Here in Florida typically on the day of closing, the buyer and the seller sit at the closing table and sign their documents. The seller must have their belongings completely out of the property. And, they must be prepared to hand the keys over to the buyer.
Customarily, the buyer does a walk through on the property before heading to the closing, to be sure that the house was as he last saw it. He should be sure that all the appliances and anything extra that was written into the contract is left with the house. And, obviously he wants to be certain that there was no major damage done while furniture was being moved out.
On closing day, sometimes the seller goes to the Title Company first to sign their papers as they have only a couple to sign. When they leave, typically they leave the keys with the Title agent who handles the closing. Later, the buyer goes in to sign their mountain of paperwork ( if they are getting a mortgage to finance the purchase). It can take an hour to get through all of the documents.
When the documents are signed by both parties, and the lender funds the loan, then the title company can release the keys to the buyer. The buyer gets possession of the home that day. The real estate agents on each side of the transaction are given their commission checks and the seller receives his check for the proceeds of the sale, if there are any.
This is a perfect scenario, but, what happens, if things don't go as smoothly as they should?
What if the closing gets delayed, a day, a week, or several weeks?
What if...
The package from the lender isn't to the title company in the proper amount of time?
Or someone forgot to order the survey? And it's needed for closing?
What if there is a named Tropical storm off the coast and the insurance company will not issue their policy until it clears the area?
What happens when the closing gets extended by a week?
And, the buyer has to be out of their apartment the day originally scheduled for closing?
Then what?
The next question from the buyer's agent is, "Will the seller's allow the buyer's early occupancy? Can they move into the property a week early?"
I don't care for early occupancy.
What if something happens and the buyer's loan doesn't close?
What if the buyer's get in, it doesn't close, and you can't get them back out?
What if something happens and an early occupant gets hurt in the house?
What if the house catches fire?
What if they move in and find they don't like the house and change their mind about buying it?
What if an early occupant decides to start doing work to the property, such as painting and tearing up carpets, etc. and then find they can't close?
Then what?
There are a number of things that can go wrong with early occupancy.
So, your closing is delayed, and the buyer's agent comes to you and asks you if the buyer can move in one week early, what do you tell them?
Sandy Shores REALTOR®, Melbourne/Palm Bay FL Real Estate
Brevard County, Florida's Space Coast Real Estate & Investing
I specialize in Residential, Investment & Relocations. I can help with Short Sales and Foreclosures.
I buy, sell, rent, own and manage Investment Property.
that for you
I know that it is hard to tell someone that they can't occupy the property until after closing when there belonging are sitting in a truck somewhere. But if something goes wrong what a issue you will have.
I've faced this before and always advise my sellers to NOT allow for early occupancy. Like you pointed out, there are so many things that can go wrong and in this day and age it's not unlikely that a deal may fall apart at the table and never close. Too many risks just to accomodate someone's schedule. If the buyer knows that they don't have anywhere to go, it's up to them to light a fire under the lender/title company and get it done timely. While I have all of the sympathy in the world for someone in that spot, my job is to protect my seller and their best interests.
Our landlord tenant laws are pretty strict. Our laws are designed to protect the tenant rather than the seller. I require a formal rental addendum before allowing a buyer to occupy. Good post and reminder!
Sorry, but no. I could recount the problems I've seen, but the bottom line is that it is not worth the many risks. The buyer needs to stay on track to close. Then they can move in.
Hi Sandy:
In NJ, we normally deal with the closings being handled through an attorney.
It would depends on how smoothly the transaction went. If it's a vacant property and all went smoothly up to that point, then Yes, a recommendation would be to allow the buyer early occupancy. We would prepare a "Use and Occupancy" agreement at that point and have both parties sign it.
It is never a good idea for the buyer to move in before closing for the reasons you state.
Donna & Larry, Don't you hate that? I've also been in that spot, with a buyer sitting in the driveway of their new home and being told that the closing is being delayed. It's a terrible spot to be in. We graciously asked if they could wait a couple more days.
Lisa, I was in a situation just recently where the buyer, bless his heart was in a hotel. The closing was delayed a few days and we indicated no early occupancy. Everyone of us, especially the buyer's agent pushed and pushed and got it to closing more quickly than it probably would have gone with him in the house early. Great point. I love the perspective.
Hi Paul, Thanks for your feedback, as always - you're terrific! Great way to handle the situation.
Frank, As Lisa mentioned, I do think it often times helps the buyer stay on track and focus on getting to closing. Thanks for stopping by.
Hi Toula, I was curious to hear how others across the country handle this situation. Oh, okay, attorneys handle real estate closings in NJ. So, if it went smoothly to date and the property was vacant then the buyer could go in early. Thanks for your input!
Hey Scott, Thanks for your point of view - it can certainly open up a huge can of worms.
Sandy, Your points are duly noted and I generally agree. Although every transaction is different and with the "right" parties and circumstances I can recommend move-in. But it is the exception for the reasons you stated and more.
You must lay out the pros and cons for the client and let them decide.
Sandy, Interesting question and not being a RE Agent it's something I never thought of. I agree with you about moving in early, there are MANY things that can go wrong and I personally don't believe it's a good idea.
Sandy, it's a NO, NO!
Steve, Valid point - every transaction is different and every set of circumstances are different. Each situation should be considered on a case by case basis.
Suzy, Yes, the sellers should be provided with the pros and cons of the situation.
Hey Miss Carole, Thanks for your perspective. It is an interesting question.
Thanks Kevin! I love your turkey, just in time for Thanksgiving day! Have a great one!
Sandy
Early occupancy can turn into a nightmare.
Good luck and success.
Lou Ludwig
Hi Sandy, After pointing out all the problems that could arise it's up to the sellers. I've only had one buyer ask if they could move their things into the garage early, and the seller's said no. Happy Thanksgiving Sandy!
Hi Lou, It can turn into a nightmare. There are so many things that can go wrong. So true!
Hi Mary, Ultimately, it is up to the sellers. We've had buyers ask to move in early and we've also had buyers ask if they can move their belongings in early too. Thanks, I hope you have a wonderful Thanksgiving also.
I've seen at least 2 occasions in the last few years where the buyer's loan was denied at the last minute but the buyer had already moved into the property. Luckily neither one was on a deal I had listed. Both of them ended up with very ugly evictions. What a mess.
Hi Rob, Today that is a very real concern, where the contract falls apart at the very last minute. With early occupancy what do you do then? I bet those were very ugly situations.