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Should I Let The Buyers Move In Prior To Closing?

By
Real Estate Agent with Transaction Alliance 513.520.5305 www.LizTour.com SAL.2002007747

Normally the advice from me to my sellers would be a flat out NO NO NO NO!!!!!!!!

move in?

And the reason for that recommendation is all related to risk.

There's ONE good scenario and more than a few bad ones that can come into play if a seller allows the buyer to move in prior to closing.

If all goes well, it all goes well.  The buyer moves in a bit early on whatever terms are acceptable for the seller and buyer and we go to closing on time, all the paperwork gets signed off and the buyer becomes the owner.

But if things go wrong, they can go VERY wrong.

  • What happens if the buyer does something to the home prior to closing?  Will they fix it or will they expect the seller to do it?
  • Does your homeowner's insurance cover you if there's a "tenant" in place?
  • If the closing falls through for any reason, how quickly will the buyer get out of the home?  Will he or she leave willingingly or will you have to use the legal process to get the buyer out the door?
  • What if the buyer loses his/her job?  Has a bad accident?  Some family emergency the prevents closing the home on schedule?

So obviously, the prudent thing to do is say no.  Here's what the purchase contract says and we can agree to close early if everything is in place, but we don't want you in early. 

Is there something else the buyer can do to address the reason why moving in early is needed?  (move into a hotel, rent a storage unit, etc.).

However, all that being said, sometimes as humans we DO want to help, so there are things a seller can do to protect themselves:

  • Get it in writing. Utilities. What the buyer can and can't do to the home, etc.
  • Homeowners insurance coverage and renter's insurance in place.
  • Limit the time period.  Can it be for AFTER the buyer's clear to close notice has been provided by the buyer's loan officer?

If you can limit your risk and you're already out of your own home, perhaps letting the buyer in early isn't a total NO NO NO!!!! situation.

But do be careful.

Questions about buying or selling real estate in the Cincinnati/Dayton corridor?  Just give us a call at 513-520-5305 or email Liz@LizSpear.com.

We look forward to hearing from you!

Liz and Bill aka BLiz

 

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Serving Warren County Ohio & Adjacent Areas

The Liz Spear Team of Transaction Alliance
Elizabeth Spear, ABR, Ohio License SAL.2002007747

William (Bill) Spear, Ohio License SAL.2004011109  Kentucky 77938
Ask for us by name if you visit the office!

EHO
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Comments (13)

Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-739-3843

Bliz, this one just came up for me recently. Not usually, but very occasionally there is the juggle between dates. My buyer has very few items she's moving down the street (literally) from a very small cabin to a  very large log home. My sellers decided to say no to moving stuff "in", but when my buyer asked if she could put things in boxes and place them on the vast and covered deck they said sure. 

So...it is case-by-case, I guess. 

Good rule of thumb, tho, I'd say is No. 

Jul 22, 2016 08:15 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

BLiz

Anyone considering letting the buyers move in early should read this. I would normally say no, and the RE attorneys I worked with back East were vehemently against it. There are some protections but plenty of risks, as you point out. I did have one situation here where sellers agreed to let buyers move some things into the garage and we had a careful agreement drawn up.

Jeff

Jul 22, 2016 08:48 AM
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Bill - we have always strongly recommended against that as a terrible idea. That said, we're selling one of our rentals, and it's closing at the end of August. We let our client move in early because he's a long-time good client and his loan is already approved, all contingencies are met, we're covered in writing as well as we can be, and the August closing was our need to accommodate a 1031. Even so, we're going to be worried until it actually closes.

Jul 22, 2016 09:28 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Gayle, It's mostly NO with the occasional exception.  A pod in the driveway?  Probably okay.  Maybe garage storage.  But next week, a seller is allowing 2 day prior move in, but we have clear to close already.

Jeff, We've had that once or twice, and it needs some stipulations like , don't store combustibles!

Dick, Once in awhile it'll make sense to do it, but usually it's not something we'd recommend our sellers consider.  We'd rather juggle closing dates if possible.

Jul 22, 2016 11:06 AM
Rob D. Shepherd
RETIRED - Florence, OR
RETIRED

NOOOOOOOOOOO!

Jul 22, 2016 11:19 AM
Anita Clark
Coldwell Banker Access Realty ~ 478.960.8055 - Warner Robins, GA
Realtor - Homes for Sale in Warner Robins GA

Bill: I always recommend no to my sellers. There are just too many things that can go wrong before closing.

Jul 22, 2016 11:24 AM
Debbie Holmes
John L. Scott - Boise, ID
Gets the job done!

It ususally works but when it doesn't it is horrible.  I like to wait until  closing.

Jul 22, 2016 09:53 PM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Rob, Once in a great while it might be a qualified "maybe!".

Anita, We're in the same boat, almost always it's a no, but sometimes it can be worked out to the benefit of both sides.

Debbie, From a practical standpoint, it SHOULD be fine, but it only takes once to make it a very, very bad experience for the sellers and agents.

Jul 22, 2016 11:52 PM
Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

Liz and Bill Spear I usually recommend no, as well.  There are have times, thought not often, sellers have allowed buyers to have some things delivered and stored in the garage prior to closing.

Jul 23, 2016 05:15 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Elyse, it's a balancing act, does it make sense and is the risk low enough.  Usually those answers will point to NO.

Jul 23, 2016 10:14 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Back in the Day , this was an absolute NO NO ! It seems that more recently agents have a different attitude .

Jul 24, 2016 12:02 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Michael, I think it's still generally a NO, although for the first time in years one of our sellers is agreeing to a two day early move in.

Jul 24, 2016 07:02 AM
Claude Labbe
RLAH / @properties - Washington, DC
Realty for Your Busy Life

I've got to agree...it's NO! NO! NO! with an *

The * says that at times, circumstances can flip that NO! NO! NO! to a reluctant Yes.

A few weeks ago, someone in my office was having a problem with a fuly approved buyer, yet the seller was having an IRS issue which was preventing the settlement from occuring.  My suggestion was to write a lease to allow the buyer to get out of the hotel she was in and into the home. While I was reluctant to suggest that, later in the week, my colleague told me that both sides had agreed to the pre-settlement occupancy.

Aug 10, 2016 04:32 PM