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The real estate negotiation process is tricky, and there are times when both the buyer and seller will need to compromise. That being said, sometimes buyers come to the table with a big request that can give any seller pause: They want to gain access to the home before they close on it.
Let’s examine why buyers want access to a property before closing, what the legal and financial ramifications for a seller can be, and why this is rarely a good move for the seller to make.
Why would a buyer want access to a home before closing?
Before a buyer officially closes on a property, it may seem odd for them to want to come in and make themselves feel at home — the property isn’t theirs yet, after all. So why would someone even make this ask?
The buyer may want access to the property before their move-in date to tackle repairs or decorative touches like painting. This request is more common with foreclosed homes that need significant help to get to a point where someone can live there — like if the house needs a heater, toilets, or essential kitchen appliances.
In some cases, a buyer may want to pop by for an hour or two to do some measurements, or get an idea of what paint color would work in the bathroom. For more minor requests like this that aren’t so invasive, the seller can work with their real estate agent to arrange a visit in a way that everyone feels comfortable with.
What legal or financial considerations are there?
There are major legal and financial factors to consider when a buyer wants, and gets, access to the home before they officially close on it. It’s understandable when a buyer wants to work on a house before closing or needs to move in a few days early, but that doesn’t mean it’s a good idea for the seller to let them in.
Mortgage underwriting problems
A major risk for the buyer is that the sale may not go through — and there’s a lot that can go wrong on closing day. Mortgage underwriting problems, such as the buyer not receiving approval for their home loan application, are a common snag. If the buyer moved into the property before the failed closing, that’s an issue, and the seller will need them to vacate. In an ideal world, the buyer would leave immediately, but they may choose to be difficult and force the seller to pursue legal action to get them to go.
Paying to undo unwanted ‘improvements’
If the sale falls through, but the seller has already allowed the prospective buyers to make repairs or changes to the home, they may have a half-finished repair on their hands or a cosmetic choice that makes it harder to sell the home to a new buyer. In some cases, the seller may need to undo the “improvements” to get their home back to the way they like it or into a sellable condition.
Buyers may request more repairs
The more time a buyer spends in a home, the more repair “needs” they may encounter. The last thing the seller wants is a buyer adding more repairs to their to-do list for them to close on the sale, especially if they already negotiated repairs after the inspection and appraisal.
The seller still insures the home
Even if the buyer moves in or starts on renovations before the closing date, the home is likely still insured by the seller. If the buyer causes damage to the home, or anyone is injured while on the property, the seller and their insurance policy will be on the hook.
Does a seller have to agree to let the buyer in early?
Buyers may find themselves in a tough position if their apartment lease ends before closing day or if they already had to sell and vacate their old home. So, can you move in before closing? And does the seller have to let the buyer in early?
Technically the buyer can move in early, but legally a seller does not have to grant the buyer access to their home before they close, and they shouldn’t do so unless they take the proper steps to protect themselves. If a buyer is insistent on moving in or making repairs before they close on the home, the seller should create a lease agreement separate from the purchase agreement. When the seller has a lease agreement, if the sale falls through or something else goes wrong, the seller can evict the person formerly known as the buyer from the home.
The seller must treat the home purchase and lease transaction as separate arrangements. The seller will want to receive a down payment for the purchase of the home, the first month’s rent, and a security deposit for the lease before letting the buyer access the property.
The seller should also run a thorough background check on the buyers before they agree to let them access the process early, even with a lease agreement in place. They’ll want to know if the buyer hasn’t always paid their rent on-time or caused legal issues for their landlords in the past. Ideally, the seller won’t find anything nefarious in the buyer’s background check, but it doesn’t hurt to take a look.
Is it common to let a buyer access the home before closing?
While it does happen from time to time, it isn’t that common for sellers to let buyers into the home to make repairs or live in before they close on the property. This is a dangerous game to play for the seller, especially if they don’t pursue a lease agreement that will provide them with some legal protection in the event they need to remove the buyer from the home.
It can be challenging for buyers to balance selling their old home and moving into a new one to line up the move-in dates. This is a common reason why some buyers ask to move in before they officially close on purchasing a home. The last thing anyone wants to do is move into a rental or hotel just to move again a few weeks later.
While these common buyer frustrations are understandable, finding a seller who will accommodate a desire to move in early will be hard.
To avoid running into this problem in the first place, homeowners who need to navigate selling and buying a home at the same time can take advantage of Orchard’s Move First, a service that helps them buy and move into their new home before they sell their old one. That way, they can have a stress-free transition and enjoy their new home without having to find a temporary place to stay.