The Perils of Taking Possession Before Closing

taking possession before closing

By: Gina Roberts-Grey for Realtor.com

Timing your move out of one house and into another is a delicate feat that might seem as tricky as determining the next GOP presidential nominee. Trickier, even! In addition to the usual stress of packing and arranging to have your things transported (we’re talking about housing again), you also need to coordinate with the current owners of your new home and the incoming residents of your current home. And since no one wants to pay another month’s rent or mortgage, it’s awfully tempting to move into your new place even if the closing isn’t quite final yet.

But taking possession of a home before your name is on the title could open a Pandora’s box of problems—for buyers and sellers.

Why buyers should move in with caution

Buyers who move into a house before closing lose some of their bargaining power, says Daniel C. Price, president and CEO of OneTitle National Guaranty Co. in New York City.

“Any unresolved title issues could be problematic for buyers moving in before closing,” he says. “Buyers might lose the leverage necessary to clear issues like judgments, liens, and even old mortgages, since they will have a much harder time walking away once their possessions are in the house if these title issues are not resolved.”

Buyers also lose the ability to voice concern or negotiate over any last-minute issues with a home’s condition.

“A final walk-through prior to moving in should always be conducted,” says Price.

The question of who pays for what also comes into play. If you move in early, the seller might expect you to fork over cash for utilities used before the closing. Even if that doesn’t amount to much, the squabble could delay closing.

Another concern: coverage in the event of theft, fire, or other calamities.

A home insurance policy on a new home doesn’t take effect until closing, and a property is legally in the possession of the buyer, says Ken Davidson, principal at Eagle Independent Insurance Agency in Dallas.

So any damage that happens to the structure is covered by the seller’s home insurance, he says—but that doesn’t include damage to, or loss of, your personal property.

However, such damage or loss could be covered if you have a homeowners insurance policy on your current home that has “off premises” property coverage. The coverage limit, however, is usually 10% of the total personal property limit.

Why sellers face risk, too

Price says sellers who hand over the keys before closing could also be in trouble if the deal falls through.

“If something happens and a buyer backs out last minute, sellers could face the costly and lengthy process of eviction proceedings. Not only is that a hassle, it will delay the ability to relist the home.”

Sellers also run the risk of having their home insurance claim history dented.

If the buyer’s movers damage the house, or if their buddy slips down the stairs while helping out, you as the seller are liable. Your insurance covers this kind of damage and injury (to the extent dictated by your policy), but the fact that you’ve had to file a claim could jack up the premium for the policy on your new home.

Davidson recommends talking to an insurance agent and the real estate agent and attorney, if applicable, handling the sale before shaking hands on any preclosing deals.

“One five-minute phone call could prevent a huge headache.”

 

 

[divider_top]

Packing for a Move? Don’t Put These Items on the Truck

packing for a move

By Erik Gunther: Realtor.com

Before you pack everything and open the door to your mover, keep in mind that some items may be hazardous — or even illegal — to put on the truck.

Generally, don’t pack anything that’s flammable, combustible or explosive.

Sounds easy, right?

Well, that simple rule of thumb covers many common items that you might not realize are a risk. Make separate arrangements if you need to move any of the following items that make movers balk:

  • Aerosols
  • Ammunition and guns
  • Charcoal
  • Cleansers containing bleach or ammonia
  • Fertilizer
  • Lighter fluid
  • Nail polish remover
  • Oil or gas of any sort
  • Paint cans
  • Pesticides and poisons

Another tip: Don’t try to sneak any of the above items into your moving boxes. You could be breaking the law, according to the U.S. Department of Transportation:

“Federal law forbids you to ship hazardous materials in your household goods boxes or luggage without informing your mover. A violation can result in five years’ imprisonment and penalties of $250,000 or more.”

Besides hazardous goods, movers won’t touch anything needing special attention, such as refrigerated or frozen food, plants or pets. You’ll have to find other ways to get those items to your destination.

There’s one other category of stuff you shouldn’t just hand over to your movers — high-value items. Your movers will take them, but think twice before packing them away. If you have jewelry, priceless collectibles, precious metals, or heirlooms that aren’t easily replaced, you should take them yourself.

