Should You Consider a Post Occupancy Agreement

Real Estate Agent with Buyer's Edge Company Inc

A post-occupancy agreement happens when a buyer & seller agree to allow the sellers to stay in the property after settlement. 

woman sitting on a couch with her dog

Photo by Roberto Nickson (@g) on Unsplash

When it goes well, the seller leaves the property on or before the agreed upon date. The buyer completes the final inspection with their buyer's agent and finds no problems. At that point, buyer & seller agree to release the security deposit funds (security deposit from the seller held in escrow by the settlement attorney) and everyone is happy! 

But the post-occupancy agreement can get complicated and messy especially when the buyer and/or seller don't understand how it works. So here are the main points to know before you sign a post-occupancy agreement.

  • There is no landlord-tenant relationship in a post-occupancy agreement - This situation is unique because the seller has now agreed to rent back the house they sold for a brief period of time. Most post-occupancy agreements can be no longer than 60 days. The seller is not a tenant and the buyer ( new homeowner) is not a landlord. I recently talked to a seller who was renting back for a couple of weeks. She said she "knew her rights as a tenant". However, the post-occupancy addendum she signed clearly states that the seller has no rights afforded to tenants. 
  • The agreement usually covers the cost of PITI - The buyer and seller agree to the cost of the rent back. Usually, the money covers the Principal, Interest, Taxes, and Insurance that the buyer (now the owner) would be expected to cover. This money is deducted from the Seller's proceeds at settlement.
  • A security deposit is provided by the seller - The security deposit is held in a non-interest bearing account by the settlement attorney. At the end of the agreed upon time, the buyer walks through the property to verify the condition. The seller should leave the property vacant, clear of trash and debris, broom clean and in the condition required under the terms of the Post-Occupancy Addendum. 
  • The Seller agrees that the Buyer may enter the property - This is the stickiest part of the agreement. In a perfect world, the sellers and buyers get along and agree to allow access to the property for reasonable requests. Reasonable is the key word here! If you have buyers who want access to the property and the sellers don't want to let them in-you've got a problem! The sellers have a right to their privacy. The buyers have a right to access their property during reasonable hours of the day as long as they give the sellers prior notice. Keeping this balance can be very challenging. 

Before entering into a post-occupancy agreement, ask yourself these questions

  • Are you expecting to bring many contractors into your new home to get estimates for work? - Once or twice may be fine but don't expect to disrupt the seller's privacy for your own convenience. If the work can wait, then wait until the post-occupancy agreement time period is over. 
  • As the seller, do I understand that I no longer own the home and the new owners may need access to the home? - Yes, you have a right to your privacy but you also have signed an agreement saying the new owners can access the property to examine, maintain, repair and/or protect the property from damage. 
  • Buyer or Seller- can you keep your emotions in check? - Buying and selling a home can be a stressful time. Emotions are high since the seller is leaving their home and the buyer is hoping to coordinate their move and prepare their new home. As is often the case with a post-occupancy agreement, the seller is also timing the purchase of their next property. 

Lots of moving parts to this scenario!

Take a breath, be compassionate and consider the other parties feelings and situation. Buyers and Sellers can move confidently ahead and work together toward an amicable end to the post-occupancy agreement. 


Posted by

4849 Rugby Avenue Bethesda Maryland 20814 office 301.657.1475 cell 301.922.1677


Victoria Henderson is Vice President & Associate Broker with Buyer's Edge, Exclusive Buyer Agent & Realtor in Virginia, Maryland and Washington DC. Victoria is a certified Military Relocation Professional 



Marshall Henderson is a Certified Negotiation Expert & Exclusive Buyer Agent with Buyer's Edge & Realtor in Virginia, Maryland and Washington DC

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Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

I've done pre and post occupancy arrangements, but rarely. The potential liabilities need to be carefully assessed. Fortunately, I've never had one of those arrangements that didn't work out well. 

Sep 24, 2018 12:15 PM #1
Jeanne Gregory
RE/MAX Southwest - Sugar Land, TX
The most important home I sell is YOURS!

Texas uses a seller's temporary leaseback which pretty clearly spells out the obligations of each party.  But still risky if someone takes an adversarial position. 

Sep 24, 2018 01:14 PM #2
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

I've done a several of these with clients on both the buyer and seller side and they worked out well, thankfully. But both parties need to clearly understand and agree to the terms and conditions in writing.


Sep 24, 2018 06:09 PM #3
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

While I'm not an agent it does seem to me that something like this opens a lot of doors for problems UNLESS everything is spelled out clearly to both parties and they clearly understand the agreement. 

Sep 24, 2018 06:47 PM #4
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

If one knows how to wield a tool or a product correctly...get to work! Richfuscious

Sep 25, 2018 06:41 AM #5
Lindsay Reagan, Realtor
Bowen Realty - Wellington, FL

I have done worked out great!  We let the seller stay in home for 2 weeks after close so his kids could finish the school year.  The other one..not so good.  The sellers left new buyers a toilet that was not working in the master bath...said they were unaware it didn't work.  They also took the garage door openers and tried to ransom them back to us!  Last laugh was on them though..the seller left a 'treasured" Walt Disney mug in the microwave...

LOL...we held the mug ransom until the toilet was repaired and the door openers were returned.    

Sep 25, 2018 06:03 PM #6
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

This sounds like a situation to avoid, if possible.

Sep 27, 2018 12:30 PM #7
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

If it can be avoided, don't participate in a post occupancy situation. Even letting the sellers remain a day or two after closing can cause problems. If this was a perfect world with "reasonable" buyers and sellers, there wouldn't be an issue. But anything that can go wrong, sometimes WILL. #murphyslaw 

Sep 30, 2018 10:32 AM #8
Melissa Spittel
Coldwell Banker Residential Brokerage - Westminster, MD
"Achieving Results Together "

Just closed on a property last week that had a post-settlement occupancy agreement in place. Long story short, my client decided to sell her house because it had a tax lien on it that she could not pay. Rather than losing the house, she decided to sell. Her plan was to find a place to rent after closing, but needed to wait until she received her proceeds from the sale. The generous buyers agreed to a 30-day post occupancy for the sum of $1.00 total, with a security deposit that will be returned after the seller moves. Buyers had a lot of concerns the seller would not move out and they would be forced to have her evicted. Fortunately, she found a place and will be moving next weekend.

Oct 01, 2018 10:55 AM #9
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

I think these types of agreements can lead to lawsuits. What if the furnace stops working? It is the new owners responsibility, but if they are not living there, they may not be super motivated to pay the extra cost of having it repaired immediately. WHat if there is damage not covered by the security deposit? The seller already has their money. How long will it take to get it from them for damages? So no, this is not a practice that I encourage any more than the buyer moving in before the closing. A few bad apples spoil it for everyone else 

Oct 07, 2018 07:52 PM #10
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