It is not unusual for a buyer and seller to want to close on their house sale, but there remains obligations on the part of the buyer or seller to fulfill. It is always imperative that whatever the agreement is for post-closing obligations, that it be reduced to writing and signed by each party involved so that all parties have a clear understanding of what their agreement is. This will help to avoid any later misunderstandings or disputes over what each party’s obligations were.
Some agreements which address common issues include:
Use & Occupancy Agreements: Sometimes a Seller seeks to remain in the home after closing and the Buyer agrees to this. In such event, an agreement commonly called a Use & Occupancy Agreement should be prepared. It should spell out what daily charges the Seller will be paying for the right to remain, what other charges, such as utilities, telephone, cable, the Seller will be paying, the date Seller will be vacating the premises and what happens if the Seller vacates either earlier or later than that date. In addition, the Agreement should identify what other obligations the Seller may have such as providing proof of liability insurance, responsibilities for maintaining the property, and what condition the property is to be in when the Seller finally vacates. The parties should determine if they want to hold funds in escrow in the event of any damage to the property while Seller remains (and when the Seller actually moves out), and/or for other charges, and what happens to the escrow if any damage or charges exceed the amount of the escrow.
Inspection Escrows: Sometimes the parties agree that the Buyer has a right to perform an inspection – let’s say of a pool or air conditioning system after the closing. This can occur when the closing is in the winter and the weather does not permit a proper inspection. In such an instance the parties should be very specific about the type of inspection, the time period within which it must occur, the amount to be held in escrow, when to release the funds and what occurs if the cost of any repairs is more than the amount held.
Repair Escrows: Sometimes the Seller agrees to make a repair which cannot be completed by the closing date. Again, the Agreement should be in writing and the parties should provide a detailed summary of what the Seller is obligated to do and when. Provisions should be made in the event of a delay in completion of the repair. And again, if an escrow is held, the Agreement should provide what occurs if the cost of repair exceeds the amount of the escrowed funds.
What’s important to remember is to always put the Agreement in writing and make provisions in the event things don’t go according to plan!