Giving or loaning keys to a buyer before closing is a really BAD idea!

By
Real Estate Agent with RE/MAX Gold, Fair Oaks

I received a call from a new agent with his first transaction in escrow asking if it is okay to give the keys to the buyers so they could take measurements.  He thought if he said no it would sound like he didn't trust them.

My answer was:  Absolutely not!  Do not do it.  For one thing, an open
Don't give buyers the keys early!escrow is not a sold property.  A closed escrow is the goal, but it is not always the end result of every one that opens.

When I represent buyers, they often ask me for the keys, assuring me that their escrow will close and it will all be okay.  I politely demur, and let them know that I will escort them into the house and wait while they are there.  We need to make sure that buyers understand that it is not a personal attack on their trustworthiness, but is simply something we cannot do.

When I am the listing agent, I owe a duty to the seller to protect their property when they entrust me with their key.  It is my general rule that there is also no exchange of keys at the closing table.  The keys are provided when I am notified that the sale has recorded.  It is then that the buyers legally own the property and not before. 

Don't give buyers the keys early!If the seller asks me to give the keys sooner than that, I will ask them to sign a release to that effect and honor their wishes, but I advise them against it. 

One time my seller and I thought all was done, and the docs had all been signed, but then it was learned that the buyers' bank had not yet wired the balance of the down payment to escrow, and there was a glitch when an outstanding check was processed that made the wire transfer from that account impossible for the full amount. 

The buyer had to go out and get the balance of the down payment in cash from another source, so the recording didn't occur for another week.  If I had turned over the keys and
Buyers get the keys when they are the legal ownershe hadn't been able to bring in those funds, the buyers would be in a home that the sellers still owned.  Bad news!

And as for letting the buyers in "just to measure" or whatever, unless the agent will stay with them while they are there (I have done this on many  occasions with my buyers), no agent should "loan" the keys to a party.  That is simply a bad idea for any number of reasons and is in direct violation of our MLS Rules.


MLS RULE - 13.6 Listing Brokers Permission

MLS Rules require a MetroList Participant or Subscriber be present whenever providing access to a listed property.

A property is considered "Listed" up until the time the listing agreement has terminated or the transfer of title has taken place. You must get permission from the Seller before providing access to individuals if you (MetroList Participant/Subscriber) cannot be present on the property for the entire time.  Do not take keys from a lock box and pass them to buyers waiting to close or trades people wishing to start work without the Seller or Listing Brokers prior permission. Violations can result in fines up to $15,000. 



Bottom line:  Having access to the keys to someone's property is a privilege that is entrusted to you and you are responsible for them.  Do not take that lightly.

******************

 

Susan Neal

Broker / Realtor
Century 21 Noel David Realty
Fair Oaks, California

 

Full time real estate services in Fair Oaks CA, with friendly professionalism, 30+ years experience.
I work hard to give my buyer or seller a low-stress

transaction.

"Happy clients make me happy."


For all your real estate needs or questions, call me at (916)705-8951or visit my website at www.SusanNealFineProperties.com.

 HUD homes resource                  Search HUD Homes


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*******

Thinking of selling your home?  Remember, it costs you nothing for me to come out and discuss your home, the market in your area, and give you a market analysis and presentation so that you will know what you can expect to get for your home.

Call for appointment:  (916) 705-8951


Also Remember, if you are planning to buy a home, I can help you to tour any home for sale in Sacramento County and the surrounding areas, no matter what firm has it listed, and I can help you with your purchase if you find the perfect home for you.

Just give me a call at (916) 705-8951

***********
Susan Neal
Broker / Realtor

Susan Neal Fine Properties
RE/MAX Gold
Fair Oaks, California

Full time real estate services in Fair Oaks CA, with friendly professionalism, 30+ years experience. 
I work hard to give my buyer or seller a low-stress transaction.

"Happy clients make me happy."

For all your real estate needs or questions, call me at (916)705-8951 or visitmy website at www.SusanNealFineProperties.com.    

HUD homes resource            Search HUD Homes

Check out my business page on facebook:  Susan Neal Fine Properties

 

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Topic:
ActiveRain Community
Location:
California Sacramento County Sacramento Fair Oaks
Groups:
1st Time Buyers
BananaTude
M.A.N.C.R.O.W
Realtors®
"Whacked"!!!
Tags:
giving keys to a buyer
letting buyers borrow keys before close of escrow

Comments 57 New Comment

Rainer
9,153
Thomas Haught
The Russell Realty Group

Thomas Haught

No closing means they do not own the house, therefore no keys.  The law cannot be more clear on that one.

July 27, 2011 01:06 AM
Rainer
194,045
Gerard Gilbers
Your Marketing Master
Stingray Performance Marketing

I'm with Mike #48, if the buyers insist they need to be told of the liability and ethics issues of what they are asking you to do. Access is granted with permission and with a licensed agent.

August 01, 2011 01:09 AM
Rainmaker
267,882
Kasey & John Boles - Jon Gosche Real Estate
Boise, Meridian, Ada/Canyon/Gem/Boise Counties
Jon Gosche Real Estate, Boise ID

Absolutely.  I've never had to explain this to a buyer - they get it.  But, I'm surprised at how many times on our listings we "catch" a buyer with keys or the key out of the lockbox hidden for a contractor or buyer that we didn't know was going in.  Bad, very bad. 

August 09, 2011 12:41 AM
Anonymous #56
Anonymous
Home Buyer - Spokane, WA

  Well, how about this boys and girls.  While you all seem to be rubbing each other's backs in support of leaving your buyers out in the cold, I wonder how your buyers feel?  I am currently having a house built, and I work Monday through Friday 8am-5pm.  What is a buyer like me supposed to do about overseeing the progress of the home construction?  My agent seems to have lost 90% of any initiative shown during the pre-purchase (or contract-signing anyway), pre-$20.5k in escrow time period - so where does that leave me?  Answer: seriously contemplating breaking into my own house just to see what's going on...

November 22, 2011 11:16 PM
Rainmaker
582,697
Susan Neal
Fair Oaks CA & Sacramento Area Real Estate Broker
RE/MAX Gold, Fair Oaks

Home Buyer:  I'm sorry you are having trouble overseeing your home being built.  That shouldn't happen, and I would think that someone who has keys should be able to give you access on the weekends. 

What my article was addressing was the instance where an existing home is being sold to a new buyer.  Giving them the keys early can cause many problems because they may begin moving in before the seller is ready to give them possession.  But I always make arrangements to give my buyers access at their convenience.  They do need to take measurements and do inspections, etc. 

I suggest you contact the builder and make an appointment (maybe a standing weekly appointment?) to do your walk-throughs and check on the progress and have any of your questions answered.

November 23, 2011 12:06 AM
Rainmaker
582,697

Susan Neal

Fair Oaks CA & Sacramento Area Real Estate Broker
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