Lee inherited a house from her great aunt, Ella. The house was vacant at the time Lee listed it for sale. James agreed to buy the home. The parties entered into a written sale agreement. Lee and James also agreed that settlement would take place on or before September 1. Shortly after signing the sale agreement, James asked Lee if he could move into the home before closing. He wanted to get started on the renovations right away. Lee was unsure whether to agree and felt like she needed more information about any potential pitfalls.

In the real estate market, it is not uncommon for a buyer to ask for permission from a seller to move into a house prior to closing. It may be that the house involved in the transaction is vacant. It may also be that the buyer has sold his or her house and needs to vacate the old house prior to the closing on the new house.

General Considerations

For a seller, several considerations play a part in determining whether to allow a buyer to move into a house before closing. Some things for a seller to thing about are as follows:

• Why does the buyer want to move into the house before closing?
  
• Is the buyer willing to pay rent for the period of pre-closing occupancy?
  
• Is the buyer willing to make some type of security deposit?
  
• Does the buyer intend to make any alterations or improvements? If so, of what nature and extent?
  
• Are there any concerns about the buyer's ability to go forward with the closing?
  
• What if the buyer discovers some unexpected problems with the house and attempts to back out?
  
• If, for whatever reason, the buyer cannot go forward at closing, what is the plan to get the buyer out of the house?

Protection for the Seller

The best measure of protection for a seller is to enter into some type of written agreement with the buyer. The agreement should set forth the buyer's rent obligation, as well as any security deposit. Additionally, the agreement should specify what will happen in the event the parties fail to close on the transaction. It may be beneficial for a seller to hire an attorney with expertise in real estate to assist in preparing such an agreement.

Copyright 2010 LexisNexis, a division of Reed Elsevier Inc.