Last Updated May 18, 2009 3:59 PM EDT
I will be closing on the sale of my place soon, and the buyer and I have discussed a post-closing occupancy agreement that would let me stay in the apartment for a few extra weeks after closing. (We are rushing the closing date because the buyer's rate lock is expiring.) What are the pros and cons to this type of arrangement?
A: The main risk of a PCOA is to the buyer, not to you. The buyer has presumably inspected the property right before closing -- and bought it in that condition. What's his/her recourse if you trash the place?
As a seller, I would be most worried about insurance. If you are no longer an owner, presumably your old insurance agreements are no longer in force. Similarly, it's not clear that the new owner's policies -- which were written with the idea of him or her becoming a primary resident in mind -- will cover the issue of liability if you're a tenant and suddenly fall down your old stairs.
So I'd check in with your insurance agent to make sure that they're okay with you staying. If that's the case, then all you have to do is nail down the price of the extra days with your buyer.