Possession Options
The date the buyers actually take possession of your house and move into it depends on the terms of your contract. Here are the usual options:
Buyers move in the same day of closing
This date is fine if you're absolutely, utterly, positively, beyond-a-shadow-of-a-doubt certain of two factors: the house you're selling has closed, and your next home will be vacant so you can move into it.
- If you intend to move directly from your old house into the new home you're buying, and the closing is delayed or the sellers of the house you're buying can't vacate their place, you've got a logistical problem.
- For two moving vans to occupy exactly the same driveway at exactly the same time borders on the impossible. Moving into a house while someone else is moving out is something you'll never attempt more than once.
Buyers move in the day after closing
We recommend this alternative because, by using it, you can be certain of closing. After all, you're still the owner until title transfers. Moving day is stressful, even under the best of circumstances. Why create unnecessary stress for yourself by trying to move out while the buyers move in? The sellers of your new home will probably also use the day to move.
- Regardless of whether you move out of your house the day of closing or the following day, make cancellation of your homeowners insurance, utilities, and phone service effective one day after your scheduled closing and move. Carefully coordinate canceling your homeowners insurance policy with your insurance agent to avoid any gaps in your coverage.
Buyers move in after a seller rent-back
Sellers sometimes stay in their house several weeks after closing while waiting to get into their new home. If this situation happens to you, you'll sign a separate rent-back agreement with the buyers that becomes part of your purchase contract. The rent-back agreement covers who pays for utilities and maintenance, what happens if property damage occurs after the closing, how much rent you must pay the buyers, and what penalties result if you don't vacate the house on the date specified in your rent-back agreement.
- Sellers customarily pay rent equal to the amount the buyers must pay for Principal and Interest on their mortgage plus property Taxes and Insurance, so they break even on the cost of owning the house during the term of your rental. PITI, as this figure is known, is prorated on a per-day basis from closing until you vacate the property.
- For example, suppose that PITI is $50 per day, and you expect to be out three weeks after closing. You and the buyers instruct the closing officer to hold four weeks PITI so you both have a cushion if you encounter an additional delay moving into your new home. When you move, you and the buyers jointly instruct the closing officer to pay the buyers $50 per day for the actual rental period and to refund the unused portion of funds to you.