[divider_top]

Ways to Make a Cross-Country Move Feel Like Moving Across Town

Realtor.com: Ann Miller

A new job. A bad romance. Because it’s there. . . . . The reasons for moving across the country vary as much as the people who do it. Whatever your reason, there’s usually a lot of stuff that needs to make the journey with you. Moving long distance can be logistically daunting, not to mention expensive.

We’ve rounded up some tips to help you haul your goods from Point A to Point B.

Ditch as Much as Possible

Will those Ikea shelves survive the journey? Do you really need clothes you haven’t worn in three years? A long move can be a good reason to finally clear out all the clutter you’ve accumulated. Be picky, more than you would for a local move. Plus, what works in your current home may not fit or look right in your new place. If you have the time and patience, hold a garage sale to sell all the items you don’t need, or post them on Craigslist. Save the cash you earn for buying new furnishings for your new place.

Inventory What’s Left

Staying organized wards off so many potential headaches. You’ll have a better idea of how many boxes to get, what size you’ll need (for moving yourself, or for hiring movers), and you’ll be able to easily pinpoint anything missing when you unpack at your destination.

Set Your Budget

Some estimates suggest a modest cross-country move will cost around $8,000. Movers might offer a discount during the off-season, October through April — it’s worth asking. There are other ways to cut costs. You can pack yourself, hire movers just for the heavy lifting, or go fully DIY with generous friends and pizza. If you’re moving for a new job, your employer might help cover the costs. If not, some of those costs may be tax-deductible.

Research Alternatives

It might be worthwhile to ship goods via airline or Greyhound. Those baggage fees you loathe when going on vacation can seem pretty reasonable when compared to the cost of hauling boxes by land. One woman shipped seven boxes on Southwest Airlines, including shuttles to and from the airport, for $310 — almost $300 cheaper than the U.S. Postal Service. Greyhound Package Xpress will carry larger pieces on buses for lower fees, but beware — while some customers rave about the service, there are stories of lost goods never reclaimed.

Pack Tightly

Movers and shippers charge by box, not weight. So it behooves you to put as many items as possible in one container. You’ll still need to be careful with your valuables, of course.

Have Fun

Try to build in some extra time and pick a route that includes a few places you’ve always wanted to see, or revisit. If you’re driving, state and national parks are good options for scenery and the chance to stretch your legs. If you’re flying, see if you can snag a long layover and treat yourself to some time in a new city.

Give It Time

You took your inventory, set your budget, packed your goods, and planned a route. But pets, children, the weather, road work if you’re driving, or flight delays if you’re flying, are just a few of the things that could hamper your plans. The longer the distance and the more parts to your move, the more opportunity for delays. Build in plenty of extra time, and some extra cash, so bumps along the way don’t derail you.

Bonus

If everything goes smoothly, you’ll have extra time to relax and unpack at your destination, and maybe pamper yourself a little. You deserve it — long-distance moves are tough.

[divider_top]

Take the Stress out of Moving

moving

Realtor.com Team

Take the Stress out of Moving

Moving is one of the most stressful events in a person’s life. In a recent study, researchers ranked moving as stressful as the death of a loved one or divorce. But it does not have to be that way. With the right kind of planning and care, you can take the stress out of your move.

One of the greatest mistakes people make is failing to plan ahead. Waiting until the last minute — especially during the busy summer season — limits your options and may mean you can’t secure the professional services of a reputable mover on the date you prefer. Poor planning can also lead to less caution in selecting a mover, which can result in a poor moving experience and can increase the risk of being robbed by criminals posing as movers.

We suggest you begin making arrangements at least four to six weeks before the moving date. Consider printing a copy of a moving checklist and consulting other useful advice found on Moving.com.

Most people elect to move during the summer, when the kids are out of school and when vacations are normally taken. This means that from May to September movers are extremely busy. If you can arrange for your move at another time of year, you are competing with fewer potential customers and have a much better chance of securing a high-quality move from the company of your choice. Also, most movers offer better pricing during the off-peak season that generally runs between October and April.

Most people prefer to move at the beginning or end of the month, because most rent and mortgage payments are due on the first of each month. So, if you can move in the middle of the month, you have a much better chance of not only securing the moving professional you want, but also the pickup and delivery dates you require.

The American Moving and Storage Association contributed to this post.

This article originally appeared on Moving.com.

[divider_top]