Dear Heather,

We are due to close on the house we want to buy next week, however, the seller has run into problems finding rental accommodation as something they were going after fell through. Now what do we do?

Buyer

Dear Buyer,

The buyer possession date is sometimes a problem. Some of it has to do with when the seller is vacating, but not always. It can be a headache in real estate transactions, because in life the unexpected happens and circumstances can change. Unfortunately, this is when each of the parties — buyers and sellers — may develop a contradictory expectation of possession.

• The buyer possession date at closing

Possession is typically an issue agreed upon in the sale and purchase agreement.

It’s not unusual for a buyer to receive keys on the day the transaction closes, however, sometimes buyers give the sellers a day or two after closing to move.

Occasionally, sellers rent back from buyers for a short period of say, up to a month, in order to handle moving. Whatever you agree to, make sure it’s in writing.

• Market conditions can influence buyer possession dates

In sellers’ markets, buyers will often give sellers several days to move at no consideration to the buyer. This is to gain an edge in the event the seller receives multiple offers.

In buyers’ markets, buyers will generally insist upon occupancy at closing and have been known to refuse to close if the property is not vacant. In neutral markets, possession is typically upon closing.

Early buyer possession

As a general rule, giving buyers early possession is not recommended because too many things can go wrong at the last minute.

Sometimes, once the buyers are in, they notice little things that need fixing and start placing unreasonable demands on the seller prior to closing. For that reason, it is not advisable for buyers to move in early.

• Seller rents back, retains possession

This happens if the seller wishes to rent back for a short while after closing in order to accommodate a move or, perhaps, the closing on the house they are buying. It is well worth putting it in writing and executing a rental agreement to protect all parties.

As a note to buyers, it is not always reasonable to expect rental to be equivalent to market value or the amount of your mortgage; try to be reasonable as moving is extremely stressful. Most people are not trying to be difficult but are trying to work within their financial and physical boundaries.

Last-minute situations do arise: the banks do not transfer the money on time, there is a delay in receiving paperwork that has been sent overseas, etc.

The seller (or their lawyer) is not obliged to hand over keys until the house has legally closed. Buyers are usually excited and want to gain access even if it’s just to steam-clean the carpets, but it is still not wise to release any keys until the property has closed.

In Bermuda, the standard bar association sale and purchase contracts allow a ten-day leeway in closing to allow for unforeseen circumstances. It is a good idea to forewarn your buyers so that they are aware in advance that the closing date is not always cast in stone.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate.