Possession at Closing?

[dzil]

Did you take possession at closing? Apart from any special circumstances, why would you not take possession at closing? I haven't run into this issue before, because the first house I bought was vacant and it wasn't an issue. When we sold the house, we moved out a week before closing. We're now buying again and when we went to sign the offer we noticed that the realtor had said that we would take possession two days after closing. I asked her about this and she said that a lot of people would like the extra time to get everything moved out. If they would like the extra time, then we'll push closing back a week, but we're adamant about taking possession at closing. I'm just wondering how common this is.

[Delaney21]

My understanding is that its very common. Usually the owner of the house has 30 days to get out of the house, but they have to pay you 'rent' for every day they stay past closing. Maybe the seller isn't closing on their new house until the day before your closing so they do actually need that time to get everything out since they just gained access to the new house. When we bought our house, the sellers stayed in the house for a day after closing because of that reason. A lot of people try to have their buying and selling closings on the same day, they would definitely need time after close to get their stuff out.

[Sabre]

When my mom bought her house, the sellers asked to have 3 days to move out and clean after closing. The sellers were required to pay my Mom "rent" for those 3 days.

[MsPeachy]

why would you not take possession at closing? If they would like the extra time, then we'll push closing back a week, but we're adamant about taking possession at closing.
I think this is very common.

When we sold our TH, we included 2 weeks of buyer-funded "rent back" in our contract. So we kept living in the TH after closing to give us time to take care of things at our new place and move. The second to last day of the rent-back I had a cleaning service come in and clean everything. The new owners did a walkthrough at the end of the rent-back period to determine if the house was in proper condition.

One final thought. Not everyone can schedule closings for a sale and a purchase on the same day. If you need funds from the sale in order to make your purchase, you need to make the sale first. But - if the purchase closing isn't the same day, where are you going to go? In my recent experience, it was actually lucky for me that I didn't try to have both scheduled on the same day since there was a problem with the buyer's downpayment check (for their loan) that caused me to not receive the proceeds from the sale until 2 days later. Luckily, the closing on my new house wasn't until 3 days after AND we had the rent-back as a cushion.

Unless you really mistrust the sellers, I think it's pretty inflexible of you to "insist" on taking posession.

[Marie]

Different perspective....we would NEVER allow the sellers to remain in the home after the closing. Too many problems can happen. What if they damage something? They are technically renting from you at that point and you are the landlord. What if they won't move? Seriously, it happens. Then you have to evict them. Any idea how long that can take?

Around here it is not very common and possession happens at the closing. If they need to move the closing out a few days fine but I wouldn't close on a house where the sellers would remain. Uh-uh, no way, not gonna happen.

Signed,
The wife of a real estate attorney

[kiddo]

We took possession of our home a month after closing. It was stipulated in our contract that if the sellers were not out of the house at closing, they would have to pay rent of $X. About 2 weeks before closing, the sellers contacted us (we did FSBO) and asked if they could have the extra month since their house they were building did not have power to it yet. They still needed to close on time because they had a lot of contractor bills they needed to pay.

We closed in Nov. and moved in Dec. It worked out fine since we had our apartment until the end of Dec anyway. We were glad we were able to help them.

If you do a rent-back, make sure you contact your insurance company to be sure you have your bases covered.

[lml41981]

You can't take possession until your loan has funded. Our loan was funded before we even signed the papers, so had it not been in our contract that the seller had 24 hours to remain in the house after closing, we would have had possession right away. We did have keys right away, but we agreed not to go in.

Our sellers wanted that time to finish moving out and to hire a cleaning person to come in. I have no idea what their cleaning person did because the house wasn't clean, but whatever.

It was also in our contract that if anything in the home was damaged between the time we last saw the house (which was a week prior to closing when we measured for floors) and the time we first saw the house post-closing, the seller would be responsible. Nothing was damaged, but they did leave a crapload of trash in the attic despite requests and reminders that they clean the attic out. That was their way of getting even with us because we wouldn't rent-back to them for a few extra months.

[kiddo]

What if they damage something? They are technically renting from you at that point and you are the landlord. What if they won't move?

Our contract stipulated that we have a walk through before closing and then another one before possession and that the sellers would be responsible for any damages. If the sellers were not out of the house in 30 days after closing, rent doubled and would continue to double every 30 days.

[lml41981]

But - if the purchase closing isn't the same day, where are you going to go?
In our case, we (as the buyer) didn't care where the seller went. We knew our lease was up in June and we had to be out, so they needed to be out after their 24 hours so we could get in and start fixing up the place. They ended up staying with family until their house was finished being built.

Now that we're the seller and we're also building, we'll ask if we can rent back but we aren't going to hold our breaths. We'll find an extended stay hotel that accepts pets and live there for awhile if we need to. It isn't the buyer's responsibility to ensure we have housing.

