You have signed the closing documents but one question remains: “When can I move in?” This can be one of the most frustrating parts of buying or selling a home. The seller doesn’t want to move until 30 days after closing on the property, and the buyer wants to move in the day the paperwork is signed. Possession is something that can be negotiated, and is outlined in the purchase agreement. Sometimes things come up and both parties may be willing to sign an addendum to the purchase agreement that change the original terms. Immediate possession is pretty self-explanatory. As soon as the documents are signed and the loan is disbursed, you are handed the keys. Have the moving truck ready because you can start settling in that day! This is more common when the home was vacant to begin with, but sometimes the seller lives at the home until they accept an offer, and will move out before closing. Some sellers need a few weeks or months to find a new place to live. 30 days is the most common possession date. What typically happens in this case is after closing takes place and the buyer is the new owner of the home, the seller then owes a daily fee, or “rent” for each day they continue to stay. This also is outlined the purchase agreement or addendum. The money is put into an escrow account, and then disbursed to the buyer once the keys are exchanged and seller has moved. If your monthly mortgage payment will be $800, divide that by 30 days, and the seller will be paying your roughly $27 per day to stay in the home. The $800 will be put into an escrow account, and given to you once they move. If the possession date was 30 days, but it only took the seller 15 to move out, they will be refunded for the remaining 15 days they did not stay. There are a few disadvantages that can occur in regards to possession agreement. There can be issues with insurance coverage should anything tragic happen during this time. It may be good idea to require the seller to purchase renters insurance and for you to talk to your insurance company about insurance you might need as a temporary landlord. You also want to note the exact condition of the property so that there are no surprises when you are finally able to take possession. Also, you may run into the issue of the seller not being ready to move out in the agreed upon time frame. It would be wise to seek advice from a real estate attorney before closing if you have agreed to an occupancy term, should any of these scenarios occur. Topic for tomorrow…You have closed, now what?
Posted on: Thu, 20 Mar 2014 12:12:29 +0000
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