final walkthrough

When Does a Home Buyer get Possession?

buyer possessionNew real estate agents have it kinda tough in a market where they are supposed to know what they don’t know, especially when it comes to the final walkthrough for the buyer. The problem seems to be that some think it’s a time for the buyer to conduct a final inspection, which it is not. I’m not sure where they get that idea, but probably from the same place that other bad ideas come from, the land of assumption. To get to the land of assumption, you’ve first got to cross the river of confusion and hope you don’t have to navigate blindfolded at high tide.

I wish there was some sort of handbook, filled with mistakes that rookie agents make, so we could buy this book and gift it to them, but life seems to do a pretty darned good job of preparing them for mistakes through the gift of consequences. It’s a good way for people to remember mistakes and not make them again. Although it can be painful.

Things are not always as logical as one might assume. For example, for some reason, a buyer’s agent thought a home would be vacant for the final walkthrough. The agent believed it would be completely void of personal belongings, including said person. This information was conveyed to the buyer as a matter of fact when it was actually a matter of a big mistake. I suppose when it’s your first deal, you don’t necessarily think through every step or you believe things will happen a certain way, even when they happen a different way.

In times of confusion like this, it’s always a good idea to read the Residential Purchase Contact. Buyer possession is handled in a paragraph under “Closing and Possession.” By default, the contract gives possession of the home to the buyer on the day of closing at 6 PM. This means the seller retains possession of the property and can keep his or her personal items in the property up until 6 PM on the date it closes.

So. if you’re planning to do a final walkthrough that morning, guess what? The seller may still be living in the home and still in the process of moving out. If that is unacceptable to the buyer, the time to address this is prior to closing, say around the time the contract is presented for acceptance or any time after that, prior to the date of closing. One does not wait until the day it is supposed to close escrow and then decide to ask the seller to vacate the premises earlier. That’s poor planning and likely to backfire.

But that’s why buyers want to hire an experienced agent to help. Buyers deserve an agent who understands buyer possession and can arrange for possession to be delivered in the manner the buyer desires.

Call partners Elizabeth Weintraub, Sacramento Broker or JaCi Wallace, RE/MAX Gold at 916.233.6759.

When the Seller Refuses to Move Out on Time

seller refuses to move out on time

When the seller refuses to move out on time, it causes complications for everybody.

One of the worst things that can happen in any escrow is dealing with adversarial buyer possession that can arise when the seller refuses to move out on time. The reasons a seller may refuse to move out are numerous. The seller might not have been made aware of the date of closing. Although our transaction coordinators send out an estimated timeline, not every listing agent will respond to the timeline. Some will not send it to their sellers. Some listing agents don’t hire a transaction coordinator, either. Or, sometimes listing agents don’t know how to count the days to closing in a purchase contract. In which case they give the wrong date to the sellers.

When the seller refuses to move out on time, it can hold up the closing. It can also put the entire transaction at risk. Once the buyer issues a Demand to Close escrow, if the seller doesn’t close on the contractual date, the buyer is free to cancel the transaction without putting the buyer’s earnest money deposit at risk. The buyer might decide the seller is in breach of contract. If the buyer suffers financial consequences as a result, well, let’s just say I would not want to be that listing agent or that seller.

The other issue that arises is the buyer’s final walkthrough. Our California purchase contract allows for such an inspection within 5 days of closing. Sometimes buyers make unreasonable requests such as they might insist that the seller remove all items from the house prior to closing. However, a seller is not required to completely move out until the date in the contract. The date in the contract, for better or worse, is the day of closing at 6 PM, unless otherwise agreed to in writing.

The time to think about when buyers expect a seller to vacate the house is at the time the buyer’s agent prepares the offer. That is the time to negotiate an early move out if that is what the buyer desires. A buyer should not demand the seller move out early when the buyer has only a few days left until closing. That is being unreasonable. Completing the final walkthrough can be more difficult when the sellers’ belongings are still in the house, but that’s what a buyer gets when the buyer does not negotiate an early move out upon contract inception. The buyer is stuck.

Your best bet is to work with the seller when the seller refuses to move out on time. Either move the closing date to accommodate the seller’s move or play hardball and cancel the escrow after issuing the Demand to Close escrow. There are no seller move-out police. You can’t call the cops.

 

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