Welcome back to my Ask a Realtor section! This is an actual question from a Seller who moved to St. Petersburg, Florida from out of state where their real estate contracts allow them to remain in the home a few days after closing and my response.
Q: Can I stay in my home for a week after closing so that I can pack, and make sure that the deal is done?
A. In Florida, the day of closing is also the day of possession – and it states this in the Florida contracts. The home is to be “swept clean” and vacant at the time of closing. I usually ask that Buyers do this the day before closing so that the Buyer can perform a final walk-thru.
Here are some complications that can arise if you remain in the house past the date of closing:
- Insurance problems for the Buyer. Insurance companies won’t extend insurance past the day of closing so what if something happens during that week? The new owner’s insurance might not pay if the insurance company finds out they haven’t take possession yet, should their, god forbid, be a fire or other accident.
- What if you, as the Seller and prior owner damage or break something in the home that week? A second final walk-through is always recommended prior to the move out. The issue of who is responsible at that point could become an issue.
- Many Buyers need to move in right away because they have sold their prior home or their lease on their last property has ended and would have nowhere to live for that week.
- Many loans for a primary residence dictate that the Buyers have to occupy the home and it cannot be used as a rental upon closing (otherwise you’d need a mortgage for an investment property which generally has higher down payment requirements).
If a Seller insists that they cannot move out prior to closing and the Buyer is willing, there is an option called a Lease Back. I explain that the Buyer will want rent for that time period that the Seller occupies the home. Some Sellers horrified that they would be asked to pay rent for THEIR home – I gently remind them that after closing it is no longer their home; and they are asking the new Buyer to take all the liability so therefore they should be paid rent. Many Buyers want a large deposit if they could give the old owner that extra week (or whatever amount of time is determined for the lease back); and this would be wise along with an written lease agreement. If a leaseback is agreed upon, it should be carefully worked into an addendum to the contract with the lease agreement attached outlining who is responsible for what, deposits should be made and rent paid.