Real estate transactions can be complicated. After an offer has been made and accepted and financing is arranged, everyone wants to move on – quickly. Buyers in particular want to “get the keys” and start moving in – usually as soon as humanly possible. This is known as taking “possession.” But, possession can be a tricky issue.
The fact is that possession at closing poses risks for both buyers and sellers.
It’s crucial that buyers and sellers are aware of the risk and know all options before signing a contract.
Buyers and sellers can have very different expectations and local real estate customs and laws can vary. Some state laws require the buyer get possession of the home at the closing, while in other states the seller maintains possession for 30 days AFTER the closing.
Obviously, the parties can make other arrangements as long as everyone agrees, but they should understand the risks.
The reason for this practice is to reduce the risks to all the parties involved. When things go wrong at the last minute, many bad things can occur.
Risk to the sellers
Sometimes sellers move out of the property in anticipation of closing figuring that all they need to do is sign the paperwork and leave keys for the title company to hand over to the buyer. However, even at the time of closing, something can go wrong and the sellers are left with an empty home, lots of stress, and their own issues if they had anticipated a quick closing on THEIR new home.
Risks to the buyers
• If the seller leaves the house messy, the buyer is responsible for cleaning up the mess
• If the sellers don’t move out on time, the buyers may end having to get a lawyer and start an eviction – which can take a significant amount of time
• If there is a fire, flooding, or some gets hurt, the buyers have taken on the liability and are responsible for any damage because they now own the property
The Bottom Line
The short delay between closing and the possession that has become a “best practice” in Ohio should present few if any problems to all parties if it has been planned.
It just makes good sense because– it can save everyone involved in the process a lot of grief, stress – and money.
If there is a late afternoon closing, recording may not occur until the next day and, on a technicality, means the buyers may have to wait for the keys.
The Best Solution
The best way to avoid problems is to have the buyers do a late afternoon or early evening walk-through and have a morning closing the next day. This eliminates many of the potential issues.
Morning closings provide the title company time to record the deed and mortgage on the same day. That way nobody ends up with a headache.