“Bundle of Sticks” ” and a Club
[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]
At least in Minnesota (where I sell real estate), Sellers who aren’t moved out by closing ” and thereby risk derailing the deal ” occurs much less than you’d expect.
In fact, in 17+ years in the business, I’ve never had a closing postponed or even delayed by a Seller who wasn’t out of the house yet.
Which is not to say that there haven’t been some VERY close calls, and a deal or two where the Seller made arrangements, post-closing, to retrieve some items, often from the new owner’s garage or basement.
My guess is that there are two reasons for that:
One. One of the good things about “Minnesota Nice” is that people are conscientious about deadlines, cleaning up after themselves, etc.
Conversely, leaving a dirty, debris-strewn home would qualify as an extreme example of “Minnesota Not-Nice.”
On the handful of occasions when the home’s condition, pre-closing, could charitably be described only as “disappointing,” my client requested — and the Seller readily agreed — to cough up a few $$$ towards the inevitable post-closing cleanup.
Two. The Buyer-now-owner has some serious leverage over a Seller who dawdles or is otherwise delayed moving out.
The most potent (albeit heavyhanded) club is the right to exclude the former owner.
As first-year law students (including me, once upon a time) learn, property rights are best conceived of as a bundle of sticks, including the right to: use and enjoy the property; alienate it (give it to someone else); mortgage it; and exclude others.
Implicit in that last right is the right to change the locks ” not a bad idea in any case.
Sellers who don’t want to risk losing access to their personal property have, shall we say, a strong incentive to claim it before that happens.
Other Scenarios
But what if the concern is not just that the home is anything but empty and spotless, but (also) that negotiated repairs are incomplete, there is visible wall and floor damage, or there are material changes in the home’s condition? See, “Final Walk-Thru Checklist for Home Buyers.”
The Buyer’s three options would seem to be:
One. Delay closing. Safest for the Buyer, but risky if their loan lock is due to expire.
Two. Do what’s called a “dry closing”: everyone signs all the paperwork . . . but the Seller doesn’t get their money until later.
Obviously, Sellers usually aren’t thrilled about that option.
Three. Close as scheduled, but create an escrow (holdback) that is only released once the Seller satisfies any agreed-upon conditions.
Given the associated costs and red tape associated with creating an escrow, Sellers are better-advised simply to do what’s necessary to be out on time.
Which the vast majority (somehow) manage to do.
