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Handing over the keys...

Our moving day is set for July 18th although our actual closing day isn't until August 3rd (a Friday of a long weekend). The other day I came home to find a message from the people that have purchased our home. They were asking if we could make arrangements for them to get the keys on the Thursday evening as they are having movers (they are coming from Manitoba) and would like to start unloading first thing Friday morning.

"Huh...was I hearing this right? They actually wanted the keys to the house before it closed?" They even went as far as to say that they didn't want to go to the hassle of getting the lawyers involve to change to change the closing date.

Don't worry, about a million alarm bells went off. There was no way that I would hand over the keys to the house before the lawyers and done their thing and the money was in my account. I am no real estate guru but I know enough that to do such a thing could potentially cause some huge liability issues if anything was to go wrong.

Got me thinking, how many people HAVE handed over the keys before the lawyer's OK? What nightmares have been created when someone harmlessly thought they were helping the new owners out?

If you have a story I would love to hear it.

Posted by Lucie Quigley on 07/09/2007 08:59 AM

Comments (13)

closing dates, lawyers

Post is included in group: Nova Scotia Real Estate

13 Comments on Handing over the keys...

JUL

2007

You made the right decision. I wouldn't give the keys over either. I would give them to the closing agent but that is it. That was agood question. how many people would give the keys over to a potential buyer?

I had a buyer once that wanted the keys before the closing which was to fund everything (a couple of transactions back). I had the keys. I also had instructions from the settlement agent NOT to hand them over until the twice-removed transaction occurred. Was my client upset with me? Yes. Did I lose future business from that client - probably. Did I hand over the keys before I was supposed to do so? NO! All I could picture was handing the keys over and then having that far transaction fall through. Then we'd have to pry the client out of his new home - too messy for me.

I've had it twice where the buyers wanted to move in early so we did a Buyer's Temp Leaseback. It's the same as the seller's lease back for after closing, but this covers what happens during a buyer moving in prior to closing. I do not like them because you never know what can happen with a loan, though the two times it's happened with me, they were very smooth. I had buyers who wanted to do most of the updates before moving in and they were closing on their current house simultaneously and had no other options to get new carpet and paint and counters and cabinets in the house without living in a hotel for a couple of weeks. The seller was protected about how if the buyers loan fell through, the seller was able to keep all the improvements at no cost and the buyers could not reclaim any improvements they did. Sounded fair...

But in your case, where they think they can just move in and not pay your mortgage payments until closing, how ridiculous...

I have done the leases and actually did this on the purchase of my own office. We rented for 6 months before we closed. The seller was carrying two properties and we needed to sell some stuff to generate the whole down payment. We actually extended the closing a little so the seller could escape a pre-payment penalty. It worked fine, but was fully documented.

I would suggest that the buyers might be willing to increase deposit and make it non-refundable prior to possession??

Lucie -- I can really relate to this post. When we sold our first house in CA, we were dealing with a relocation company. They cashed us out but allowed us to continue living in the house until our scheduled move. We would not be involved in the closing at all and would be out of the house a week before closing. A week prior to us moving out, the buyers stopped by and asked for a key to the home so they could start moving stuff in after we moved out. That was 20 years ago and I was naive and trusting so I willingly gave them a key. After I had done that, I realized that may not have been the smartest thing to do. Even though we technically no longer owned the house at that point, we could be held responsible if the closing fell through. Luck was on our side because it was fashionable, in that area at the time, to have security bars on the doors and windows. I hadn't given them the key to the front door because we always just locked the security gate so that is the key I gave them. Per my realtor's advice, I locked the front door and then called them to explain the reason for doing so.

Twenty years later, after selling another house, I was quick to answer a firm "No" when again requested that we provide a key before closing. I explained that they would receive a key only when the house legally belonged to them.

When you give me the money...I give you the keys...Period!!

JUL

2007

Hi Lucie! What a great conversation to have over a glass of wine! The risks involved are HUGE! And accidents do happen - that's why they are called accidents!

I recall 2 catastophes which happened to Realtors in my office:

1st: Buyers moved items into the attic - not a lot, just a few! Huge rainstorm over the weekend and on the walk through they discovered the roof leaked and their items were mush. Lawyers loved that one.

2nd: A home was rehabbed. The buyers moved their items into the garage and planned on staying in the house for just 1 night - their property closed on Thursday, the new house closing was scheduled for Friday. The Seller could not get a certificate of occupancy because the windows were not up to code - egress issues. Building Inspector was furious with builder for the code violations. The Seller's & Buyer's agents went to the town hall and asked the building inspector if the buyers could at least get their toothbrushes and some personal items out of the garage. Building Inspector said "No - and if we see anyone on the property they will be arrested!" Buyer's & Seller's agents put Buyers up in a hotel and paid for personal hygiene items. Buyers were upset with everyone. Windows had to be ripped out and replaced before Cert of Occ was issued. Lawyers really loved that one.

Hi Lucie,

I totally agree with Pam. When I get the money, you'll get the keys!

Good Luck!

Lucie, When we sold our last house the buyer asked for a key before we had actually moved out. Of course our astonished answer was NO. What made this even more disconcerting to us was the buyer was a real estate agent. Who would have thunk?

Keys - money money - keys - you did the right thing!

JUL

2007

We have an addendum , with hold harmless clause that we use for possession before settlement. I do not like to do it, but I have seen it done.

DON'T DO IT!! I was a real estate paralegal for 5 years and I can tell you that until all sign all the docs at the closing table the transaction DOES not officially happen. Last minute judgments and liens can come up that are against the seller/buyers, funds can be short, etc. Also buyers go in and inspect every aspect of the home and may present problems for you at the closing table.

Just the other day, friends of ours went on their final walkthrough and were literally 1 hr away from the closing when the WHOLE DEAL fell thru. MOLD was found in a small area in the attic and killed the deal. IT AIN'T OVER UNTIL THE FAT LADY SINGS...the NEW owners get the keys, when the OLD owners get their money..God bless in your new home.

Phyllis Pafumi

JUL

2007

hey lady

you made the right decision! it's shocking people would actually ask to do such a thing, but judging from this post it happens quite often :) congrats on your sale!

cheers,

ciny

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