much room was there between the Contract Price and the Appraised value ?

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 !

I would require a credit report to determine the likelihood of them being able to close in the future.

You might be better off reducing now to sell fast so you won't have the headache especially being states away it will bee hard to manage your property from afar.

What are the SOLDS in your market currently? If you can take a 10k hit and sell it it might be better in the long run. This is one of those things where you really have to be involved in the deal down in the trenches to know the best course of action to take.

Just remember this there is a huge difference between a straight rental,a lease option,and a lease purchase. If you let them move in I would have FIRST that the non refundable option money be paid before move in in a certified money order or cashiers check. If they write a bad check for instance it can take days to get it back and by then guess what they have moved in and now you have to evict.

good luck-no legal advice

I would sell why you still have the opportunity this summer, prices keep falling and this winter doesn't look much better.

Everyone who posted is right on. The only thing I would like to add is to be sure to have all parties execute an Early Occupancy Agreement and Month to Month Rental Agreement. Plus be sure the $5000 is in the form of a cashier's check or money order.

S

So if the market is going down pretty fast in your area, you better reposition your house and sell it now, but if the market is going flat or slow down, take the offer. You don’t have anything to do. There are too many hidden things like how your tenants will take care of the house ect. I think the best decision is to sell now.