Dear Kari,
My wife and I listed our home and were lucky to get a good offer the very first week. The closing however was going to take longer than we expected, but the price was so attractive that we signed the offer. We have moved out of our house now, prior to the closing, because we are already paying rent on an apartment.
This way we were able to take our time and move. Our Realtor told us the close of our home has been delayed due to the buyers’ lender.
The buyers would like to move into our home anyway, prior to actually closing the escrow. This seems like a good idea because then the buyers will already be moved in and can get attached to the home. Is this common practice?
Answer:
Usually the sellers hand over the possession of their home after the property has transferred title to the buyers — the note and deed are recorded with the escrow neatly closed.
Saying “no” to the buyers’ request may make the sellers seem like bad guys, but that’s the best course of action.
There may be serious hidden risks when sellers allow the buyers to move in prior to the closing and problems could surface.
What if the buyers’ loan does not get funded because they went and bought a new car and now their debt-to-income ratio it too high to qualify?
What if the buyers feel the property went down in value and they want to pay less?
What if the hot water heater breaks? Who pays?
What if there is an accident and a guest is seriously hurt? Would the buyer or sellers’ insurance pay for the costs?
What if the buyers’ lender required an additional appraisal and the dollar amount came in lower than before?
What if the buyers move in and find they don’t like the neighbors?
What if a bigger home comes on the market for less money and the buyers move out and buy that one instead?
What if the buyer makes a long list of items for the seller to repair or replace and insists on them being done before they will sign their closing papers?
What if the buyers move in and change their minds?
Buyers moving in, living there and then moving out could create added costs of making the property show-ready again.
Remember, the final decision is up to the seller.
If the buyers are allowed to move in prior to closing, contact your local attorney and have things spelled out in writing first.
Kari McCoy owns the Kari McCoy Group, Residential Real Estate, at Lyon Real Estate. Call her at (916) 941-9540 or e-mail her at sold@karimccoygroup.com