***

In my neighborhood, a few months after we bought our house another house sold. It was a tricky situation because it was co-owned by a homosexual couple going through a very nasty breakup. One woman left the house, but the other refused to leave. She holed up in the house for a few weeks and finally the new owners had law enforcement come out to evict her because they had never agreed to rent-back...the woman was just squatting.

[MsPeachy]

It isn't the buyer's responsibility to ensure we have housing. This is true. The point I was trying to make was that allowing a few days of rent-back (or more) allows for some cushion in case a problem arises.


In our area, it's a seller's market. We could pretty much dictate whatever terms we wanted when selling our TH since buyers know that if they don't accept, we have many others who would be more than happy to accept our terms. It's that hot and people are that desperate to get places.

[Sarah051504]

We just receantly sold our house and started building a new one. To our great surprise we had a full price offer on our house after only 2 days on the market. We're in MI and it's not a hot market so we were not prepared for this, they hadn't even broken ground on our new construction yet! To make matters worse the buyer originally wanted to close in two weeks and get oc at closing. We just couldn't do that, not only didn't we have anywhere to go but we hadn't even started packing and we both work full time and my DH goes to school. We asked for 30 days after closing. It was either give this to us or not get the house. Not only did the buyer agree to the 30 days but she also didn't charge us rent back. (She really wanted the house) In the end we only needed an extra 14 days but we needed it and if the buyer wouldn't have agreed she wouldn't have gotten the house. Every situation is different, the buyer didn't have any walkthroughs although at closing we did tell her she could come buy anytime and she did stop over once or twice.

[lml41981]

In our area, it's a seller's market. We could pretty much dictate whatever terms we wanted when selling our TH since buyers know that if they don't accept, we have many others who would be more than happy to accept our terms. It's that hot and people are that desperate to get places.
You're lucky...our market is pretty neutral right now, but we do have a slight advantage because the location of our house is nice. When we bought, it was a buyer's market and we had the huge upper hand because the seller had made horrific design choices that scared away every other potential buyer. We pretty much got to dictate how things went (they refused some things and were jerks about stuff, which was partially why we denied them rent-back).

[larslobster]

We're currently in the process of selling our house in L.A. and buying one in Oregon. We asked to rent back for a week on our L.A. house because we don't close on the house in Oregon until 5 days after we close down here. We scheduled it like that on purpose in case the closing down here gets pushed back a day or two and we need the proceeds of the sale for the Oregon close. We also have two dogs and a cat and didn't want to deal with finding temporary housing until we could take possession of the new house, almost a week later.

It's a seller's market here and we had multiple offers so if the buyers wanted the house, they had to agree to that stipulation.

[notkk]

Well I guess common practice here is completely different. For our last move we gave the seller 24 hours to move out and we had 48 hours to move out of our old place. We didn't pay any rent or receive any rent.
The woman that we were buying from needed to close on her old place before she closed on her new place (she needed the $$ from equity). We didn't need the $$ from our sale to close on our purchase, but it could have been a consideration. We closed on our old place at 10 and the new place at 12. The woman we bought from closed on her new place at 1 - all on the same day.
We have been fortunate that everything has gone smoothly and we have not had any problematic people to work with. We did have to ask the seller for $$ to compensate us for where her moving truck scraped the front sidewalk when we she moved out (after close) - but we didn't have any problem getting the money from her.
While some of it has been luck, but we also have a realtor that we absolutely trust to protect and fight for our interests.

[ee_chick]

I was under the impression that taking posession one or two days after closing was standard. We just bought and sold and that was the case for us. We took posession of the new house at 5:00 pm two days after closing, and we're required to yield posession of the old house one day after the close. We'll give it over on the day of, but that's because we're already moved into the new place. This was very clearly outlined in the contracts and original offers.

[PLNUBRIDE]

I haven’t had the time to read all the posts, but this topic is near and dear to my heart as I JUST moved out of my home on Friday. Anyway, here is my 2 cents:

I have read in various places here that people feel that there is no excuse for not being out the day it closes…after all they have had 30 days (or longer) to get packed and moved out. However, it is not always a lack of planning that causes the delay.

Here is my situation:
We officially closed escrow on Tuesday Sept 20th at 5pm (The new owners name was recorded on title at 4pm). It was written in the contract that we had 72 hours after close to vacate the property without having to pay rent. I totally understand having to pay rent after that, but there needs to be some time allowed for closing on the new place.
Now, I don’t know how common this is around the country, but there is no way I could have moved any earlier. This is because we needed the funds from the sale of the property to fund the purchase of the new property. Thus, if we were forced to move the day we closed…we would not have had anywhere to go. This is because it took the extra two days to get the funds from the sale of our house to the builder of the new home and for them to record title. From what I could see of the process there is no way we could have closed on our old property and get the keys to the new place in the same day

[kagbsc7]

From a seller's perspective, why should I move out when I don't know for sure that we are going to close? My grandmother was suppose to have 2 closings back to back (sell first, puchase next). It was scheduled for Tues--they were unable to close until Fri. So if she would have moved everything out before closing, she would have had no place to go.

