Why it might not be the best idea to let a buyer move in before closing.
Today I want to share a story that illustrates why it usually isn’t a good idea to let your buyer move in early.
I worked with a seller one time who went under contract with a buyer just because they happened to know them. Unbeknownst to me, the buyer reached out to the seller and asked if he could move in early. His lease was expiring, so the seller agreed, trying to be a nice person. That’s when the issues started.
The seller still had a few things to move out, and they had to scramble to sort it all while the buyer was pressuring them to go faster. The buyer moved in and found some minor issues that he wanted the seller to take care of after we had already finished the whole repair process. When it came time to close the deal, the buyer’s loan didn’t go through, and that meant real trouble.
Since the buyer had already moved in, it became a tenant and landlord situation instead of a purchase situation. Tenants have certain rights in these cases, so the seller had to go through the full-blown eviction process to get the buyer out. There was even a bit of damage to the property when that happened.
“Letting a buyer move in early is a stressful situation.”
Needless to say, they’re no longer friends, but this all goes to show why it’s not the best idea to let your buyer move in before the closing. Let’s unpack what allowing a buyer to move in early means.
The first thing to think about is the Landlord-Tenant Act. Tenants have rights when they move into a property, and you’d have to go through the full eviction process to get them out if something were to happen.
There are all sorts of loan issues that could come up. What if the appraisal doesn’t go through? What if the buyer isn’t qualified? At best, these problems will extend the time the buyer is living in the property. At worst, the deal might not go through.
You also have to consider the condition of the home after the buyer moves in. Will it be acceptable, or will additional issues come up after the buyer has lived there for a while? What will they do to the property if the deal doesn’t close? What would they have done to the property while they were living there?
This is all to say that letting a buyer move in early is a very stressful situation. If you have any questions about this or real estate in general, feel free to call or email me. I would love to hear from you.