Thursday, June 12, 2014

Being “nice” does NOT mean being stupid!

There are times when a home is being bought and sold that unusual circumstances may arise. I have seen situations where either the buyer wanted to move in before closing or the seller needed to remain for a period of time after the closing due to personal circumstances of one kind or another. I have always warned both parties against this type of arrangement.

First of all I would like to say that I understand that unexpected things happen in life that no one can prepare for. I believe that most people want to help others when they can. Something as small and seemingly insignificant as allowing the person that you just bought your home from to stay an additional week after closing because their new home closing has been delayed and they have nowhere to go might not seem like such a big deal if you can accommodate, right? After all, if you can stay where you are without undue hardship why not help them out of a difficult situation? Well, actually, that just isn’t the case.

By allowing such a request you are now entering what can legally be considered a landlord-tenant agreement and that can change everything. As an example, what if the unthinkable happens and their financing falls through? What if suddenly they can no longer buy the home that they were supposed to move into after selling you theirs? As the new owner you do own the property but how do you get the previous owner to leave if they refuse due to circumstances? Court trials take time and where will you be living if it goes that far? Can you afford to pay rent and the mortgage on your new home at the same time until the matter is settled or the tenants finally move out?

As if that isn’t enough to consider there are many other things that can happen as well. Insurance issues are another major concern. Many policies do not take effect until the new owner actually takes occupancy of the new home. This means that as the policy from the previous owner has no doubt elapsed that your new home may be without insurance protection of any kind. What if there is a fire or some other kind of emergency and the home is damaged? What if the people living there now damage the property in some way? This list can go on forever and it doesn’t get any better.

If I haven’t convinced you yet that this type of situation is not in your best interest, than consider this. So far we have talked about the worse that can happen, so let’s consider those things that are much more likely to occur. It would not be unheard of for the previous owner to leave the home in less than perfect condition even if they do stay for a very short period of time. Even if there are no huge tragedies that happen during this time period it’s for sure that there is going to be some type of misunderstanding. Perhaps they mistakenly take an appliance or some item that was originally supposed to stay. Maybe they forget to tell you about the stain in the carpet that occurred a few days ago or maybe they simply forget to lock the door when they leave!

No matter how small or innocent the misunderstanding these types of situations are never going to be perfect and I believe that it’s so much simpler for both parties involved to simply go about it the old fashioned way; the seller leaves, the buyer moves in, period. Helping others is always a great thing to do but risking the biggest investment of your life is foolish regardless of the reason.

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