Is it wise for a seller to offer possession at closing, knowing that deals sometimes fall apart, and that the seller must relocate before closing?

Asked by Michael Kuck, st marys, OH Tue Jun 28, 2011

Isn't it better to have the possession be 10 or 20 days after closing? In that way the seller can know definitively that the closing will happen, and can then make a safe relocation. For a seller to offer possesion at closing he, she or they must move out before closing, and if the deal falls apart, what protection is offered the seller? Deals do fall apart at the last minute on occasion, even after the buyer has received formal loan approval. I'm interested in some feedback on this point. In our area the possession is typically offered some days after closing for homes that have been occupied, but in many areas it takes place on day of closing, which I would think to be risky for the seller, and could possibly create a liability issue for buyer and Realtor. I would appreciate some feedback on this subject. Thank you

Help the community by answering this question:

+ web reference
Web reference:

Answers

8
Bill Eckler, Agent, Venice, FL
Tue Jun 28, 2011
Michael,

Your concern for the buyer is admirable. However, for a buyer to be offered possession 10-20 after the closing could present a multitude of issues. Buyers actually take ownership at closing, not a designated period of time after it. It's unlikely that most buyers would agree to this arrangement.

Buyers should understand the terms of their agreement and what it means for them. The fact that deals "fall apart" is reality and can happen for any number of reasons.

Bill
1 vote
Jeanne Feeni…, Agent, Basking Ridge, NJ
Wed Jun 29, 2011
You are the owner when title passes - if there is an issue that you are concerned about, you should consider delaying close and resolving the issue. When title passes, so does the house and any issues. Talk to you attorney about your specific concerns....

Best,
Jeanne Feenick
Unwaveing Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
Annette Law…, Agent, Palm Harbor, FL
Wed Jun 29, 2011
Regarless of which way one biases the closing,in favor of seller or buyer, a equally disasterous outcomes are possible. The ONLY truly safe postion for the buyer, seller and every real estate professional involved, including their borkers, in the trans action is possession of home when keys are transferred, (which should occur immediately after seller gets their money).

This is why professionals should insist on working with local loan originators. When trouble occurs the Utah based originator knows agent in FL or Ohio will not be appearing at their door. If your buyer or seller would like to risk momentary homelessness, they can choose to ignore the advise of those who have been doing this for more than a few months. How we start our clients in the very beginning has a lot to do with how the final hand will be played. Protect your clients, your broker and yourself... possession after closing ONLY!
Web Reference:  http://www.MyDunedin.com
0 votes
James Gordon…, Agent, Hamilton, OH
Wed Jun 29, 2011
Michael from the buyers perspective if occupancy at closing is not possible there are a few things that should be considered. A per diem amount to be paid by the sellers for a specific hold period. Penalty per diem charges if the sellers do not move at the specified date. A modest amount say 5000.00 held in escrow for any damages done durring the holdover time. A copy provided to the buyer of the sellers renters insurance policy. Most importantly a signed short term lease.
This is not leadal advise but there are liability issues on both sides. Occupancy at closing is much cleaner.
0 votes
Jo Soss, , Bremerton, WA
Wed Jun 29, 2011
In my market the standard is usually closing or closing plus 3 days. I would never participate in a 10-20 day after closing possession. I have had one transaction fall apart at closing since 1994 and it was the seller that defaulted. With the normal loan process docs are signed 2-3 days prior which can give everyone a pretty good idea when closing is going to take place. Just has never been an issue for me.
0 votes
John Souerbry, Agent, Fairfield, CA
Tue Jun 28, 2011
You make a great point from the seller's perspective. It comes down to everyone's unique situation and what it says in the contract. Usually the seller is protected by keeping the deposit, though additional deposits could increase that protection.
It's a stand-off.
0 votes
Chris Freeman, Agent, Grand Rapids, MI
Tue Jun 28, 2011
I always prefer that the possession is at close (when humanly possible). The fact of the matter is that anytime the possession is not taken at close, the new buyer is now a landlord and the seller a tenant (with all the rights of tenancy).

I want to avoid this whenever possible.
Web Reference:  http://www.OwnGR.com
0 votes
Christopher…, Agent, Tarrytown, NY
Tue Jun 28, 2011
Hi Michael, Yes unfortunately it is a risk the seller takes but in alot of cases they may be able to keep the buyers down payment to make up for any loss. This will depend on the reason the deal fell through at the last minute. I have been doing this full time for 6 years and have never had a deal fall through at the closing table so I'm not sure how often it happens. I do know the banks are checking up on things until the very last second. I always tell my sellers to have a back-up plan in place in case something goes wrong. In this business there are no guarantees that's why it's crucial that a buyer is screened extremely well prior to entering a deal. Even then it's still a crap shoot these days.

Chris
Web Reference:  http://raveis.com/chrispagli
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more