Real Estate Purchase Contracts - Be Cautious About Delayed Possession

Possession is the last action in the process of buying real estate, where the buyer gets control of the home that has been bought. At closing, the keys are given to the buyer and the seller will no longer have a legal right to be in the home. This is an important event and its significance and implications are often overlooked.

In some cases a seller will ask for permission to stay in the home for some length of time after the closing. It seems innocuous enough, and one might well expect that in the normal course of wanting to be nice and get along, the easiest answer is to say sure, why not. You have full discretion to either approve or disapprove the request; there is no doubt on that point. Before you make that decision, though, there are some things to keep in mind.

When There is a Request for Possession Delay

So, just before closing, the seller asks the buyer for additional time in order to take care of clearing out the home, or to clean up loose ends on the sale. While such a request may seem reasonable, a buyer should consider it in a very circumspect manner. If you choose to allow the request, the seller should be made to pay a fee for any extra time, and that part of the deal has to be documented in an agreement.

There must be a limit on the amount of time the seller can stay in the property after the signature of the contract, and it must be in written form. An agreement or contract addendum outlining the details of the post-closing possession by the seller can be drawn up by the real estate attorney or, in states where attorneys are not involved in real estate transactions, usually by the escrow officer and included in the escrow agreement.

The seller may attempt to pressure you by giving you no time. If the seller says at closing or just before that he or she needs to stay in the property longer, it is normally advisable to push back closing until the seller can move out or sufficient legal paperwork has been written and agreed upon.

Why is Seller Possession Following Closing a Problem?

Once you purchase a property, it belongs to you. It is your responsibility. If your tenant causes a fire that damages the house, it is your loss because you are the legal owner of the property. The seller-tenant will not have to pay for any of the loss unless it is clearly spelled out in the agreement.

Sellers who retain possession after closing are less motivated to clean the property and make repairs or do any maintenance that are needed. When closing on any property, you are accepting the property in the condition in which it is at closing.

Liability for Nuisance Problems

Anything that occurs to the home after the closing falls to the buyer, without regard to who is living there. If a window gets broken or a hole appears in a door, you are the one that will end up paying out of pocket to repair it.

Another frequent problem with the seller keep possession of the home beyond the closing date is that items that should remain with the home can disappear between the closing date and the time the buyer eventually takes possession of the property. Even in this case, since after closing the buyer owns the property, it is the buyer who takes the hit.

When you are a responsible homeowner, you should be firmly in control of your domain. This assertion is easily understood when you are considering whether or not to answer the doorbell and admit guests. It is still true when you are requested to accommodate delayed possession in those last hectic days of the transaction.

Content made available by your Denver home specialists in Colorado, Automated Homefinder.