When Does The Seller Have To Move Out On Closing Day?

When Does The Seller Have To Move Out On Closing Day?Most sellers and buyers are at least a bit confused about this question. The standard wording of the Purchase and Sale Agreement says that the Agreement “shall be completed by no later than 6:00 p.m. on the _____ day of ____________, 2011. Upon completion, vacant possession of the property shall be given to the buyer unless otherwise provided for in this Agreement.”  Many sellers think that this means they can stay in the house until 6:00 p.m. on closing day, but actually they are supposed to be moved out as soon as the deal closes, which could be much earlier in the day. If the deal closes at 2:00 p.m., for example, the buyer will get the keys shortly after that and his moving truck could show up well before 6:00.

If the seller is still in the process of moving out when the buyer shows up, it’s irritating but not usually a huge deal. However, if the seller is still there many hours later, it can be much more than just a minor annoyance, and could involve significant added cost for the buyer including overtime for the movers, storing the truck overnight, and possibly a night in a hotel. What recourse does the buyer have in situations like this?

It turns out that this issue has been tested in the courts, and the results were:

  • If the seller is not moved out when the deal closes, then the buyer is entitled to claim damages – that is, the buyer can take the seller to small claims court to recover the extra costs caused by the delay.
  • If the seller is not moved out by midnight, then the buyer can not only claim damages, he can walk away from the deal entirely.

A little bit of foreward planning by the seller’s real estate agents could easily avoid problems like this. The seller needs to clearly understand that the closing could happen early in the day and that he is required to be moved out whenever the closing happens. If he isn’t sure that he can move out quickly enough, then his agent should consider adding a clause giving the seller permission to stay in the house for a few hours after the closing. The Agreement says that “vacant possession shall be given to the buyer upon completion unless otherwise provided for” – so, provide otherwise! An agreement with the buyer can usually be reached easily if the issue is discussed at the time the Agreement is made rather than waiting until the buyer’s moving van is waiting outside the seller’s door.

Often the seller is buying another property and would prefer not to pay for bridge financing to allow him to move into his new house before his present house closes. In some cases, it might make sense to pay the buyer of his property a little extra to allow him to stay an extra day after closing so that he can avoid the bridge financing costs. There’s nothing that says the seller can’t stay even until the day after closing… as long as the buyer agrees.

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