What Is a Post-Closing Occupancy Agreement?
A post-closing occupancy agreement—often called a rent-back agreement—is a short-term contract that allows the seller to stay in the home after closing. In real estate, this agreement outlines the terms for how long the seller can remain, how much rent will be paid, and who is responsible for insurance and utilities during that period.
How a Post-Closing Occupancy Agreement Works
When a buyer and seller close on a property, legal ownership transfers to the buyer. However, if the seller needs extra time to move out—perhaps waiting for their next home to be ready—they can negotiate a post-closing occupancy agreement. This document specifies:
- The move-out date or number of days the seller may stay after closing.
- The rent amount or daily occupancy fee the seller will pay to the buyer.
- Responsibility for utilities, maintenance, and insurance during occupancy.
- Any security deposit or escrow hold-back to protect the buyer.
Because ownership has already transferred, the seller becomes a short-term tenant and the buyer acts as a landlord until the agreed date. This arrangement should always be in writing and signed by both parties before closing.
Why FSBO Sellers Use Post-Closing Agreements
For For Sale By Owner (FSBO) sellers, a post-closing occupancy agreement provides flexibility during tight moving timelines. It allows a seller to complete one transaction before moving into another home—without rushing to vacate on closing day.
This type of agreement is especially useful when the home is already under contract and the buyer agrees to a short rent-back period. While convenient, it’s important to clearly define responsibilities and liability to avoid disputes after closing.
Since the buyer now owns the property, they hold equitable interest and full legal title. The seller’s right to occupy is temporary and must end by the date in the agreement.
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