A buyer sleepover, before you buy a home? Well the idea is beginning to crop up all over the country...
Some sellers are offering a buyer the opportunity of sleeping over, in their home, prior to a buyer purchasing the home. This gives the buyer an opportunity to get a "feel" for the home, the area, and the ambience of the property.
But, is this a good idea?
Is this putting the seller's in a precarious position?
Or, you might say, what's the big deal?
Isn't it just like taking a test drive in a car before you buy it?
It's allowing the buyer to experience the positive aspects of the property, isn't it? But, how do you really do that when you're sleeping? Shouldn't it be done during the day, or over a weekend?
On the other hand, it's also allowing the buyer to find out the negatives of the property before they purchase it, too...
Is it just like early occupancy? The buyer takes possession of the property prior to the closing. But, they move into the home, along with their possessions, before the closing. Personally, I do not care for early occupancy arrangements. Often times they can get quite sticky, if the buyer is unable to close or something turns up at the last minute, and the buyer chooses not to close. Then, the seller has to get the "buyer" back out of their house.
On the other hand is a buyer sleepover any different than a lease option? The owner agrees to sell the home at a future date for a specified amount of money. The tenant/future buyer lives in the house for an agreed upon period of time, often times a year and pays the owner rent. Often, a portion of the money is applied as option money towards the purchase. At the end of the specified time period the option to buy is exercised, and the parties proceed to closing.
So, what do you think about buyer sleepovers, are they a good idea or not?
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I have mixed feelings about this. My only experience with this idea is from the HGTV show, Let Me Sleep On It. I have bought 3 homes so far and I don't think I would have felt comfortable sleeping in the house before I bought it, using their things and sleeping in their beds. It might work better for vacant properties, but then the prospective buyer would be sleeping on the floor. But if it will help a reluctant buyer make a decision, why not?
I always recommend against any pre-closing occupancy. A test drive? I think I will see if that catches on...
Hi Richard, I feel like I'm in the middle of the road on this one too. You point out the fact that you are sleeping in THEIR beds...seems uncomfortable to me, also. How would they really get a "feel" for the property, surrounded by someone else's belongings? Hmmm...I haven't been faced with this yet, from a buyer or seller, but I'm sure I will, soon. Have a great day!
Absolutely a bad idea - this is all coming from that show "Date my House" hosted by the guy from The Batchelor - we are professionals conducting a professional business - no one should take possession of any sellers home prior to closing, even if just for one night - if they want to know what is wrong with the home, they should get a home inspection - if they don't like the layout of the home or don't like the neighborhood, they should determine that prior to placing a contract on a home - anything could happen to the home while the 'potential buyers' are occupying the property - I know this is a stretch, but what happens if they have a kitchen fire while "Dating the House"? It would be your sellers home owners insurance that would have to pay for the repairs. There are just too many issues with this idea of dating a house prior to writing a contract/closing. Protect your sellers.
Hi Gary, How are things going over there in Viera and Suntree? I am reluctant to preclosing occupancy also. I had a closing here in Melbourne a few years back and represented the sellers. The buyers agent did a walk through on the home the night before the closing and handed the buyer the key out or the lockbox that night!!!!! Well, the buyers started getting situated in the house THAT night...well my phone started ringing the next morning, an hour before the closing from the buyers agent...with all kinds of complaints on the house. The closing was delayed and it took days to iron it all out......it was a catastrophe! Keep up the good work on your blog - I enjoy reading it!
RE/MAX, You make a great point! Liability is a huge issue. If something did happen, then whose fault is it? Not only a house fire, but what if the potential buyer fell in the home and broke their ankle or something like that? There would be plenty of finger pointing. I think that so much of what we see on TV is truly just for entertainment value. Many of these real estate shows make our job more difficult than it already is...there is just no common sense used in so many of them! And when we try to explain this to our customers, they decide to go out and find an agent that will do what many of these "silly shows" tell them are great ideas. Thanks for the feedback! Have a great day!
I've never seen any of these shows, however, reality TV is not true reality. I think this is a very bad idea. In this sue everyone society in which we live in I would never recommend or agree to such an absurd idea. This is definitely a law suit waiting to happen.
Dorleen, It seems funny to me, all the crazy ideas that are turning up in our industry. Just makes our job tougher trying to explain to a buyer or seller of the legality aspects of the issues. I'm afraid it is only going to get tougher for us, as more and more "entertaining" ideas come on TV.
However folks, it's worth noting that The Villages community, arguably the most successful PUD in the country, has a "sleepover" type arrangement were out of town guests can pay a nominal rent and stay in a furnished model. They get a break versus a hotel room and get to experience The Villages lifestyle.
Since it's more of a rental theme, and the homes are furnished models, it may work out better. Either way it's something new to consider.
Gerry Suarez, Jr.
Your HUD Loan Pro!
Hey Gerry, Interesting...I would imagine that may be a more suitable arrangement, being a furnished "rental" model in a lifestyle community. I imagine that would allow them to get a feel for the community. That somewhat changes the dynamics of the situation, versus a single family home, with an owner's personal belongings in it. Sounds like an overnight rental. Thanks for the comment!
SANDY - It is a novel idea, but one that is best saved for TV shows. Even if a seller were willing to go this route (which I believe is a mistake), what is really accomplished by sleeping in a house for one night? There is so much more that goes into choosing a home than what it feels like to sleep there for a night. I have more thoughts on this, but in the interest of time and space, I will do a seperate post about it.
Hi Adam, I had the same thought...what can you do in your sleep...when you're sleeping in someone else's bed, surrounded by their belongings? Seems silly to me. Just another real estate "passing fad" maybe? What will they think of next?
I have seen articles on it but don't think I would be involved. I would have to check with my E and O guys on this one.
Hi Gene, How are you today? Well, it seems to be a shaky proposition, doesn't it? Maybe a seller setting themself up for too much liability? Thanks for the comment!