You have been keeping your house clean for what seems like an eternity. A Buyer came along and you negotiated the terms and your agent calls to say, “We’re closing!” So now what?
There are several things you need to know and to consider about the closing. If you read my blog Read The Contract!, you will know how important it is to read what you are signing. Not only can you get into legal trouble if you don’t, you may not understand the important details of the actual closing and your move.
I go over the contract with my clients but even still, there is so much information and many times, emotion, that not everyone understands the details they are agreeing to. Let’s take a look at some details that can be overlooked:
Closing and Possession Date:Are these dates the same? In Tennessee, most of the time they are but not necessarily. If they are the same, that means that when you go to closing to sign the paperwork, if you are the Seller, you need to be out of the house for good. If you are the Buyer, when you go to closing, as long as the house has been paid for (I will talk about this point in more detail), you should receive keys and be allowed to move in immediately.
As a Seller, if you know you are going to need more time to get out, that needs to be discussed in negotiations. As a Buyer, if you need to get into the house prior to closing, that needs to be negotiated on the front end.
Be sure to communicate timing with your agent or the other party. Your closing may be first thing in the morning and the other party may not be signing papers until the end of the business day if the closings are “split.” This may cause some confusion as to when the Seller needs to be out and when the Buyer can move in.
Funding:Whether the Buyer is paying cash or getting a loan, the money needs to be in the hands of the title company and possibly even the Seller, before the keys will be given and the Buyer will gain possession. If there is a loan involved, the loan will need to be funded by the mortgage company and the down payment and any closing costs will need to be received. Many people think that since they signed the paperwork, it is a done deal and the Buyer can move in. Just like you can’t walk out of a grocery store with a full cart without paying, you can’t move into a house you haven’t paid for.
Temporary Occupancy: There are two types of temporary occupancy. One is for the Buyer to move into the house prior to closing. The other is for the Seller to stay in the house for a period of time after closing. Either of these can be negotiated at any time, however, it is much better to negotiate with the original offer to alleviate stress and potential arguments down the road. As always, READ the agreement! You need to know who is liable for damages, what insurance do you need to have in place, when will you do a final walk through? Will there be a second walk through to check for damages? Will there be any deposits collected? If so, how much and when/how will it be returned? You can see that temporary occupancy is full of details that can be complicated but it can certainly be done if necessary.
In general, if you are doing a traditional Tennessee home sale, you will need to be out of the house on the day of closing, so be prepared. I always suggest that movers come the day before to pack the truck so there are no delays on the day of closing. Not all my clients have taken that advice and have literally been throwing things in their car at 11:30PM on closing day while the Buyer is pacing outside, wanting to get into their new house. Don’t let this happen to you. Be prepared and plan for the worst so you can avoid delays, emotional interactions, and possible legal ramifications.
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur babies, Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.