How Long Does the Seller Have to Move Out After Closing?

Most buyers expect the seller to be out of the property by the closing date, but misconceptions about move-out timing are one of the most common causes of conflict in real estate transactions.

There is no universal standard for when sellers must vacate, which means the terms you agree to depend entirely on what’s negotiated in the contract.

This guide will cover everything you need to know about taking possession of your property and getting the seller to move out. We will also cover legal implications if the seller does not move out on time.

Closing Date vs. Possession Date: What’s the Difference?

The first thing to know is that there are two important dates included in your purchase agreement: the closing date and the possession date.

The closing date is when the property legally changes hands through document signing and fund transfers. The possession date is when the buyer physically takes occupancy of the property. These dates can be the same or different depending on the contract.

These two dates should be explicitly communicated from the time the offer is accepted. The closing date and possession date are both listed in the purchase agreement and are reiterated in closing documents. If you are new to the real estate process, your agent should walk you through these dates and highlight if they are different. 

Explicitly stating these two dates protects both the buyer and the seller. Many buyers mistakenly assume they’ll get the keys immediately after closing, which isn’t always the case. This could come as a shock if the buyer doesn’t check the possession date when signing.

Conversely, some sellers believe they have a “grace period” (like 30 days) to move out. This doesn’t actually exist unless it’s negotiated. In some regions, the sale contract will let the seller stay for a few days after closing so they have time to move out, but this still needs to be documented in writing.

Standard Move-Out Timeframes in Real Estate

Buyers should know the possession date well before they sit at the closing table. Negotiating when the seller must move out can be part of the bidding process to make an offer stand out.

For example, if a buyer has more flexibility in their moving schedule, they might agree to let the seller reside in their property a little longer. However, all move-out terms should be explicitly stated. Here are three different timeframes for when a seller needs to vacate the property.

Immediate Possession

With this option, the closing date and possession date are the same. The buyer can move into the property as soon as they finish signing the closing documents. The seller must have vacated the property and removed all of their possessions as well. The closing appointment is typically when the buyer receives the keys. 

This option requires the seller to follow the move-out schedule and ensure the home is available to the buyer on time. The buyer will evaluate the property during the final walkthrough to confirm that the seller has removed everything that belongs to them. All responsibilities pass on to the buyer on the closing day, including utility transfers and fees for trash collection.

Short-Term Possession

This option is more common in some markets than others. With this agreement, the sellers can stay in the house for up to seven days after the closing appointment. This gives them extra time to complete their move. The seller might want this because they need time to purchase their next property or want to move directly from one house to the next instead of relying on storage and temporary housing. 

When this occurs, the buyer now owns the home, but the seller is temporarily borrowing it from them. Documentation about the expected move-out date should be included in the closing paperwork, including any per diem fees that are sometimes charged during this period. It’s not uncommon for sellers to pay $100-$200 per day for using the home. The agreement should also outline which parties cover utilities and maintenance during this time.

Extended Possession

There are also occasions where the buyer closes on the home, but the seller resides there for weeks or months after closing. Once again, this needs to be included in the sale agreement. Along with a clear possession date, all parties involved should sign a rent-back agreement or use and occupancy agreement that works as a lease. 

With these documents, the seller immediately becomes the tenant after the closing appointment. They need to submit a security deposit, pay rent, keep renters’ insurance, and follow any rental guidelines stated in the leaseback agreement. The seller might also be required to pay the utilities depending on the terms of the agreement.  

Buyers are not required to rent out their homes to sellers. If the seller wants a rent-back agreement but the buyer wants to move into the house immediately, they can negotiate the purchase agreement or walk away from the deal.

Factors That Influence Move-Out Timing

Every real estate transaction is unique, which means you won’t know whether a seller wants to delay your possession date until you start making offers and negotiating deals.

However, there are a few factors that could contribute to a seller pushing back possession for a few weeks or even months. Here are a few reasons why they do this.

Market Conditions

The current housing market could dictate whether the seller requests an occupancy agreement or feels comfortable moving out by the closing day. In a seller’s market, there are more buyers than properties. This means a seller is more likely to receive bids, and buyers have to compete with each other. A seller might list their home and request a rental period so they have more time to compete for a home. 

Buyers who have flexible moving dates can use this desire in their bids. They can make their bids stand out by stating the buyer has a few months to find a home and move out. In some situations, possession timing can be as important as price in determining which offer a seller accepts.

Logistical Considerations

Even in a favorable buyer’s market, some sellers might ask for move-out extensions while they prepare to leave their current house for their next home. This could be because the seller needs a few days to transfer money to close on their new property or because of scheduling conflicts with moving companies. There also might be intentional delays, like asking the new owner to wait until the school year ends to accommodate children who would otherwise have to change schools.

A move-out extension or delayed possession date isn’t necessarily a sign of a bad seller. Life can get in the way of plans, and buyers can help out by being understanding and letting the home sellers have an extension for a few days. 

Financial Factors

Mortgage approval timing affects closing timeline, with conventional loans typically closing in 30-45 days. Government-backed loans may take longer, leaving buyers requesting closing extensions. 

As the buyer, you may request a prolonged closing period, or the seller may delay closing because of their own financing needs. If the seller is the reason for the delay, the buyer can request financial incentives for the inconvenience.