[eponymous]

From a sellers' perspective, it makes a lot of sense to retain possession for a couple of days - until the closing, the buyers can always back out.

We had a week in between the closing and taking possession, but we were given keys and garage openers at the closing, and told us that they would be out in three days and didn't mind if we came in early. We scheduled our closing so that we would get to move in during school break.

[RobynScott]

Around here you take possession as soon as you close. In fact, we would not do our final walk through until the place was completely emptied out and in broom clean condition. - "broom clean" condition was specified in our contract and is the nrom around here. If you close and then the sellers move out - what happens if they damage something on the way out?

As soon as you close - the place is yours (the buyer's) and anything that's left in it is yours as well.

I thought that's how it worked everywhere but that's definitely how it is done around here.

Also - if you need the funds from one sale to close on another - most people just do back to back closings.

I can't imagine closing but not being able to move in right away.

[dzil]

Sure the closing could fall through, but you should have some indication of that way beforehand. Earnest money and the size of the downpayment may be indicators.

As I buyer, I agree that I'm not responsible for the seller's housing. Once title passes to me, it's mine, and I want in! As a seller I planned for all contingencies and wouldn't feel comfortable staying in the house after title had passed, anyway.

Thanks for all the replies. Fortunately our sellers were willing to move the closing date back and we will take possession at closing.

[MsPeachy]

If you close and then the sellers move out - what happens if they damage something on the way out? That's why you have the final walkthrough after they move out. The contract should state the date the sellers need to vacate by, that the walkthrough will happen after that and what the consequences would be given the occasion of any damage. It's quite easy to spell all this stuff out in a contract. As I buyer, I agree that I'm not responsible for the seller's housing. Once title passes to me, it's mine, and I want in! As a seller I planned for all contingencies Well try to have a little compassion for people who also perhaps planned for all contingencies and maybe things still fell through. Even the best laid plans can still get mucked up.

[dzil]

Even the best laid plans can still get mucked up.

Of course, sh!t happens. What I don't understand is why the seller should receive priority- what if the buyer has no other place to stay, either?

[MsPeachy]

What I don't understand is why the seller should receive priority- what if the buyer has no other place to stay, either? Well, if you were buying in a seller's market, then the seller would get priority because there are other buyers who'd be willing to cooperate if you (general "you") wouldn't. What the seller says goes. And vice versa, if it were a buyer's market, the seller might be more willing to concede to the buyer's wishes to help solidify the sale.

Otherwise, it would make sense that both parties would try to work out a mutually agreeable settlement and posession date (if the 2 were to differ). As in your case, the buyers were willing to alter the settlement date thus reaching a mutua agreement.

[honeygirl]

I didn't realize this subject was so controversial. I've bought or sold houses in three markets now (Midwest, southwest and pacific) and always had or gave possession at closing. For the reasons already stated by prior posters. I had a hard enough time waiting to enter my first place until we closed (it was vacant). At the time it was explained to me that there were liability issues if something went wrong to me or by me before it closed. I can't see how it would be any different (liability wise) if the sellers were still there after the close.

I'll make sure to stipulate possession at closing I guess.

[RobynScott]

That's why you have the final walkthrough after they move out. The contract should state the date the sellers need to vacate by, that the walkthrough will happen after that and what the consequences would be given the occasion of any damage. It's quite easy to spell all this stuff out in a contract.

True - but even though it's laod out in the contract - it's a lot harder to collect on that $$ when you have no leverage.

E.G., final walkthrough after they move out / before closing - buyer can threaten not to close until the problem is fixed and/or seller pays $$ to repair the problem. We received some $$ back at closing b/c of some issues we picked up at our walkthrough.

If we closed and then had to rely on the contract to try and get sellers to pay for something - unless they're willing to pay right away - not so easy to collect. You have no more leverage (ie, threatening not to close) - and you'd be relegated to suing them in order to enforce the contract conditions. (which might not be worth it by the time you do that)

That's why the RE contract should state the condition that the house is to be in at the time of *closing* and you do your final walkthrough after they move out / before you close.

[eponymous]

True - but even though it's laod out in the contract - it's a lot harder to collect on that $$ when you have no leverage.

We had lots of leverage. They had to leave several thousand dollars in escow until we took possession. It might not have been enough to pay for concrete poured down the plumbing, I suppose, but definitely enough for more typical major damage. And if they'd poured concrete down the plumbing, we could have sued them for being in violation of the contract.

[RobynScott]

If you had thousands in escrow - and that was covered by the contract - then yes, you had leverage. I'm not trying to start a fight here - just saying how things are done around here. Our sellers had no money in escrow - nor would they have put any in.

As long as you've done something like that - sounds like you're protected. I'd be more concerned about taking possession a few days after settlement if there was no money in escrow or anything like that.

[dzil]

We probably should have established upfront that this issue can vary depending on the local market. I don't think it has anything to do with being inflexible or uncompassionate. Like I said, the buyers need some place to go, too. But if the local market can bear the rent backs, then I certainly can't have a problem with it.