Question: I am under contract to sell my home. It is vacant, and closing is next month. My buyer has asked me if he could get into the property early, to start cleaning up the place and to paint and make repairs so that it’s “move-in ready” on the day of closing. It seems to me that this shouldn’t be a problem.
If he doesn’t close, I keep his deposit and have a freshly painted house to sell (at a higher price, since I think I undersold it). Is there any reason why I shouldn’t let buyer put a little sweat equity into the house before closing?
Answer: I would strongly urge you not to allow buyer to enter the property prior to closing. Imagine this:buyer takes possession of the property with your permission, and conducts repairs without obtaining proper governmental approval. In the course of making improvements, a fire is accidentally started, which severely damages the property, and causes a wall to fall onto the neighbor’s yard, damaging the neighbor’s property, and injuring the neighbor. Your neighbor sues you. Your insurance agent says the damage isn’t covered, since you no longer occupy the home. The County files a lien against the property for the unauthorized repairs. To make matters even worse, the buyer now states that he no longer wishes to close on the purchase in light of the condition of the house.
In the event it is absolutely necessary to grant buyer possession prior to closing, you should seek the advice of a real estate attorney, who can draft an appropriate pre-closing occupancy agreement, to address the rights and obligations of the parties during buyer’s pre-closing possession period. As the old adage says, hope for the best, but plan for the worst.
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