Possession day in real estate marks the official transfer of property ownership from the seller to the buyer, an essential step in every real estate transaction. This day is crucial for all parties involved, the buyer, seller, and realtors, as it is the moment when the buyer takes legal possession of the property, and the transaction comes to a formal conclusion. While possession day brings relief and excitement, it can also be stressful if not properly planned. By following best practices, you can ensure that this day goes smoothly.
In this guide, we will cover possession day in real estate from the perspectives of the buyer, seller, and realtors. Additionally, we will answer frequently asked questions about possession, legal considerations, and various real estate possession types.
Preparing for Real Estate Possession Day: A Buyer’s Checklist
For buyers, real estate possession day is the day they finally receive the keys to their new home. However, several important steps need to be taken before that final moment. Buyers can ensure that property transfer is smooth and stress-free by preparing thoroughly and coordinating with the right professionals. Possession day is the culmination of a buyer’s efforts to purchase a property, but before the excitement of moving in, there are several important steps to complete. A successful possession day in real estate hinges on proper planning and understanding of the real estate process.
Final Walkthrough
One of the most critical steps for buyers on real estate possession day is conducting a final walkthrough of the property. This typically occurs 24 to 48 hours before the scheduled possession date. During this walkthrough, the buyer checks to ensure the property is in the same condition as when they agreed to purchase it. Any repairs that were agreed upon in the contract should also be completed. If the property is not in the expected condition, the buyer has the right to raise concerns with their realtor and lawyer to resolve these issues before the transfer is finalised.
Check for Repairs and Missing Items
While conducting the walkthrough, buyers should ensure that all major systems (such as heating, air conditioning, plumbing, and electrical systems) are working correctly. It’s also essential to verify that appliances or fixtures included in the sale are still in place. It’s not uncommon for sellers to mistakenly take items like curtains, light fixtures, or appliances that were supposed to remain as part of the sale.
Insurance and Utilities
Another critical consideration for buyers is ensuring that their home insurance policy takes effect on possession day. Failing to do so could leave the property uninsured, potentially putting the buyer at significant financial risk. It’s also crucial to notify utility companies (electricity, water, gas, and internet providers) of the possession date so they can transfer the accounts to the buyer’s name. This prevents any interruption of services once the buyer takes legal possession.
Expect Delays
While the possession date is typically included in the real estate contract, unforeseen circumstances can cause delays. Title transfers may not happen on time, funds may not be transferred quickly enough, or issues may arise with the recording of the deed. Buyers should prepare for these potential delays by having flexible moving arrangements and avoiding scheduling movers or deliveries too early on the possession day. Sometimes, the buyer may not receive the keys until later in the day, so patience and flexibility are key.
Coordinate with Realtors and Lawyers
The role of the buyer’s realtor is critical on real estate possession day. Realtors coordinate between the buyer, seller, and both parties’ lawyers to ensure a smooth transfer of ownership. Buyers should communicate with their realtor regularly in the days leading up to possession day to stay informed about any potential issues that could arise.
Understand Post-Closing Occupancy
In some real estate transactions, the seller may require additional time to move out of the property after the sale has been finalised. This is common when the seller’s new home is not ready for immediate occupancy. The buyer and seller may negotiate a rent-back or post-closing occupancy agreement in such cases. This allows the seller to remain in the home for a specified period after closing while paying rent to the buyer. The terms of this agreement, including the rent amount and utilities, should be clearly outlined in the contract to avoid misunderstandings.
Seller’s Roadmap to a Successful Real Estate Possession Day
For sellers, real estate possession day marks the end of their time with the property and the beginning of a new chapter. However, several important tasks must be handled before possession day to ensure a smooth handover to the buyer.
Complete Any Agreed-Upon Repairs
Suppose the sale agreement included a list of repairs or renovations the seller agreed to complete before possession day. In that case, the seller is responsible for finishing these tasks. Failing to complete these repairs could result in legal disputes or delays in the transfer of ownership.
Move Out Before Possession Day
One of the sellers’ most common mistakes is scheduling their move on the morning of real estate possession day. It is essential to be fully moved out before the actual day to avoid any conflicts or delays with the buyer’s move-in process. Leaving the property clean and empty on possession day is crucial. Sellers should adhere to the contract’s requirements, often stating that the home must be left in “broom-swept” condition.
