SOUTH FLORIDA SUN-SENTINEL Enlarge
FORT LAUDERDALE, Fla. -- As the housing market gradually recovers, a new twist has emerged: Some sellers are insisting that buyers allow them to stay in their homes after the deals close.
A few need more time to find another place because the sales happened so fast, while others want to remain through the school year. Whatever the reason, some sellers are striking these deals because the improved market means buyers don't have as many alternatives, real estate agents say.
Shannon and Melissa Santee sold their four-bedroom Parkland, Fla., home for $472,500 on April 9 but are staying there as renters until June 7 so their two children can complete the year at Park Trails Elementary School. The Santees bought a home near Alpharetta, Ga., and are renting to the sellers as well.
"We just thought it would be way too much to start a new school for two months," said Melissa Santee, whose husband has accepted a promotion with a floor company. "We figured finishing the school year would make the transition easier."
Buyers have had the upper hand in real estate deals since 2006, when the market was flooded with properties and prices hovered near record highs.
As prices became more affordable, sales increased sharply, reducing the supply of available homes and ultimately giving sellers more power in negotiations.
Bidding wars have returned for moderately priced homes, and some housing markets are predicted to have hit bottom. Still, other experts say more foreclosures could be on the horizon and will hurt prices.
"It's still a buyer's market," said Michael Citron, a real estate agent in northwest Broward County. "But in desirable neighborhoods with not a lot of inventory, buyers are fighting to get the houses."
Most sellers prefer to leave the home on the day of closing or before, real estate agents say. But: "Sellers are gaining strength," said Beverly Rothstein, an agent in Broward and Palm Beach counties. "It's been a long time."
While buyers may feel they have no choice but to allow a seller to rent, they should be careful about agreeing to it, agents and lawyers say.
There should be a written agreement that includes a specific move-out date and the amount of money that will be held in escrow to be used if the seller-turned-renter damages the property.
Buyers should check with their lenders to make sure they can delay occupancy. Most lenders approve short sales on the condition that the sellers move immediately after the deals are complete, said Gary Singer, a real estate lawyer in Sunrise, Fla.
A buyer must really want a house to allow the seller to rent after the closing, said Joe Kohn, a Fort Lauderdale real estate lawyer.
Mr. Kohn said he tries to discourage the agreements: "I hate 'em. I try to talk people out of them. You don't know what could go wrong."
A quick sale prompted Monica Sherman to ask for more time in her home.
She had a verbal offer on the five-bedroom lakefront property within an hour of listing it for sale in late March. She signed a contract within two days and closed in 20 for a price of $590,000.
"There's no way I'd be able to get my act together in that amount of time," said Ms. Sherman, 43, a mother of two.
Ms. Sherman initially asked to stay through the school year, but the buyer and seller later compromised on a different move-out date. The buyer did not need a lender's approval because it was a cash sale.
Ms. Sherman said she is relieved that she does not have to worry about timing her home sale with the purchase of a new place.
"It makes me a better buyer," she said.