A:

No, the seller can stay in his current house under the terms of a POSSESSION AGREEMENT.

In situations where a Seller needs to close on the sale of his current residence to use the proceeds for his purchase, the seller tries to arrange for his buyer to allow him to stay in after the closing date.  The parties sign a Possession Agreement which gives the seller the right to stay in the home for a set period of time after the closing.  The agreement should indicate how long the seller can stay, the cost of staying (per diem amount) and the amount of sellers money being held to insure that the seller turns over the house to the buyer timely and in proper condition.  The length of time the seller can stay after the closing needs to be worked out between the parties but normal practice is about 5 days.  The cost to stay is usually based on the buyer’s carrying costs (mortgage interest, real estate taxes, water/sewer, common charges, insurance) and a penalty is imposed should seller stay beyond the date agreed to.  The escrow amount depends on the cost and type of house but the longer the possession period the higher the escrow.  The parties should agree on a time to meet for the final inspection after the seller has vacated.  If the seller leaves on time and the house is in proper condition the buyer will sign off that possession has been properly transferred and the escrow deposit can be released to the seller.

GOOD PRACTICE TIP:  Buyers should do a walk through inspection the day before the closing and make sure that any contract repairs have been completed.  The parties should ask that their realtor attend the walk through before the closing and the final inspection when possession is given so that any questions about the home’s condition can be explained to attorneys by the broker.