Short Sale and buyers want to move in before they close

I need some advice.  I have buyers who want to move into a short sale before the closing date.  The short sale property is with Bank of AMerica and set up a closing date of August 24th.  The buyers want to move in sooner because the wife is 8 months pregnant.  The sellers said they would move out to accomodate the buyers.  What should I advise my clients (the buyers) to do.. They are worried that if they move in and put some money into the property  that Bank of America will end up not closing and they woudl loose their time and money... Any advice please!

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Permalink Reply by Christina Conrad on July 19, 2011 at 8:50am
I don't know about anywhere else..but that is a major NO NO in Missouri...the ramifications of letting someone take possession prior to closing is astronomical....if anything is wrong with the house..they are going to expand on that big time..they have the right to have a property inspection, but if there is anything wrong with the house and the seller is unwilling to fix it the buyers could hold up the closing (even though the sellers don't have to fix anything in a ss, the buyers can still ask)....once the buyers are in there, good luck in getting them out of there if it goes awry...those are just a few of the issues...I know a story about a real estate company that did that and the buyers did a bunch of remodeling prior to closing and the bank caught wind of it....then the bank ordered a new appraisal...needless to say the real estate company had to do some major kiss butt to get that situation to go away...I wouldn't advise it....too much quick sand..if you know what I mean.
Permalink Reply by Deidre St. Romain on July 19, 2011 at 8:50am

Don't do it.  Too much liability for everyone involved and I AM SURE NOT endorsed by the lien holder.  Just say NO.

 

Permalink Reply by Courtney Smith on July 19, 2011 at 9:02am
The buyers had the inspection done and everything came back in great condition with a few minor repairs.  I just don't know what to tell my 8 month pregnant client.  They are currently living with the in-laws and do not want to bring their first baby home to the in-laws.  It is a sad and sticky situation.
Permalink Reply by Christina Conrad on July 19, 2011 at 9:21am
I still wouldn't do it...there are a lot of sad stories out there, but the bottom line is you have to protect yourself and the sellers...or whomever you are representing..it is your choice though...just seen it done too many times and never ending up well...

Courtney Smith said:
The buyers had the inspection done and everything came back in great condition with a few minor repairs.  I just don't know what to tell my 8 month pregnant client.  They are currently living with the in-laws and do not want to bring their first baby home to the in-laws.  It is a sad and sticky situation.
Permalink Reply by Sandra Allen on July 19, 2011 at 10:27am
Courtney, I understand that you may be moved by the situation, however I'm quite sure you are aware of the ramifications.  Not trying to sound flip, but protect yourself first.  If this is your livelihood, practice real estate in the way that reflects such.
Permalink Reply by Beverly Cibulsky on July 20, 2011 at 10:38am

Courtney,

You have no clue what could happen by allowing this! It is better to bring the new baby, into the new house after closing and there are no issues, and the New parents have title!and occupancy The entire family moves into their first home together! Be sure and have a nice big teddy bear to great them and a bottle of Champagne!  You wouldnt want mom to be have any stressfull issues prior to, or just after delivery!

What's that saying? The road to Hell is paved with good intentions!

Permalink Reply by Laura Rivera on July 20, 2011 at 1:17pm

Courtney,

Short sale or not, never alllow a buyer to move in prior to close of escrow, even if you have an agreement between both parties in writing. Anythng can happen while they are waiting to record. It is a huge liability to the seller, the bank, your broker and yourself. Don't do it.

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