So you have a contract coming in on your home and there will be a lot of details to consider when handling that offer. One of the details will be a possession date and time. Of course there will be the all important closing day but that isn’t always the day the buyer gets possession, at least not here in Colorado. Here we fund the closing at the table and there is no required escrow period. Therefore, the buyer could be allowed possession immediately at closing.
The possession date and time is negotiated in the contract and agreed upon by all parties. With that said, let’s give it some food for thought. Often times the seller would prefer some time after closing to allow possession to the buyer, typically 48 hours or so after closing. In fact, that is often indicated in the MLS for other agents to see and know the seller’s preference. Keep in mind, everything is negotiable depending on which point of view you see the situation.
For the seller, allowing possession after closing can provide some desirable breathing room to finish up the packing and final clean up, not to mention the comfort of knowing that the closing actually took place before completely moving out of the house. After all, what if something happens, even at the closing table and you still own the home now with all your belongings in a truck? Yikes!
For the buyer, this is such an exciting time usually and you can’t wait to get into your new home and start making it your own. Besides, if the seller is still in the house moving out, what if they accidentally damage it or worse? Not to mention the fact that since closing you’re now paying for it and not living in the house.
So what to do? There are strong reasons for both sides of the story. Most transactions are flexible with sellers and buyers working out an understanding. In some cases possession time may be set and required by a third party such as a bank or relocation company. It’s up to a buyer to agree to that. In most cases, allowing possession at closing is probably the least troublesome way to go as far as potential liability is concerned. In any case, if possession will not be at closing a best practice might be to have a written agreement, much like a rental agreement, set forth and agreed to before closing. Perhaps this agreement may have a deposit made part of it which lends to some level of security.
There is a lot to consider in all parts of a real estate transaction. After all, our contracts here are now over a dozen pages long, typically with many addenda to accompany it. Possession time is but one small yet very important detail to the whole transaction.
Note: This article is intended to provide general information and is not intended to provide specific advice.
The Real Estate Transaction Series | Posession is one of several posts on the subject of real estate transactions.