When do I get my keys?

Why can’t I have them when I sign?

If you ask a real estate professional how often they hear this question (and how often it is asked by the buyer’s broker), they will say “If I had a dollar for every time…”

Let me explain why you do not want to get keys before you are recorded, funded, and DONE with your closing.

In our RANM form Purchase Agreement 2107 (otherwise known as the “offer form” to those without a legal dictionary), Funding is defined as

“______. The Funding Date is the date that the closing officer has funds available to disburse to all parties after recording all documents required to complete the transaction (“Funding Date Requirements’). Seller shall provide all existing keys, security system/alarm codes, gate openers and garage door openers to Buyer on the Funding Date.

Well now, that means when the Purchase Agreement 2107 states that possession will occur at Funding Date, all of those above actions must take place, or you don’t have Funding.

But
I want my keys because the moving truck is coming and the papers haven’t come back from the seller yet but it will be like totally inconvenient if I can’t let them in and….

STOP RIGHT THERE COWBOY! This just ain’t gonna work. I know it’s totally inconvenient to have to wait for things like keys and openers and landscapers and painters are wanting in the door…and all of that jazz…but let me give you some real True Life examples of what has happened when keys are turned over early…and even when you use the “Pre-Occupancy” agreement and have everything in writing and the buyer is even paying rent….(full disclosure, these have all happened over the years, so there is still time for you to screw things up!)

1) Buyers can move in and start nit-picking the house. “The sink dripped last night, there was a strange noise, I want more repairs, the neighbor is a nightmare, etc.” They hold the seller hostage and threaten to not close unless more things are fixed or they give them more money, or just back out completely.
2) There is a liability issue for the seller. If the buyer bumps a wall with furniture and breaks sheetrock, or hits a plumbing pipe and causes damage, it’s the seller’s insurance that would have to cover. If the buyer falls or furniture falls on them moving in – technically the seller is liable as the owner of the home. If people helping the buyer get hurt, same thing.
3) This happened recently – buyer moved in a couple of weeks early, then lost the loan at final approval, like when the papers were sent back to lender for final approval and everyone had signed…YES…that happened
4) Buyer moved in early and rain caused a roof to fall in. Mother-in-law was sleeping in the bedroom that fell in and was hurt. Buyer refused to close until they were reassured the seller’s insurance would pay for the roof, damages and mother’s injuries.

In the “roof falling in on mother thing” everyone had signed but we didn’t have lender money. That’s why it fell on the seller. ALSO it gets worse. The buyer wasn’t supposed to have possession until funding (which hadn’t happened with their lender). They moved in without the seller or listing agent knowing – THEN all that happened.

So, convenience can be expensive.

There is no reason that the universe should be designed for our convenience. John D. Barrow

Go forth, buy and sell, but just don’t jump over the procedures for convenience.

Any more questions on real estate, contact me anytime!