Early Occupancy | Propertylogy

Early Occupancy

By on July 31, 2018

When a deal is struck between a home buyer and seller to transact, and there is agreement between both parties for the buyer to take over possession of the property before formal closing, it is termed early occupancy.

There can be various reasons why such an arrangement is made between willing parties.

For example, the buyer might be incurring huge accommodation costs as his family is being housed in a hotel. Every day that he does not move out of these paid accommodation, the more expenses he is going to incur.

Another reason might be that the seller has already moved out of the home and it’s vacant. So he might be totally fine with an enthusiastic buyer to move in.

Maybe the buyer is a tenant who has exercised the lease option.

Whatever the case, both parties take on significant risks for early occupancy. Which is a reason why these agreements are uncommon.

For example, the seller might have applied great salesmanship to sell the house at a good price even though there were major problems with termites. After moving in early, the buyer realizes what a big problem it is and decides to call off the purchase.

Or in the event of a fire taking place, the seller will be assuming the risks of loss.

Everybody would be happy if no serious incidents occur during the period of early occupancy.

But when things that are serious enough happen, both parties would usually regret the decision for it.

Because of these reasons, while early occupancy is a big gesture of good will, seller often won’t entertain the thought of it even though the house might be vacant.

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