Don’t overlook the possession date on the purchase agreement.
The possession date on lines 271 through 275 of the purchase agreement is often overlooked. However, it’s very important when closing time comes.
The first option on the purchase agreement is taking possession immediately after closing. This is the most common box that is checked on the purchase agreement, but there’s another box there. If that is checked, we can do possession dates of an hour after closing, up to five days, or even longer. In this market, where we’re seeing buyers competing for properties, a lot of buyers are checking the other box for the possession date and giving the seller additional time to move out. Sometimes the length of time is requested by the seller.
There are a lot more nuts and bolts that go into an extended possession date beyond the closing date. First, there’s the final walk-through. If the seller retains possession after closing, they’re likely still living in the property and in the process of moving out. A buyer wanting to do a final walk-through should take that into consideration.
“Understand what you're agreeing to on the purchase agreement and what's going to happen once that closing date comes.”
Additionally, the purchase agreement specifies that all debris needs to be removed from the property, so if the seller retains possession, don’t let them off the hook for removing any debris. Those are some things that need to be discussed between the buyer and seller as well as a transfer of keys, garage door openers, etc.
Possession dates can also be negotiated right before closing. We see it quite often where two days before closing, they decide they need a couple of hours. The key is understanding what you’re agreeing to on the purchase agreement and what’s going to happen once that closing date comes. Make sure all parties are aware of the situation.
If you have any other questions, please feel free to give us a call.