Planning To Sleep In Your New Home Tonight...What's Plan B?

Real Estate Agent with Allen Tate Realtors Chapel Hill, NC 919-819-8199

It's Closing Day! Everything has gone like clockwork and you have nothing but the formalities of closing between you and home ownership! The mover's truck is in the driveway and your family and friends have gathered to help you move in. Tonight you will spend your first night in your new home!

Sleeping Lions at the NC Zoo in Asheboro, NC

THE PLAN: You'll spend an hour at your attorney's office with your Realtor, signing all the closing documents, and then you'll be presented with the keys to your new kingdom. You'll head straight to your new home, open the door for the waiting crowd and let the unloading begin! You will happily eat pizza while sitting on the floor, hang sheets over the windows for instant privacy and search high and low for the bath towels that somehow ended up in an unmarked box. But that's all part of the fun. What could possibly mess up this day?!

REALITY: The phone rings just hours before closing. The loan package from the lender has still not arrived at your attorney's office. They cannot prepare your HUD-1 closing statement for signature. The underwriters have been doing their final perusals before issuing the package and releasing the funds you need to buy your home. They have hit a snag. (I'll leave it at that...the form those snags can take in this new world of lending can be myriad.) Your attorney, your lender and your agent all assure you that it will be worked out. But...your closing is going to be delayed! A couple of hours? Maybe. A full day or even two? Possibly.

PLAN B: First, let's talk about what Plan B is NOT. It is NOT that you will call your agent and ask them to get you the keys so you can move in anyway. It is not that you will unload the entire contents of the van into the driveway and wait. The movers need to unload and get on to their next job? I hear you. You have a tight schedule the next day/week/month and NEED to have the initial phase of moving behind you by tonight? I hear that too. The whole family is with you and a hotel will cost you a fortune? Yep, I get it.

Unfortunately this is what you need to hear. The seller still owns the home. This means the seller STILL carries the insurance on the property OR may have canceled it effective this morning. Stuff happens. This new home is unfamiliar territory so how about a worst case scenario; a child or a friend is seriously injured on the property. Someone leaves packing paper on the stove and a fire starts. Insurance only covers “stuff” if they can't prove it isn't their responsibility. Your “stuff” is not the sellers “stuff” and therefore the seller's insurance is most likely NOT going to pay for it, especially if you are in the home without the seller's agreement. Since you do not own the home until you have closed on it, your insurance is most likely not going to pay for anything that happens either, under the theory that you cannot insure what you do not own. A better Plan B is clearly in order.

A BETTER PLAN B: Give yourself a buffer of at least a day between closing and moving in.

Don't close on a Friday because if things go south you will be waiting until Monday to close. (Talk about a quick way to mess up your carefully laid plans!)

If you absolutely must move in on your scheduled closing day, negotiate ahead of time, through the agents involved, exactly what will happen if your closing is delayed. In North Carolina you may be able to negotiate a Buyer Possession Before Closing agreement. Keep in mind that the seller is not required (and in most cases not smart) to give you occupancy until you own the home.

Talk to your insurance agent and ask if there is a plan available that would cover such a scenario.

Above all, understand that some things are simply out of the hands of even the best lenders, agents and attorneys. Plan B may not necessarily be your ideal but it is always better than the alternative...especially if you don't have one!

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SarahGray Lamm is a licensed, full time, residential real estate professional in the Triangle area of North Carolina with over 100,000 hours of experience. She specializes in serving the real estate needs of home sellers, home buyers and investors in Chapel Hill, Carrboro, Durham and Northern Chatham County and is proudly associated with Allen Tate Realtors, the Carolinas #1 independent realty company.

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Disclaimer: Comments and contributions via (or other electronic or print media) do not establish an agency relationship with any third party. Blog posts are intended to be informational only. Please be advised that real estate practices vary by region, from state to state and from market to market. The information contained herein does not constitute legal advice. All parties in need of legal, accounting, tax, or real estate guidance are directed to consult with the licensed professional of their choice. Please seek specific guidance from a retained professional in the specific field(s) required to service your interests.



