Suggestions for dealing with current owner who does not want to leave?

I am set to close on a short sale next month. However, the current owner who is losing the house does not want to move out because he is living rent free and wants to continue doing so for as long as possible. He is threatening to let it go to foreclosure, in which case we lose the house. We proposed the idea of renting the house to him, though he has not responded and we do not think that he will want to do that either, since he has not had to pay on the house for two years and do not think he wants to start now.

1. Even if we work out some agreement for him to pay us rent for a month or two, what type of guarantee can we create that he will have to move out after the month or two is up? Any suggestions? Maybe have him put up some sort of collateral? Have any of you heard of anything like this before?

2. Any other suggestions for how to deal with this?

Thanks!

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Permalink Reply by Catherine Gheen on June 28, 2011 at 2:00am

I am sorry but I strongly disagree. You have not read fully the California Civil Codes that protect the seller. How on earth can anyone threaten someone whose spouse is gravely ill to go after their commission.

The only thing that seller needs to do is file a DRE complaint and they will be all over this like white on rice.

Again, read the short sale information and advisory it states on their the seller has a right to cancel. This verbiage can not be left up to real estate agents who are mad and want their commission.

If this end up in a legal action I would love to come watch to see what the judge says........................

Be careful of appearing to coerce someone in duress...............

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Permalink Reply by stanw on June 28, 2011 at 4:14am

Hi Catherine,

It is my agent whose wife is gravely ill, not the seller.

Thanks.

Catherine Gheen said:

Stanw:

Yes, the seller can cancel at anytime. The seller can not legally be evicted out of his home as he is the owner until a foreclosure occurrs.

The only option you have is to regain your deposit out of escrow and move on.

There are too many laws and civil codes on the side of the seller for you to win in court. The seller's agent could also be dragged into further legal action if the seller wanted to start pointing fingers at all parties.

Now that you say his wife is gravely ill, this seller is NOT in their "Right" mind and any good attorney could have a field day with all of you.

I really doubt this seller will close on this transaction. BE CAREFUL as to how the agents or you push this person to move out. Again, walk away, if you end up in a lawsuit later you will really wish you had walked away.

Oftentimes when we are in the middle of things we can not see the repercussions later. Just my two cents. I'm off to file a complaint against a negotiator at Wells Fargo, it is my prayer to have this woman fired.

Blessings

Catherine

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Permalink Reply by Linda Gregory on June 28, 2011 at 7:28am

Hi Stan,

I believe one of the folks who replied thought the Seller's wife is gravely ill-but if I read your post correctly, you are saying it's YOUR agent who is dealing with a very sad and consuming situation-I would ask your agent if his Broker might be able to step in and help or suggest a way to have some additional assistance in this complex transaction. Discuss your concerns with your agent. I am sure he is trying his best, but he is dealing with such a difficult situation, it is very sad.

stanw said:

Hi everyone,

Thanks for all of the WONDERFUL advice! I am the buyer. Everything is set to close in a few weeks. Inspection has been done, I have signed all the escrow papers. However, he has not signed the documents, and I do not know if he will. My agent has been helpful, however, to complicate this situation, he is dealing with his wife being gravely ill, which is also affecting how much correspondence I have with him, as well as the time he may have to put into this SS. That is why I found this great site and am asking the questions here.

1. Just to clarify my understanding of everything: If the seller does not sign the escrow papers and all necessary documents before escrow is set to close and the house goes to foreclosure, I will have no recourse, right? The seller has the right to not sign the papers. Is this correct?

2. The seller did accept my offer initially and forwarded it to the bank so we had an agreement. If he is now no longer cooperating, what recourse do I have (assuming he was not bankrupt, which he is)?

Thank you.

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Permalink Reply by Enrique Vasquez-Plaza on June 28, 2011 at 12:57pm

Catherine is RIGHT, seller has the right to cancel at anytime, due to his "vulnerable position" . It really sucks for us agents, but it really makes sense or the distressed seller (despite the character) Even if they get a mod offer, they can just opt out. So despite they appear to be under contract, the disclosures (Short sale information Advisory) are clear, and they have the last word.