Possession: Check ‘At closing’ if there will be no seller occupancy or check ‘by 12:00 Noon’ and input the number of days after closing for the amount of days the seller will be allowed to remain in the home after closing. Include a ‘sum of’ for the cost per day.
Note: if your client is offering free occupancy then it will also not include a security deposit. A strategy would be to charge for occupancy and offer a 100% occupancy credit if the seller moves out on or before the days listed. In additional conditions section of the purchase agreement you can include the following verbiage: “Seller will get a 100% refund of the occupancy if they move out on or before the 30th day (or nth day) after closing”. 99% of the time, it goes well without this type of security deposit but its something you can discuss with your client.
Important: Do not utilize ‘Negotiable’ for occupancy in an offer, with plans to negotiate later. First we must determine the sellers preferred occupancy. Review the MLS info to determine the preferred occupancy or contact the listing agent. Please make sure not use the term ‘negotiable’, select either ‘At closing’ or ‘x’ days after closing.
Have a discussion with the buyer during purchase agreement writing process to make sure that the occupancy works for the buyer. Factor in the closing date plus the occupancy days to provide an estimate of when a buyer can move in and disclose that if the closing takes place sooner or later the occupancy date will change accordingly.
Tax Prorations: In most parts of Michigan, property taxes are paid in advance, meaning for the previous tax year. The purpose of tax prorations is to ensure both buyer and seller pay their fair share for the property taxes. Different markets handle this in different ways. In the Detroit market make sure the taxes are prorated as paid in advance. The Grand Rapids market taxes are prorated on a calendar year as a standard custom. Be aware of local market expectations. You may discuss this with your client if you’re serving an area you’re unaware of the local customs.
Disclosures: Include the disclosures in your signing package, add signature tags on them and set signature tags where highlighted. I always provide my client a 10 day right to inspect for Lead Based paint.
Binding Acceptance: Usually we will want to provide 24-72 hours for Sellers to accept an offer. Could be longer at listing agent’s request. Binding acceptance does not mean the seller has to provide a counter-offer within the time period, they could do this at anytime unless the buyer send a Notice that they are withdrawing the offer. If an acceptance was to occur after the time limit it would be considered a counter offer and the date would need to be changed and initialed by all parties.
