Post Closing Occupancy Agreements

Post Closing Occupancy agreements

Post Closing Occupancy Agreements Explained: What Buyers and Sellers Need to Know

Post Closing Occupancy Agreements have become a very common request in the Denver real estate market. We see them regularly, especially in competitive situations or when a seller needs a little extra time to figure out their next move.

Simply put, a Post Closing Occupancy Agreement allows a seller to close on their home and then remain in the property temporarily as a “renter,” while the buyer becomes the “landlord.”

Why Sellers Request Post Closing Occupancy

Sellers typically ask for post closing occupancy when they are:

• Unsure where their next home will be

• Waiting for a purchase to close

• Trying to avoid a double move

It provides peace of mind and flexibility, allowing sellers to move forward with the sale without the pressure of immediately vacating the home.

There is a specific contract that accompanies the Contract to Buy and Sell. This is negotiated upfront and clearly outlines:

• Length of occupancy

• Rent (if any)

• Utilities

• Responsibilities for maintenance and insurance

How Long Can a Post Closing Occupancy Last?

The most common timeframe is around 30 days.

Sellers can request occupancy for up to 60 days from the closing date, and 60 days is the key number to remember. Most buyers are using a loan and must sign a document at closing stating they will occupy the property within 60 days.

• Loan buyers: Maximum of 60 days

• Cash buyers: The buyer and seller can negotiate longer terms if both parties agree

Who Pays During the Occupancy Period?

This is entirely negotiable and often depends on market conditions.

In a strong seller’s market, we may see:

• The entire post closing period granted rent-free

• The first month free, with rent charged for the second month

One important detail for buyers to remember:Mortgage payments are paid in arrears.For example, if you close in March (on any date), your first mortgage payment is due May 1st. Knowing this allows us to structure an offer—often closing at the beginning of the month—to make the timing work in a buyer’s favor.

What About Utilities?

Utilities are also negotiated as part of the agreement.

Common arrangements include:

• Longer occupancy: Seller pays all utilities

• Shorter occupancy:

  • Buyer may cover water (which transfers with the property)

  • Seller continues to pay gas and electricity

Everything should be clearly spelled out in the contract so there are no surprises.

A Word of Caution for Buyers

If you’re a buyer, it’s essential to be fully comfortable with a Post Closing Occupancy Agreement before writing the offer. We’ve seen situations where buyers will agree to anything to get under contract—and then feel frustrated once they close and can’t move in right away.

This is truly a case of short-term inconvenience for long-term gain.

A Great Option for Sellers

If you’re a seller who wants to move but isn’t sure where you’re going next, post closing occupancy can be an excellent solution. It gives you breathing room and flexibility without rushing major life decisions.

And for the record—we’ve never had a client end up homeless.We truly believe that where there is a will, there is a way.