What use to be something that happened occasionally during a real estate transaction has now almost become an automatic assumption. The term we use for it is “occupancy” and it basically means that after your home closes you can stay there for a predetermined period of time. You end up paying rent to the new owner. So how does this work?
Most agents will take the new payment of the people buying your home and divide it by 30 days. For example if the new payment is $900 per month you would divide that by 30 days and come up with an occupancy of $30 per day. The title company that is handling the transaction will create an escrow account and hold those funds back from the sale. Let’s say the seller was going to net $15,000 on the sale of their home, and they needed 60 days occupancy. The title company would escrow $1,800 from the final check. So the seller would get a check for $13,200 and the title company would hold on to the rest. So what happens if the seller is able to move out after 15 days? You would multiply 15 days by the $30 per day fee and that money would go to the new owner. The remaining would go back to the seller.
Asking for occupancy is a great way to avoid problems during a transaction. A lot of problems during a real estate transaction stem from timelines and deadlines. A great example is when a seller is doing a new build. So often there are setbacks and missed deadlines. Asking for occupancy can be a lifesaver. So how much time do you ask for? I always ask for more than we need. If you’re confident you can be out in 30 days, let’s ask for 45 just in case. Some will ask for 60 days, which doesn’t happen that often, and occasionally you will see 90 days. With there being so few homes on the market buyers will agree because they want to lock up a home. If you have been thinking about selling, but you have an obstacle in the way such as a new build timeline or a pending job transfer and you need some help on deciding when would be the best time to enter the market, contact me today I would love to help!
Chris Taylor
Keller Williams Macomb
586.524.1095
Chris.taylor@kw.com
