There are times when buyers will push sellers, making demands that could be bad news for sellers in the long term. One practice that is creeping in is the handing over of keys before the sale has been settled. One of the causes behind this situation is the market itself – buyers are selling and waiting until settlement on their properties before entering the market to buy. This is leaving them homeless until they settle on their new home. Of course, if the home is empty, why not move in now?

There are several dangers to this practice. The first is obvious. What happens if the sale falls through? The buyer is not a tenant so you can’t evict under tenancy laws, and if the seller has taken some or all of the deposit then the buyer has equity in the home. It becomes a pretty messy situation. The second problem is more frequent. Once the buyer has moved in, there is no sense of urgency to complete the settlement. This can then take months rather than weeks.

If a buyer requests the keys early ‘so they can start to move in’, think twice and make sure you think long and hard. If there is a situation where need is a problem, and that the sale could fall through if you can’t come to some arrangement, allow them to move in as a short term tenant. This will require a lease and all the normal tenancy processes such as deposit and rent. How you negotiate this is up to you, however, don’t be too cheap in the process. If you use market value as a guide then you will receive a fair return.

Of course, a tenancy agreement is not always as easy as it sounds. You may need to check with local state and county requirements – these can sometimes be quite tough with certain requirements and fees needed. Your real estate agent should be in a position to help you in this regard, particularly if they can act as owners agent. They will charge a fee, of course, but since you are not really renting for income, that shouldn’t be of concern.

If the buyer agrees to rent then there are no problems. A tenant can be evicted if problems arise. If the buyer doesn’t agree then don’t be in a rush to hand over the keys – you could be making life harder on yourself.

Related posts:

  1. Would Cash For Keys Encourage You Into A Short Sale?