My bil was selling his vacation home. Multiple offers, this was in 2021 I think.
The buyers in order to win the bid, let them use the house for one more summer as an enticement to pick them.
It worked.
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People have mentioned the possibility of the sellers not moving out at the end of 6 months and the difficulty of evicting them. It could easily be a year if they decide not to move. For example, the poster who said the sellers were building in Florida. Well, delays happen, hurricanes happen, crooked contractors happen. The sellers arenât trying to scam the buyers, but things happen.
Also, you are the owner but it would be a non-owner occupied house for insurance purposes (and technically for mortgage rate purposes but for 6 months Iâd bet the bank wouldnât care - the insurance company WILL care). Itâs possible youâd close with one insurance company (and it might be the forced placed insurer the bank uses) and then youâd have to change to a non-owner occupied company before the 6 months is up. Those rates are higher and harder to find.
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No. They need the money now.
Thatâs what I am afraid of. Who knows what it will be like in 6 months?
Do you know why?
Excellent point about getting a landlord policy for what would be a rental.
We once were renting back after selling our house. The construction of the new place was delayed, and it did not help that the cityâs inspectors were quitting in droves. We moved out to a hotel but someone else might have said âscrew itâ and stayed put. It took heroic efforts to find a place for our pets and stuff on a relatively short notice right before the holidays.
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No idea. Does it matter? It is not because they are building a house to move in. Other than that, I donât know. This is their vacation home.
I do know somebody who recently did a 1 month rent-back on their new home purchase. It was a sellerâs market, and the buyers didnât mind having an extra month to plan move out from their rented place.
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Vacation home? 6 months?
They might want one more summer to build lasting memories. They might rent the property and have renters on the books already (that was one of the issues with my relativeâs place). Hard to say.
If they donât have renters and those can be set a year or so in advance, I would go for one more season to enjoy their home.
Iâm not sure where the property is located. If Florida then 
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Both. It is partially rented. I am guessing they initially thought they could cover their financial needs with rent. Obviously not enough. Yes, they would like another whole season. I am guessing in summer resort type places the property price dips in off season. If I were to wait until fall, I may get something cheaper anyway. Not sure the numebers work in my favor. I pay now, get rent but loses out interest earning on the capital pay higher insurance premium. In an extreme example, what if they set the house on fire? I doubt the insurance will be enough to recoup what I pay to buy.
Unless it is a sellerâs market, I wouldnât do it unless the rent reflected the risk and was economically attractive â rent covers your capital costs, added insurance costs, taxes, depreciation plus a return. Iâd also demand a portion of your purchase price be held as a security deposit, say between 1 to 3 monthsâ rent. Of course also run a credit check. You need to approach this like any landlord.
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We did this âUse and Occupancyâ agreement when we sold our house last year. The contract stated that $10,000 would be held in escrow from the sellerâs proceeds until the sellers vacated the property and left it in the same condition it was in at the time of the buyerâs inspection, so comments like âYou would then be responsible for any repairs or damage that occurs while they live thereâ are not accurate. The sellers were also responsible for paying utilities and lawn maintenance and obtaining renterâs insurance while they occupied the property.
We live in a sellerâs market so buyers were quick to agree to this. We did it for 60 days. Six months seems like a long time. Line up a good real estate attorney. Good luck!
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Unless this is a very unique property or well priced that you really want, I wouldnât do this.
Their cash flow problems arenât yours to solve.
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It is not a sellerâs market. The property is a bit unique, at a full price or slightly overpriced. I like the property. Iâd get it had it been a simple transaction. The rental and security deposit will come out of the sales price. Theyâll lower the sales price by the amount. It would make more sense if I should insist they sell now and be done.
This also could become a second, rental, property for college FA if that is still a consideration, and may cause extra tax forms for rental income. Six weeks is one thing, but 6 months is a different matter.
SoâŠyou are a landlord, the seller gets tenant rights, insurance and tax issues, and will you need a bridge loan to buy this (second?) property?
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Are you paying cash or is there a mortgage involved? If that is a cash deal, can you delay the closing until fall and place the purchase price $$ in an escrow so that the seller is not worried about you walking away? This is what our kids did with their starter house.
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Thatâs what happened with my relatives vacation property.
Closing was delayed. I guess that takes some trust but it worked out. I donât remember if it was a cash sale or not
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With a mortgage, there is a risk that the buyer might not qualify in 6 months due to income loss or rates spiking⊠but that can be somewhat mitigated by a large non-refundable earnest money deposit.
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The seller needs the fund now. If they can wait until fall, they probably wonât sell. I think I should push for closing and vacating the property now if I am paying now. I was trying to accommodate their wishes to use the property another season but itâs just too risky for my taste.
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That seems like the best option
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