Posted by J T-IN on March 28, 2006 at 21:45:24:
When approached for occupancy prior to closing…?
Sorry, if we could, we would, but our ins co strictly prohibits such a transaction, and it would void our coverage by doing so…
I haven’t turned to salt yet, from telling that little white lie… It stops the conversation dead every time… and never a problem over it.
Buyer wants possession PRIOR to closing. - Posted by Bill
Posted by Bill on March 26, 2006 at 07:36:59:
I have a beutiful house that I have just rehabbed. It sold in 1 day. WOW Anyway, The buyer says she want possession to move in before closing. She is a qualified buyer with a Pre Aprovial letter from the bank. The buyer has not done anything to make me feel uncomfortable letting her move in but what if something comes up and she cant close? What if she moves in and finds things in the house that dont work and wants them fixed or no closing? Do I have her move in with a lease and security deposit?
Thanks
Talked me into it. Thank you - Posted by Bill
Posted by Bill on March 26, 2006 at 20:43:10:
I told them no possession until closing. They did not have a problem with it. Thanks again for the suggestions.
Re: Buyer wants possession PRIOR to closing. - Posted by Elizabeth NJ
Posted by Elizabeth NJ on March 26, 2006 at 15:00:39:
Bill,
When I’m the buyer, depending on the circumstances, many times I’ll get immediate possession, stated both in my contract and in a separate document. But when I’m the seller, nobody steps foot in my property until closing has finished.
You’re asking for a lot of problems including court costs to get her out of there if she fails to close, and possible rehab work if she damages the property. I would take “backup” offers now from other qualified buyers in the event this one can’t close.
As the seller, you or your attorney should communicate directly with her lender to determine the status and progress of her financing. Bear in mind that the “preapproval” letters from mortgage companies used to carry some weight. These days, they are meaningless because everyone and their uncle is writing mortgages under someone else’s license and farming out the deals to a bunch of lenders.
If you don’t have an attorney, hire one now. You don’t mention if this is your first deal, but no matter how experienced you are, I still recommend you use an attorney now to get the ball rolling with this questionable buyer.
Good luck to you.
Re: Buyer wants possession PRIOR to closing. - Posted by Sailor
Posted by Sailor on March 26, 2006 at 14:40:37:
The archives can tell you all the potential problems, but to summarize–do NOT let her move in prior to closing. Just tell her there is an insurance problem with that, or a legal fee for lease, or whatever. Best to let the agent inform her. There is many a slip between pre-approval & closing, so don’t set yourself up for disaster. I have also learned the hard way it is not good to allow boxes in until after closing. If you do succumb to temptation, don’t do it w/out running a complete background & w/out a reference from her current landlord. Some landlord organizations can provide really super checks. Make your lease air-tight, & if she flashes ca$h, it’s a good sign this is a bad deal. Good luck!
Tye
Re: Buyer wants possession PRIOR to closing. - Posted by JeffGinFL
Posted by JeffGinFL on March 26, 2006 at 09:37:51:
Also - what kind of insurance are you carrying on the house Bill?? If you have a builder’s risk policy, she most likely cannot live in the house else your policy becomes void. You could change to a landlord’s policy - that just raised your expenses on this deal.
From my perspective, I do not allow my buyers to move in until closing happens. You say she is preapprv’d - that means nothing. Does the lender know she has put a contract in on a house with short title seasoning?? (I am assuming that to be the case). That could be an issue. What is the spread between what you paid and what you are selling it for - if it’s alot you could run into an “appraisal review” with the lender. I’ve had 4 of them over the last 3 months. Not fun at all.
Too many things can happen with her loan - all of which are out of your control - and she could be in your house and you could be stuck trying to get her out!!
Where she resides prior to closing should not be your issue.
Just my thoughts.
JeffGinFL
Re: Buyer wants possession PRIOR to closing. - Posted by dutch
Posted by dutch on March 26, 2006 at 09:36:05:
There is risk here. I would get a security deposit (a Big one) and have here sign a month to month rental agreement. That way, if it doesn’t close, you can go the eviction route. Make sure your security deposit is big enough to cover the cost of eviction.
Or just don’t let her. Your call.
Dutch
Re: Buyer wants possession PRIOR to closing. - Posted by RogerTX
Posted by RogerTX on March 26, 2006 at 07:53:42:
Yes. I did that with my own house once. Since she is already under contract to buy, lease it to her with her responsible for all maintenance and repairs. I can’t imagine that she could find something not working that you don’t already know about unless you don’t plan to check.
Re: Buyer wants possession PRIOR to closing. - Posted by ski
Posted by ski on March 26, 2006 at 07:51:51:
Doesn’t mean diddly if she is “prequalified”. Does not mean that she will be qualified. DO NOT let her move in prior to closing. She will find many things wrong with the place even though you “completely” rehabbed. If the deal fails to go to the closing table you will now probably have to start the eviction process. In some states this can take a very long time and the property can incure serious damage. If she is a smoker you will have to repaint and clean the place before it is again ready for resale. If you still want to get her into the place you can maybe do a month to month rental. Again a lot of damage can happen in that preiod of time. IMHO I would continue to advertise the place for sale.