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What is a Post-Closing Possession Agreement in New York city real estate? We will demystify this topic in the following video. I'm Nick at Hauseit, New York City’s largest For Sale by Owner and Buyer Closing Credit company, established in 2014. If you liked today's video, we'd love for you to subscribe and like the video. And if you're looking to buy or sell in New York City and you're interested in saving money on Commissions give us a shout. Check out our website https://www.hauseit.com or feel free to send us an email, team@hauseit.com.

Now let's get started, so what is a post-closing possession agreement? You may also have heard of this in a different terminology such as a sale-leaseback agreement. Well in essence both of these phrases mean the same thing. In a post-closing possession agreement or a sale-leaseback the seller of the property is allowed to remain in the property that's been sold for a period of time after closing.

You may be asking: "Why on earth would that happen?" If somebody sold their place don't they want to move out? Well there are a number of reasons why a post-closing possession agreement might make sense. In particular it makes sense when the seller doesn't necessarily know where they're going. The seller might be still in the process of looking for a new home or the seller might have already bought a new place but they're currently undergoing a multi-month renovation that has a number of months left to completion.

Therefore, a post-closing possession agreement really is originated on the side of the seller. The seller asks for it and during the course of a negotiation with the purchaser a decision is made as to whether or not the parties will come to a meeting of the minds and whether or not the purchaser will be okay with it in principle and whether or not the purchaser will be okay with the specific demands associated with the post-closing possession agreement and we're going to go over those right now.

The most important components of a post-closing possession agreement in New York City consists of the following. The length of the post-closing possession agreement. The escrow amount associated with the sale-leaseback. The costs of the post-closing possession agreement. And finally, the costs of the holdover fee.

The typical length of a sale-leaseback in New York City is anywhere up to two months. Most lenders are relatively uncomfortable with anything longer than this so, the maximum you'll probably see is three months but it's usually highly improbable for a post-closing possession agreement particularly for a condo or for a co-op or for a home that's being financed to be any longer than two or three months.

The cost of a post-closing possession agreement is completely negotiable but in general it is a cost that will usually be similar to the actual mortgage payment and the carrying costs associated with what the purchaser is going to pay in the future. More specifically if upon closing the purchaser owes $4k a month in the mortgage and $2k a month in the common charges, the total cost to the purchaser is $6k a month.

So naturally if the seller remains in the property after closing the purchaser would need at least $6k a month. But seeing as it's negotiable depending on the course of a negotiation the purchaser might accept less than that or they might require more it is completely dependent on all of the specifics associated with a particular transaction. Such as the price that the purchaser is willing to pay and the genuine need of the seller for the post-closing possession agreement.

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