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Buyers Possession Prior to Closing

Published by cravat | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs, Uncategorized

Pros and Cons

Ownership of a property often changes from seller to buyer at closing but in some cases a property buyer asks the seller to grant possession before closing. Here is the usual request when the buyer must move before a loan can be processed. Sellers make the last decision as to whether an early buyer possession make sense for their dealings but you will find that seller’s agent hardly ever encourage the situation. A lot of things can go wrong. – The mortgage might never be approved or the sale might stand stall for other reasons. Then you are back to square one, trying to get hold of another sale but this time with a renter in a place. In a perfect scenario, the former buyers would leave but property agents will tell you that sometimes it is necessary to take legal action to eliminate them.– The buyers might feel the property is already theirs and start to make alterations – sometimes changes you would not like. If the property does not close, you may be trapped with their “improvements.”

– The buyers start to make a list of unnecessary “repairs” before closing. Usually these are not truly repairs, they are simply things a potential buyer would like to see modified. This can be especially annoying if you already gone through the inspection and maintenance procedure.

– The most terrible case, the potential buyers may scrap the house. People who try to do that sort of thing are hard to gather damages from.

If you are to be in agreement to early buyer possession, it should be treated with a written contract that covers the duties and responsibilities of both parties. Most property agents have access to the standard contract addendum that covers early buyer possession. If you prefer, a lawyer can prepare a draft document.

Importance for Early Buyer Possession

– Phrases should include details about what will occur if the sale does not close on time or never closes.

Consider all these:

– How much time do buyers have to leave? What are going to happen if they do not?

– How much lease will the buyer pay and when is it due? Do you want a security deposit?

– Buyers must completely agree that they will not alter the home without proper approval of the owner. If closing that not push through, buyers should pay back and ensure to return the home to its previous condition. Utility cost should be the responsibility of the buyers, with all accounts in buyers’ name.

– Buyers are usually in charge for lawn maintenance and trash removal. Both parties need to agree to maintain the property in its current condition.

– Buyers should not be allowed to sublet the property.

– Buyers must ensure their personal things.

– Standard form usually includes a clause releasing sellers from liability if something bad happens to buyers while they are living in the house.

– Are pets allowed?

There are instances when buyer possession before closing can help both parties. If you sense it is a good move, simply proceed slowly, no need to rush in, scrutinizing your buyers as completely as possible before you agrees to anything. Again, it pays to consult with a lawyer if you have any worries about the contract.

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July 22nd, 2010