Let a buyer in before closing and play with fire

If you negotiate with matches, you may well get burned. (Flickr photo by studestevo)

When buyers insist on moving into your home before they own it, the temptation to find a way to comply with the request or demand can be overwhelming.

My very best advice is to win the battle against that temptation without restraint.

That’s because the opportunities for problems to arise are manifold–for example:

  • The buyers might cause damage;
  • They might discover things they don’t like and:
    • Demand remediation of the supposed defects;
    • Take a casual approach to closing on time;
    • Refuse to close altogether.
  • Decline to leave if the transaction falls apart, even through no fault of their own–for instance, if their lender ultimately balks;
  • Refuse while they remain to permit showings in the event that the seller seeks back-up offers.

None of these eventualities could be desirable or inexpensive for a seller.  The only winners in such cases will be lawyers.  Sellers can lose not only money but the chance to unload their property quickly at the right price.

So, don’t do it.

However, since some sellers inevitably will feel compelled to ignore this advice, here’s what to do if you must allow pre-settlement occupancy.

  1. Instead, rent them a hotel room and storage space (or, better yet, tell them in no uncertain terms that it’s the perfect solution, at their expense and explain why, no matter how much you like them and want to be liked);
  2. Failing No. 1, retain a lawyer to draft an ironclad license (not a lease, which gives them too many rights in many jurisdictions) for them to occupy the premises;
  3. Demand a security deposit equivalent to two or three months’ rent and document conditions with photos or videos;
  4. Require the buyers to purchase their own homeowners’ insurance;
  5. Institute severe and enforceable financial penalties for failing to move out on time.

And one more thing: Don’t do it!

Your risk of getting burned is incalculable.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

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3 thoughts on “Let a buyer in before closing and play with fire

  1. This is asinine! There are many legitimate reasons for a buyer to move in before closing. As long as the buyer has proved themselves, then the seller should negotiate this. For instance, I myself am moving to a city in order to go to college. I have already had an inspection, paid the title company, had an appraisal done, and have been approved for the loan. The problem? The lender wants to see two weeks worth of paystubs from my new job that I am transferring to in the city before they give me the loan. How am I supposed to work somewhere when I don’t live there yet?! Finding and getting a rental for two-three weeks is next to impossible. Heck, it’s hard to find a monthly rental! Bottom line, if the buyer is shelling out the cash, then that means they want the damn house. Why would I waste close to THREE THOUSAND dollars on title, appraisal and inspection just to walk away??? THINK ABOUT IT!


    • I know this is an old post, but Tamara, you are. . . [deleted]. What if that new job of yours falls through in the first few days because you are just “not working out” which can and does happen. Closings fall through at the last minute for so many reasons…all the time. It happened to us. Lenders make errors that do not come to light until the closing table. This article is why sellers should not allow early occupancy. You are a buyer who has no liability in a case of early move in so why are you commenting on an article about why a seller should not allow it?


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