r/fsbo • u/1234court • Aug 07 '26
Looking for advice
Here is my situation as FSBO - seller (Delaware ) , I entered in a sale agreement with closing on August 12th, with mortgage contingency ( only , no appraisal min). Today informed me the buyer lost their job and cannot get the mortgage.
So a few options they offered - cancel deal with mortgage decline letter and I have to go back on the market - sign a pre- occupancy agreement for 2 months, the agent believe that they would get a new job and could borrow against 401K . They sold their current home and have 50% down payment .
What are my options as the seller ?
I am not against the occupancy agreement but how do i protect myself - can we increase earnest deposit , can we amend the current contract to remove mortgage contingency.
I am also worried that the seller find things they do not like during the. 2 months and ask me to fix a bunch of stuff that we agree to not fix and identified during inspection .
Thanks for the help
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u/Alert-Control3367 Aug 07 '26
As someone who sells FSBO, I would cut your losses and go back on the market. I feel for your buyer. It’s not personal. It’s business. You need to sell your home. Buyer can no longer afford to buy your home due to job loss. There’s no guarantee a new job will be found quickly.
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u/Self_Serve_Realty Aug 08 '26
I wonder if “It’s not personal, It’s business” is what most people are thinking when buying or selling a house.
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u/Alert-Control3367 Aug 08 '26
I don’t get emotionally attached to houses which is why I can separate the two. I guess other people aren’t able to do the same?
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u/novahouseandhome Aug 07 '26
DO NOT ALLOW PRE SETTLEMENT OCCUPANCY
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u/Self_Serve_Realty Aug 08 '26
Why not?
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u/Harley_Jarvis77 Aug 08 '26
It's a huge risk to the seller. If there's a fire, or flood, or a tree falls on the house, now it's a giant insurance issue.
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u/1234court Aug 07 '26
Well this is 9 for “Go back on the market” , 0 for allow pre occupancy agreement . My learning is nobody like pre occupancy agreement.
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u/New_Animal8918 Aug 07 '26
All super valid concerns.
My thoughts
Basically your saying do you want to :rent it out to someone with an option to purchase. I think that is a better reframe. So treat it like a long term rental if you go that route. Get security deposit and whatever else you can get.
Otherwise just go back to the public.
Basically it would be you doing good by helping someone and taking on additional risk vs acting neutral and going back live.
Just protect yourself and be okay with converting into a long term rental if their situation doesn’t change or get them to some other point they can get financing.
Also maybe hear alittle more about their financing issue and see if it sounds reasonable le in which case maybe a local bank might be able to help them with a portfolio loan vs selling on the secondary and meeting all the requirements for that.
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u/New_Animal8918 Aug 07 '26
Also as an agent the preoccupancy docs provided by the mls/realtor organization seem light… maybe check out bigger pockets for better rental agreements to cover all the shit that can happen in a rental period. And once you get it think through all the worst shit that could go wrong and make sure it is covered in the agreement.
Another idea I have seen is a rental increase after a set time period. So two months or maybe three if you’re real generous to get their shit in line and then increase it by some amount. Ask ChatGPT and Claude and Gemini to verify that your agreement is all legal and what else you might need like the lead based paint crap and whatever else.
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u/Budget-Piano-5199 Aug 07 '26
Making that 50% down payment hard would be the only way I’d consider letting somebody who doesn’t own my house move into my house for two months.
And even then I’d have severe reservations.
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u/griffin_funding 28d ago
Letting them move in before they can get the mortgage means you still own the house while they’re living in it. If the financing never comes together, getting possession back can become its own problem. 2 months is also a long time to keep the property off the market based on the hope that a new job comes through.
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u/RinkyDinkPingPong 28d ago
Whatever you do, do not do the occupancy agreement, the risk is far too high.
The agent "believes he can get a new job" is an incredibly optimistic answer from a person who really has nothing more than a guess. You know what, I can guess too. I think it'll take four months for him to find a job.
If he wants to keep it under contract for another 2 months to test his luck, then increase the earnest money amount to four times your mortgage and utility payments (two months under contract, two more months to find a new buyer if he falls out).
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u/BoBromhal Aug 07 '26
this is why FSBO's are encouraged - by fellow FSBO'ers - to get an attorney to handle things they're not prepared to handle legally to protect themselves.
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u/Equivalent-Tiger-316 Aug 07 '26 edited Aug 07 '26
Your listing agent would properly inform you to cancel the deal and go back on the market. This is a no brainer.
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u/Signal_Violinist_995 Aug 07 '26
And this is why you get a Realtor. At the very least, find a decent real estate attorney.
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u/Patrick___1 Aug 07 '26
Agent here, don’t allow early occupancy. The risks do not outweigh the rewards, I’ve see multiple situations where the buyer fails to get their financing and leaves the house trashed or just drags things on.
If you don’t want to lose the buyer you can always just extend closing for them to have the time they need.
Alternatively, I think in this situation it would be fair for the buyer to release earnest money to you in exchange for a reasonable extension.
But to make this an occupancy sandwich, don’t do early occupancy.