The lender already gave the Clear to Close, the buyer is coordinating everything with the moving company, turning on the utilities, learning the new route to take the kids to school, it is exciting and stressful at the same time. The seller is already counting the money he is going to receive from the sale and planning what to do with it and all the sudden … the closing of the transaction is delayed one or more days or … it will not be closing. Although there are things that are out of our control, there are others that we can do to avoid falling into this situation.
1. Do not Allow the Buyer to Move in Before the Day of the Closing
Horror Story: Maria was buying a condo and everything was ready for the sale to close. Maria’s son had asthma and she needed to change the floors in the condo to tile instead of carpet. Since the seller had already moved out, Maria asked the seller if she could start changing the floors one week before the closing, the sellers accepted. Maria bought all the new flooring and her contractor went to the condo to start the job. He started pulling the old carpet and they saw that there was a gap between the floor and the wall. The contractor tells Maria what he just found, Maria hires an engineer for him to tell her what the problem was, the engineer presents a report that says that there is a structural damage on the building. How much would it cost to fix it? The engineer needed more time and calculations to give a quote. Maria refuses to close, the seller wants to be compensated for damages, Maria doesn’t think he deserves any compensation and wants her security deposit back, both parts hire an attorney, Maria lost $5,000 in attorney’s fees trying to recover her $5,000 security deposit.
NEVER allow a buyer to move in before closing the sale. The property doesn’t belong to the buyer one week before the closing, not even one day before the closing and you could end up involved in a big problem, even a legal battle just because you wanted to be nice. This is business, and you have to handle business like it is, with your head, not your heart.
2. Keep the Utilities on Until the Day of Closing
I had to learn this the hard way. When I was new in the Real Estate business I did not tell sellers to keep the utilities connected until the day of closing or even one day after in case of delays. When the sellers called me to ask if they could disconnect the utilities I used to tell them “absolutely” until one day … I was closing the sale of a house in Clearwater. The seller had moved out of the property and she asked me if she could disconnect the utilities. I told her to go ahead and do it. The buyer went to the house to do his Final Walk Through the day before closing. I received a call from the agent representing the buyer telling me that there was no electricity in the house. I said “No, there is not … why?” The buyer will not sign on the final walkthrough, he refuses to close tomorrow, the agent answered angrily. The buyer demanded the seller to leave $4,000 in an escrow account that would be reimbursed if the final walkthrough was satisfactory, the seller did not accept. I was just embarrassed that I had caused the situation, the seller told me to leave the $4,000 the buyer wanted in escrow from my commission, which I did not want to do either. The closing was delayed until the utility company connected the water and electricity and the buyer was ready to sign.
Keep the utilities on until one day after the scheduled closing, in case there are any delays and you can’t close on time.
3. Leave in the House Everything Attached to the Walls
Anything that it is attached to the wall has to be left in the house unless it was agreed upon from the beginning that the seller could take it. This includes all the window treatments, TV stands attached to walls, light fixtures, ceiling fans etc.
Horror Story: Buyer buys a home that shows like a model home. Everything it is beautiful and the house had been decorated with exquisite taste. The sale closes, but when the buyer moves into the house, he notices that the window treatments had been changed for cheaper ones and the buyer did not notice it in the final walkthrough. The buyer asks the seller to compensate him for the window treatments and the seller refuses to do it. Buyer files a claim in small claims court. The judge determined that the seller has to pay $1,000 to the buyer for him to buy new window treatments.
NEVER take anything attached to the walls, it is not worth it.
Sometimes we don’t think about the consequences that a small action could bring, consult with your agent if you have any doubts about what you can and cannot do. If your agent doesn’t know, he can ask the broker of his company. Remember that when you accept an offer, you are accepting all the terms that the buyer and you have agreed on. You cannot change your mind in the middle of the transaction saying I did not know or I forgot to tell you that I want this … You have to honor your contract.
If you have any additional questions please call Angela at 727 686 1708.