Why wait until after settlement?

Once you have bought a house, chances are you can’t wait to move in, for any one of a number of reasons, ranging from excitement to a timing need because you are vacating other premises.

You want to move in as soon as possible, but when does this actually mean?

Settlement marks the time when the buyer legally owns the property.

As tempting as it is, it is best not to make that move until after settlement – of yourself and/or any belongings; and the reasons for this are as valid for sellers as buyers.

And here’s what you may be avoiding:

Murphy’s Law

Murphy’s Law is a popular adage that says ‘anything that can go wrong will go wrong’, which originates from US aerospace engineer Edward Murphy Jr (1918 - 1990). So, what happens if a buyer moves in before settlement and the buyer’s things disappear in the middle of the night or come to mysterious harm? Or the day after a buyer moves in, something that was fine the day before breaks, leaks or malfunctions?

Who’s liable?

The seller is liable for the buyer’s belongings and any damage that these incur UNLESS there is a written pre-occupancy or lease agreement in place, as well as proper insurance coverage established on behalf of both parties.

Let’s get into it

Once a buyer has access to what will soon officially be their home, they are often very keen to make improvements or changes. So, the buyer is spending money on a property they don’t own, the seller is likely liable… and remember Murphy’s Law! Nobody’s going to be injured falling off a ladder, or accidentally sever plumbing and flood the place… are they?

Fear factor

It can happen… the buyers, now they are actually in the home day and night, change their mind about liking it, they get a bad case of cold feet about buying, or they see something they think is ‘better’.

Finance back-flip

Of all the ‘what-ifs’, this is possibly the most unfortunate. Although the buyers had been pre-approved for a mortgage and were super-confident, something happens and they no longer qualify for the loan. And it can go from bad to worse here if the buyers want to rent but the sellers want them out because they want to sell. In the worst-case scenarios, eviction and property damage have occurred.

Agents handle some tricky questions from buyers and sellers, and the question of ‘when’ is one of them.

‘Would it be possible for us to put a few things in the house just before settlement?’ Invariably comes up: Or, if the seller is not living in the house, the buyers might ask to take possession a few days or weeks before closing.

The agent might want to say ‘okay’ because they genuinely want to help out the buyers whose lease is up or are in a better position to move prior to settlement; however, through experience, agents know that allowing a buyer to move in anything, let alone themselves, prior to settlement is an unnecessary risk that is best avoided.