Just read an interesting blog entry about sellers keeping possession of a house for 30 days after closing, and then not moving out. since there was no lease in place they had to be evicted which took several months. Ouch! We debate the "possession after closing" quite a bit in Colorado, because in some communities here it's traditional for the seller to keep possession for up to 3 days after closing. In fact, in the MLS for northern Colorado, you can put an entry in a listing that says "possession 1-3 days after closing"  As an agent this always drove me bonkers! The listing agents would insist that they did this to protect the sellers. "After all", they would insist, "What if the closing falls apart at the table?. The sellers have had the expense of moving out." I'm sorry, but if loan approval (in Colorado we have "loan commitment") happens at least a few days before the scheduled closing date, and the sellers have repaired and cleaned as stipulated in the contract, then there is no reason for a deal to crash at the table.(I know it can happen, but it's pretty darn rare.)

Meanwhile, let's look at the problems that are created. #1: The sellers are now living in a house that doesn't belong to them. Should they pay rent for 3 days? #2: How about a security deposit? Damage often happens when furniture is being moved out. What if the movers slip with a large piece and put a hole in the wall or tear off some trim? Yes, the mover should be responsible, but who's going to handle the details? Remember, it's not the sellers house anymore, and they may be headed for Florida or New Hampshire. Good luck getting them to keep after the moving company. #3: What if the sellers suddenly don't get loan approval, so decide not to leave? (See example above) Every state is different, but even if the buyer has a clear legal right to the house there are a number of steps that must be taken. While that's happening, we often have a homeless buyer. #4: How do you do a walk through inspection before closing with a family still in a house with all their belongings? How many of us have found hidden damage after sellers moved out? I once found an entire can of red paint spilled on the wall to wall carpet that had been under an area rug. The sellers didn't say anything - maybe they thought we wouldn't notice!

I have a suspicion that the whole concept of possession after closing is left over from the days when everybody worked for the seller. If you've only been in the business a short time, this come as a surprise to you, but that's how it used to be. There are times when it's a useful tool, such as a seller having a new home built, but be careful! If it's the only way to put a deal together, spell out all the details, get a security deposit, and escrow funds at the closing against damage.