Re-Bloggged 10 times:

Re-Blogged By Re-Blogged At
  1. Karen Fiddler, Broker/Realtor 08/14/2010 11:52 AM
  2. Mary Kay Hopkins 08/14/2010 12:11 PM
  3. Roy Kelley 08/14/2010 12:16 PM
  4. Steve and Jan Bachman 08/14/2010 12:25 PM
  5. Dan Schwieder 08/14/2010 01:43 PM
  6. Ellen Dittman 08/14/2010 03:09 PM
  7. Jeff Rainwater 08/14/2010 04:06 PM
  8. Mike & Eve Alexander 08/15/2010 08:37 AM
  9. Joel Weihe 08/19/2010 07:14 PM
  10. Karen Kruschka 09/17/2010 01:18 PM
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Real Estate General Information
North Carolina
Club Chaos
Diary of a Realtor
North Carolina Real Estate
closing delays
moving in
north carolina real estate
lending issues

Comments 62 New Comment

Karen Kruschka
- "My Experience Isn't Expensive - It's PRICELESS"
RE/MAX Real Estate Connections

SarahGray With 34 years under my real estate belt that is one of the first cautions I discuss as we are writing the offer.

August 15, 2010 03:00 PM
Kathryn Acciari
Realtor - CDPE, CIAS, Sturbridge MA Real Estate
RE/MAX Professional Associates, with offices in Sturbridge, Charlton, Auburn, Spencer, and Shrewsbury

Great post!  I always advise my sellers and buyers to have a back-up plan. 

Hit up relatives for temporary quarters.  Get a storage facility for a month.  Pay the moving company to store your belongings on the truck for a day or two.   Oh, that's the operative word:  Pay.  People don't want to have to pay to have their belongings in temporary storage.  It always comes down to the money required.  Many people would rather chance it, and they end up spending more money than if that had made a plan.  It's a shame.

August 15, 2010 04:08 PM
Missy Caulk
Realtor - Ann Arbor Real Estate
Missy Caulk TEAM

SarahGray, this is true, that is why we try our best to NOT close on a Friday, then they might be in a hotel over the weekend and not one day.

We discussed at our board meeting starting to add a clause to give the sellers 3 or 4 days to move. We have always had possession on the day of closing and with packages being late, this could be better for both parties.

We shall see....

August 15, 2010 05:46 PM
SarahGray Lamm
Realtor - 100K Hours of NC Real Estate Experience
Allen Tate Realtors Chapel Hill, NC 919-819-8199

Dear Consumer, thanks for stopping to comment! Would that it was that simple. Unfortunately in this lending environment the consumers right to an advance copy of the HUD-1 is often met merely hours before the scheduled closing. Your agent should be ready to review it with you whenever it arrives and closing should not take place until you have had that opportunity. Lenders today are conducting last minute checks and reverifications of information, which they have previously collected from the consumer, in order to protect their own interest. When this happens depends on the lender, the underwriters they use and can frequently be compromised by a buyer who makes a last minute large purchase, like furniture for the new home, or one of the buyers quits a job or sells a business which was used to qualify for the loan.

I agree that your surmise regarding having a HUD-1 a full day before is a safe bet for a smooth closing, it simply doesn't happen often and influencing a underwriter who is doing the last minute processing on a stack of loans is not as simple as asserting your rights.

In my last 25 closings I have had two delays. One was my buyer and one was my listing. There were circumstances which were well beyond the control or influence of agent, lender or attorney. In the case of my buyer it was beyond their control as well. Most often these days I am very happy if we get a HUD-1 the night before. I do not spend my time simply hoping for one but am actively engaged with the lender rep throughout the entire process. It is for this reason that I usually know how things are progressing. As I said in the post though, stuff happens.   

It would be nice if the world worked the way it was planned but anyone in real estate for any length of time understands that flexibility and patience are the keys to success. I stand by my suggestion that having a Plan B is in the best interest of the consumer and it is better to have that plan in place BEFORE you are only getting one days notice!

August 18, 2010 06:42 PM
Joel Weihe
Helping you to use your VA home loan benefits
Realty World Alliance

Reblogging!!! So important a reminder!  Thanks for sharing!


I just had one delayed by 10 days.... Thankfully the sellers are all settled in their new home.  But their bridge loan is tacking fees on like crazy.  And the buyers are sitting in a moving truck, with nothing but an air mattress in their old home, because the buyers of Their house were using BOA.   Tomorrow we close and everyone can finally get settled in.  But whew, what a mess!!  We had a HUD... unfortunately, the closing down the line from us did not. 



August 19, 2010 07:17 PM

SarahGray Lamm

Realtor - 100K Hours of NC Real Estate Experience
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"I have over 100,000 hours of real life NC real estate experience and I am not afraid to use it to help my buyers and sellers successfully achieve their goals!" Malcolm Gladwell’s book OUTLIERS, says "10,000 hours of practice is required to achieve the level of mastery associated with being a world-class expert – in anything." SarahGray Lamm exceeds that 10 times over!

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