Property-Specific Issues

There could also be miscellaneous problems that prevent the new owner from taking control of the house. For example, tenant-occupied properties may require sellers to follow specific notice periods, meaning they cannot just kick out their renters. Other properties might require substantial repairs or renovations before occupancy. These should be agreed-upon in the sales contract and approved by the buyer in the final walkthrough. 

Unique properties, like large estates or farms, may require extended moving timelines. For example, a farmer might need more time to move their equipment and livestock unless the purchase contract says to leave them in place.

How to Document Possession Terms in the Contract?

Your real estate agent is responsible for writing clear and specific terms in your purchase contract. However, both you and anyone else involved in the buying process should review these documents carefully before submitting them to the home sellers. This can increase the chances of a smooth transition between parties.

Here are a few language examples to look for.  

• Include the exact date and time the seller must vacate the property. (Instead of “closing date,” say “5:00 PM on closing date.”)
• Add financial penalties for delayed vacancy, which typically comes in the form of daily fees.
• State who pays utilities during any post-closing occupancy.
• Highlight insurance responsibilities during transition periods.
• Document the condition requirements for the property at vacancy
• Include the process for the final walkthrough after the seller vacates. 

This contract will be your main document source if you need to take legal action against the seller. You need to prove they actively went against your agreement and the specified period they had to move out.

Use and Occupancy Agreements

If you agree to let the seller stay on the property after the closing appointment, you may need to develop a use an occupancy agreement. These are typically drafted if the seller plans to stay in the home for more than a few days. 

Just like any rental agreement, this contract should have clear parameters for move-out dates, utility payments, and maintenance responsibilities. As the new owner, you are now a landlord and they are a tenant until they are completely moved out. Consider looking at lease examples or asking your real estate agent for a sample use and occupancy agreement to confirm you include all relevant information.

Rent-Back/Leaseback Structures

If you agree to lease your property to the seller for an agreed-upon time, propose a fair rate for your rent payments. Look at the market rates for properties of your size, or base the payment on your costs as the buyer. You deserve to be compensated for the additional time the seller has on your property. 

You will also want to detail the insurance requirements needed during this rental period. Sellers typically need renters’ insurance while buyers maintain homeowners’ insurance. You can also ask the seller to pay a security deposit in case they cause any damage to the property during this time.

Before you start drafting these agreements, confirm with your lender that this is allowed. Some mortgage lenders limit post-closing occupancy periods, and you might not be able to rent out the home to the seller. Asking this before entering into a sales contract can save all parties involved a lot of stress.

Financial Protections for Buyers

In some cases, the seller might agree to an escrow holdback to complete the real estate deal. With this option, a portion of the seller’s proceeds (typically $5,000-$10,000) is held in a third-party account until the seller vacates. 

If the seller leaves the property on time and it is in good condition, they will receive the funds. If there is a dispute between the buyer and the seller, the funds will stay in the account until everything is settled. The buyer might be issued the funds if the seller damaged the property, or the dispute may be settled, and the seller will receive their money.  

Some buyers might opt for a security deposit during an extended leaseback agreement and require an additional inspection before the seller can move out. This move-out inspection will determine whether damages occurred during the seller’s post-closing occupancy.

Legal Implications of Move-Out Delays

Occasionally, the homeowner sells the property but refuses to move out. No amount of contract clauses and detailed agreements can get them to leave on time. In this case, the buyer may need to take legal action to remove them.

This can be incredibly frustrating for a buyer who simply wants to access their new house.

Holdover Seller Scenarios

A “holdover seller” is someone who remains on the property past the agreed-upon vacancy date without permission. They are neither tenants nor owners at this point. The term comes from the seller “holding over” beyond their expected move-out date. 

The buyer may need to start the eviction process to have the former owner forcibly removed. They also might seek compensation for the additional time the seller spent on the property. 

There are times when sellers need a few extra days to move out and other times when they are being intentionally difficult or hostile. If your seller is the latter case, you may need to approach them as a holdover tenant.

Legal Remedies Available to Buyers

Even though you technically own the property, you can’t simply change the locks or remove the seller’s belongings. There are formal processes to be followed if you are dealing with a holdover seller. 

You will need to follow the eviction process, which starts with a formal notice to vacate, followed by filing for eviction with your local housing authority. Eviction can take several weeks, and even months, which is frustrating for buyers who want to access their properties. There are also costs associated with eviction, like filing fees and attorney fees. This could add unexpected expenses associated with simply taking possession of your home.

Financial Consequences for Sellers

Sellers can try to stay on the property as long as they want, but buyers have the legal right to take possession and seek compensation if the former homeowner refuses to leave. They can see daily penalties between $100 to $300 as long as the seller stays on-site. Buyers can also ask the seller to cover the temporary housing costs, storage fees, and legal expenses because of the possession delays. 

In the worst-case scenarios, these disputes can lead to litigation. The longer the sellers try to drag out the case, the more legal fees both parties will accrue. It is not in the seller’s best interest to remain on your property. In most cases, they should follow the purchase agreement or move out within a few agreed-upon days.

Use a FastExpert Agent to Navigate Possession Issues

The real estate agents found on FastExpert have years of experience and have helped clients navigate possession timing issues. They are prepared for difficult sellers and can work to make sure buyers are compensated for their time and inconvenience. If you are worried about a seller respecting the possession date, turn to FastExpert. Hire an agent who can resolve problems if they arise related to possession or any other part of the homebuying process. 

Connect with a FastExpert agent today and enjoy the professional guidance and support they can provide.