Coordinate Utilities and Final Bills
Sellers should contact utility companies well in advance of real estate possession day to arrange the final readings for electricity, water, and gas meters. The seller is responsible for utility bills up until the possession date. It’s also wise to gather and provide receipts for any prepaid utilities, such as heating oil, to adjust these amounts at closing. Sellers should also notify their postal service, banks, and other services of their address change to avoid future confusion.
Leave a Helpful Guide for the Buyer
While it is not legally required, many sellers leave behind a note for the new owners, offering helpful information about the home. This could include instructions for appliances, contact details for local utility companies, and information about regular services like garbage collection. These small gestures help make the buyer’s transition into the home smoother and can leave a positive final impression.
Prepare for Possible Delays
Although the contract might state that the seller will receive payment at noon on real estate possession day, delays in fund transfers or the deed recording can occur. Sellers should be prepared for the possibility that they may not receive the full sale proceeds until the following day.
Coordinating Success: The Realtor’s Guide to Real Estate Possession Day
Realtors play a vital role in ensuring real estate possession day goes smoothly for buyers and sellers. Their responsibilities range from managing expectations to ensuring all legal documents are processed correctly.
Manage Client Expectations
Realtors are responsible for preparing their clients, whether buyers or sellers, for what to expect on real estate possession day. This includes explaining potential delays in the transfer of keys or funds and ensuring both parties understand their responsibilities regarding the property’s condition at the time of possession. For example, buyers should not expect the property to look exactly as it did during the initial walkthrough, especially if the home was staged for sale.
Coordinate Between Lawyers and Clients
One of the realtor’s primary roles on real estate possession day is to coordinate with both parties’ lawyers to ensure the smooth transfer of ownership. This includes confirming that funds have been transferred, the deed has been recorded, and all contractual obligations have been met. Realtors often act as intermediaries, relaying important updates to their clients and ensuring that any last-minute issues are resolved promptly.
Facilitate a Smooth Handover
For the buyer’s realtor, meeting the buyer at the property on real estate possession day is a significant moment. It’s often the first time the buyer enters the home as the legal owner. The realtor may take this opportunity to present the keys and celebrate the buyer’s new homeownership. Similarly, the seller’s realtor is responsible for ensuring that all aspects of the sale have been completed according to the contract, including the final clean-up of the property.
After-Care and Follow-Up
Even after possession day, realtors often follow up with buyers and sellers to ensure no post-possession issues arise. This could include checking that the utilities were transferred correctly, ensuring that any final repairs were completed, and confirming that both parties are satisfied with the transaction. Realtors rely heavily on client referrals, so providing a smooth and pleasant possession day experience is vital to maintaining a positive reputation.
Final Words
Real estate possession day is a pivotal moment in any real estate transaction. Whether you are a buyer eagerly anticipating your new home or a seller moving on to your next venture, preparation is key to ensuring a smooth and successful handover. By understanding the roles and responsibilities of all parties involved, buyers, sellers, and realtors, you can avoid common pitfalls and make the transition seamless.
Clear communication, proper planning, and attention to detail are the foundation of a successful real estate possession day. Buyers must conduct a final walkthrough, secure insurance, and coordinate with realtors and lawyers. Sellers must move out early, complete any agreed-upon repairs, and leave the home in good condition. Realtors, meanwhile, must manage expectations, facilitate communication between parties, and ensure that all legal and logistical elements are handled efficiently.
Frequently Asked Questions (FAQs)
Real estate possession day is the date when the buyer officially takes ownership of the property from the seller. It is usually the same day that the sale is finalised, although delays in the transfer of funds or deed recording can sometimes push the possession time to later in the day.
The possession date is when the buyer gains physical access to the property. The adjustment date is when the buyer and seller settle financial adjustments such as taxes and utilities.
What is the rule of possession? The rule of possession stipulates that the buyer receives the property in the condition it was when the agreement was made, barring any negotiated changes. The seller is not required to improve the property beyond what was agreed upon.
Immediate possession real estate: The buyer moves in right after closing. Delayed possession: The seller remains in the home for a few days or weeks after closing, often under a rent-back agreement. Early possession: The buyer moves in before the transaction is finalised. Lease-back: The seller rents the property from the buyer for a period after the sale.
An order for possession in Ontario is a legal document issued by a court granting the buyer the right to take possession of the property. This is typically used when the seller fails to vacate the property by the agreed-upon possession date. In such cases, the buyer can seek legal recourse to take control of the property through this court order. What is possession day?
What is the difference between the possession date and the adjustment date?
What is the rule of possession?
What are the four types of possession in real estate?
What is an order for possession in Ontario?
