Moving in After The Transaction is Completed
The last step in purchasing real estate is called possession. This is when you get the keys and the previous homeowners have moved on, leaving you in your new home. If the prior owner asks to stay in the home for a period of time after closing, your first reaction might be to be open to it and go along. You may approve or reject the buyer’s request, but before making your decision, there are some things to consider.
When There is a Request for a Possession Delay
Sometimes just before closing, a seller might ask for time in order to take care of clearing out of the house, or to clean up loose ends related to the move. Though such a request may seem perfectly in order, you must proceed with caution. If the buyer decides to allow the request for extension, they must, at least, be made to pay rent for the extra days, and that part of the transaction has to be documented.
There must be a limit on the time the seller can stay in the property beyond closing, and it needs to be in writing. An agreement between the buyer and seller setting forth the details of the after-closing possession can be provided by the real estate attorney or, in states where attorneys are not part of real estate purchase contracts, usually by the escrow officer.
If the seller announces at closing that he or she has to stay in the house longer, it is generally a good idea to reschedule closing until such time as the seller can vacate the premises or acceptable legal documentation has been written and signed.
Why is Seller Possession Following Closing a Big Deal?
Once you complete the purchase of a property, it belongs to you. It is your legal responsibility. This is true even if it is still occupied by the person who used to own it, your seller. If your tenant causes a fire, it is your responsibility. The seller will not have to pay for any of the loss unless it is clearly included in the after-closing possession agreement.
Additionally, sellers who stay in possession of the property after closing have less motivation to take good care of the property and make repairs or do maintenance that are necessary. When the contract closes, you are accepting it in the condition it is in at closing.
Whatever damage that occurs to the home after the closing falls to the buyer, not the seller. So if the toilet or bathtub overflows or a furniture mover scars a wall or kitchen tile, you will end up paying out of pocket to repair the damage.
Another common problem with having the seller keep possession of the property beyond the closing date is that items that should remain with the home, such as the air conditioner or the water heater, can disappear between closing and the time the buyer eventually takes possession. Even when something as farfetched as this happens, and you suspect the seller of theft or negligence, it is your responsibility as the property owner to take the loss or, at most, prosecute for a recovery.
When you own a home, you must be in full control of it. This fact is simple to see when you are considering to answer the doorbell and admit a good friend. It is still a good approach when you are asked for a delayed possession in the final hours of the purchase transaction.
Information presented through Automated Homefinder, Colorado’s Denver real estate experts.