Letting Buyers Take Possession Before Closing Can be Risky – Knoxville, TN

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Selling your home in Knoxville, be careful not to make this mistake!

You are selling your home. After a few months on the market you finally received an offer that you are interested in accepting. You are so excited to move in to your brand new home in the next city over that you will do anything for the buyers to move in and take over. All of a sudden there is a delay that will cause the closing to be pushed back. What’s the harm in letting your buyers take possession early? Let’s take a look at a few horror stories…

In the first scenario, the buyers gave the sellers $10,000 to move in early as they are required to be out of their current home. After the buyers took early possession, they then decided they did not want to close. Since the buyers were in a breach of contract and the sellers had received a second offer, the buyers demanded the sellers to sign cancellation papers and move out. The buyers refused. The case went to court and then to trial. It took 5 years to settle.

The second scenario includes a vacant home. The buyers requested to have their painters come out prior to closing. The sellers, unaware of any harm, agreed. The painters left a cloth on the floor because they planned to return the next day. The property, however, had a floor furnace that kicked on in the middle of the night. The furnace ignited the cloth and the house burned down.

How to protect yourself and your clients?

As a realtor, we strongly recommend to never let buyers take possession prior to closing. There are plenty of counter options, including: putting them up in a hotel or working out a leasback with their current home.
If you have no choice but to allow your buyers to take possession, keep these tips in mind…
-Create a purchase agreement and a separate lease agreement
-Take photos of the interior and exterior for documentation. Be sure to gave both parties sign off on the condition.
-Purchase a home warranty protection plan. As you read in the horror stories, you never know what can happen.

Bottom line: In a perfect world, leasebacks are not ideal. But we don’t live in a perfect world. If you are in the state that you must, please don’t hesitate to give us a call. We would be more than happy to help you. These stories, as they are drastic, gives you an idea of what to expect when allowing buyers to move in before closing. Remember, entrusting in a real estate agent can prevent these situations from occurring. That’s why it is important to have an expert in your corner- to help you walk you through the details, give you feedback, and keep you safe.
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