‘Since the current sellers move out a few weeks before closing and the house will be empty, can we get the keys from the purchased home a few days prior to closing to start doing renovation?
Here is 3 main reasons why this is not a great idea and what circumstances it can lead to.
The Buyer Starts to Make Renovation
In most of the cases the buyers looking to move in early in order to start making renovations, in other words make changes to the property.
With the idea in mind that the buyer will be living there the buyer naturally starts to bring the home to a new look as per his/her personal tastes. If the deal falls through and the buyers have made drastic changes that the seller literally don’t like , then the seller is stuck with the changes. If the changes made by the buyer add value to the home then the prospective buyer may expect to be reimbursed for the cost. Well, the seller can be put into position to cover these expenses to the buyer.
The Buyer’s Mortgage Has Not Been Approved
Let’s say the seller allows the buyer to take possession of the property before closing. We added a detailed clause in the agreement of purchase and sale allowing the buyer to receive the keys before the closing, the buyer brings a move-in truck with all his belongings , unloads it and literally moves in into the house. Suddenly, the day before the closing it turns out the buyer’s loan has not been approved for some reason and the deal cannot close.
Now the problems begin, the home still belongs to the seller and the buyer has no legal rights to reside on the premises unless the rental agreement is signed between the seller and unfortunate buyer to allow the short term rent. Let’s say the buyers have no place to go and their mortgage still not finalized, well, the seller seems to get stuck with the unwanted tenant and unsold home. Even though the seller and the buyer have good intentions to solve this issue, the deal may turn into a very complicated one.
The Buyer damages the property
What if some accidental unintentional damage occurs to the house? Imagine the movers drop the piano on the hardwood floor in the living room and severely damage it. Now, the buyer has to make the repairs before he leaves as he is moving out, additional damage occurs to the house. In a rare case, the buyer may completely trash the house or there is some unexpected accident that causes a fire. Wow…..Now you have a house that needs to be cleaned, painted or probably completely renovated.
Well, my best advice to you in order to avoid the complications and big problems it is better to wait until after official closing to exchange keys.
It is a win-win for both buying and selling parties!
Happy Buying and Selling,
Nikolay Klyushkin ‘Your Toronto Real Estate Guide’