WHY SHOULD YOU NEVER LET A BUYER TAKE POSSESSION OVER YOUR PROPERTY BEFORE COMPLETION
Your agent announces that the buyers who were viewing your home decided to make an acceptable offer. However, they are about to sell their property too and must be out of their current property no later than the end of the month. As your Algarve property is neither inhabited nor rented and you have become quite chummy with the buyers, they are asking if they may move in just after having signed the Promissory Contract and paid the downpayment - or at least just before they complete. It’s very tempting to receive the habitual 10% deposit and to show being flexible in order help to finalise the deal.
What harm could come of letting the buyers take possession of your villa, quinta or apartment a few weeks earlier? Yet, what would happen if the buyer doesn’t sign the final deeds after moving in? Here are a few scenarios which can lead to harmful pitfalls for the vendors:
The sale might fall through due to an unapproved mortgage or some other reason for a lack of financing. I such case, the Realtor has to start at scratch trying to find another buyer for your property. Your Realtor should advise you not under any circumstances to agree in such a situation. People can be very nice, yet when it is about money, they could turn around and show their true colours. What if they simply haven’t got the money to complete? Or just change their mind and decide they didn’t want to close once they take possession?
Imagine, the buyers move into your house, which is still legally yours, and start to make repairs, additional construction, or other changes? Most often, these aren't even genuine repairs, but things the buyers would like to see changed in your house. If the final deeds don't get signed, you might be stuck with the buyers’ improvements and even additional costs for changes you would never have done in the first place. And just think of the risk you run, if the buyer didn’t obtain the appropriate permits for the work?
Another issue is the property insurance. You still own the home, so insurance for the structure is your responsibility. It might lead to nasty consequences, if the buyers don’t insure their personal items on time.
A cardinal rule to live by is to never, ever let the buyers take possession of your property prior to closing. Figure out any other option, but keep them out of your property and avoid losing time, money and nerves.