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For a smooth closing, the seller should vacate the premises before closing. But is it always possible? Sometimes it’s necessary to negotiate for the seller to stay for a longer period. Are there other solutions?
Not long ago, we had buyers who were eager to purchase a house in Atenas and didn’t need to move immediately. The sellers insisted they should be able to stay for another 2 months after the closing, so they could take their time to find another house elsewhere.
Serious Costa Rica real estate agents will typically draft a written offer, although most agents prefer to do so verbally. We prefer not to have any last-minute surprises and have a smooth closing. The offer should outline what the buyer and seller agreed upon, including the sales price, closing date, home inspection, who will pay the legal fees and the real estate commission, and any other terms agreed upon by both parties.
Once an agreement is reached between the buyer and the seller, the offer should be submitted to the buyer’s attorney. The attorney will then draft the option to purchase–sale agreement to make it official. Once this agreement is signed by both parties, the buyer will typically deposit earnest money into escrow.
Walk-through before closing
To ensure your Costa Rica real estate closing is a success and reaches its completion, conduct a walkthrough before the closing. You should do this just to ensure that everything is okay with the property. I have seen sellers take electrical plugs, toilet seats, lamps, and the water pump. I have had sellers leave the windows open, and when the buyer moved in, the house was flooded with rainwater.
So I ALWAYS do a walk-through of the property before closing, even if the sellers get mad at me. Sometimes, they believe I don’t trust them, but I do it to cover my own and my buyer’s behind.
I also prefer that the sellers vacate the premises before closing. So in the closing attorney’s office, both parties first sign the closing papers. Then, the buyer will receive all the keys to the doors and gates, the remote controls for all gates, and the alarm code. The seller will then go elsewhere after closing.
Vacate the premises before closing
But there are always exceptions. So, why do we have to worry about the seller moving out before closing, or not? Once in a while, when we have a cash deal, we go straight to closing, without doing any option to purchase–sale agreement, and there is no money down. This is what happened a few weeks ago, and that’s why I am writing this blog today about it.
Power of attorney
The buyer had left the country and given his lawyer a power of attorney to close on his behalf. Everyone wanted to proceed directly to closing as soon as the corporate papers were confirmed to be for the transfer of the shares. This would be approximately a week. In their opinion, the time was too short to do a formal option to purchase–sale agreement. Unfortunately, I was traveling and therefore wasn’t there to discuss this matter.
We did not have a written agreement between the parties. And the buyer could have walked away at any time, a situation I prefer not to be in. The seller was also going back to the US the following Monday, and time was running out. She had incredible art in her condo and needed to ship it back to the US. So she wanted to be able to use the apartment until she was able to move her art.
Lease-back or not
What can you do if a seller stays in a house until after the closing and then fails to vacate the premises? It will take you at least three months to evict anyone from a property. In Costa Rica, the rental law allows a tenant a minimum of 3 years, so a lease is really no good in a situation like this. That’s a good reason to make the seller vacate the premises before closing, isn’t it?
The only solution is for the lawyer to add to the purchase-sale deed that the seller will remain on the property for a specified number of days by mere tolerance. Discuss this with your lawyer before making a decision, though.
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