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Keys handover after closing

Posted by Sandeep00 (My Page) on
Mon, Jan 16, 12 at 11:41

Hi Friends....After months of turmoil, we are finally heading towards a closing in 2 weeks time. The seller is saying that they will handover the keys a couple of days after closing once the funding and all is done. My realtor said that it is a normal practice. Do you guys think it is okay? Should i look for any specific clause to be covered in case there is any damage to the house in those 2 days? Appreciate your responses.


Follow-Up Postings:

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RE: Keys handover after closing

You won't be officially "closed" the seller has received funds and the deed has been recorded. In many states signing does NOT equal closing. After you sign your loan documents they must be sent to the lender for final review. Believe it or not in that short time things can go wrong. As a seller I wouldn't hand over keys until the proceeds of the sale are in my hands.


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RE: Keys handover after closing

I have bought and sold homes in seven states and always received or yielded the keys at the closing.

If the house were to burn down 10 minutes after the closing, see who's loss that is. :-

I am not saying your agent is mistaken, just saying I've never experienced such a situation.


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Signing is not the same thing as Closing

The seller is offering to hand over the keys at closing, but not before. Even though the buyer has signed the paperwork the house still belongs to the seller until the funds are transferred and the deed is recorded. If the house burned down while the seller is still legally on title it would be the seller's loss.


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RE: Keys handover after closing

terriks,

What you are saying is not correct in any one of the seven states in which I have bought and sold homes.

As the seller, my homeowner's policy has always been cancelled at midnight of the day of closing. Are you suggesting that if the home burned down before the deed was registered that I would have suffered an uninsured loss?

Additionally, I have paid property taxes as the new owner from the day of closing and ownership transfer, not some day(s) later. As the buyer, I have had insurance effective the day of closing... I don't think that one can buy insurance on a dwelling that one does not have ownership.

Consider buying a new car and as you leave the lot you total the car. Do you think that you can stop payment on the check and claim that because the car was not yet titled that it was the dealership's loss?

The states I have bought and sold in include: CT, MA, WA,SC,VA, CA, and MD.


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RE: Keys handover after closing

Are you saying that the seller's lender would release their interest in the home before receiving a payoff???

I am telling you that in many states closing does not happen until the seller has received their funds. I would never hand over keys until I had received my pay out.

Google "wet" and "dry" funding for more information.

Here is a link that might be useful: Wet and Dry Funding


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RE: Keys handover after closing

In the neck of the woods where I currently live, it's common to not get possession of the house until some period of time (like 30 days) after closing. This gives the seller time to pack up and move out. I was VERY uncomfortable with this as a buyer, but my realtor assured us it was standard practice. Fortunately nothing adverse happened, and the sellers were actually out a little earlier than the deadline.

If something had happened, it would have been on our insurance dime.


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RE: Keys handover after closing

I listed seven states that permit keys to be turned over at closing. I never said you were wrong and you nor the OP has posted a state for which they claim differently.

Banks are clearly knowledgeable about the goings on at closings in their area, I'm sure you would agree. Mortgage holders require the homeowner to have homeowners insurance to protect their interest.

If ownership does not transfer, as you assert, at closing and the house burns down the next day wouldn't the seller's bank feel terrible that they ignored their knowledge of closing procedures and responsibility transfer and allowed you to cancel your homeowners policy on the day of closing. The fact of the matter is that the seller's bank does not have an insurable interest in the sold property.

I suspect that based on the original post I am sure that there are areas of the country where the PRACTICE is to not turn the keys over for some period of time following closing. As I said, that was not the case in the seven states where I bought and sold.

I apologize to all for belaboring this issue - originally just wanted to weigh in and say that my experience differed from that which the OP was being told was the norm IN HIS AREA.


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RE: Keys handover after closing

In 'dry' states the deal is not completed at the closing table.
The bank still has to transfer money, and sometimes has another shot at reviewing the transfer and all the documents.

In 'wet' funding states the money is typically in the escrow agents hands, and the deal is completed then and there.
'Wet' states often have rules (enforced by the escrow agents at least, or even by law) about only 'collected funds' being used at the settlement table, or strict time limits on funds being released.

Some states are very tight, like Virginia.
The money must be in the settlement agents accounts.
Not waiting for a check to clear, in their account.
The funds have been 'collected' from the lender making the new loan.

There can be real issues with delays between funds and deeds being executed.
Deeds in some states are not 'valid' till recorded, while in others are valid from the instant they are signed by the seller. To add to the variation in some states deeds cannot be 'conditionally delivered.'
That means if you give someone a deed, but place ANY conditions not on the deed as a condition of the deed ('to be recorded after my death' say) the deed is invalid from the start.

Dry states often manage to drag things out a few more days until funds are in the sellers hands.

That means the ownership has changed, even if the seller has not received any money yet.


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RE: Keys handover after closing

We always got the keys at closing and moved in that night. Walk-through of the empty house was always the morning of the closing.
Things sure differ!


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RE: Keys handover after closing

I don't know if this is relevant, but I found it interesting that in Florida you cannot close when a hurricane is even in the FORECAST. We were scheduled to close, but could not do so until what ended up being a tropical storm passed. It was about 3 days. This was about 5 years ago, but it is probably the same now.


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RE: Keys handover after closing

Never heard of not getting the keys to a home one has just purchased at closing time. That has how it has been in all our closings. As posted above, the walk through of the empty house was the morning before the closing and then at closing we received the keys. I don't think I would like having to wait to take ownership of a house that I just gave the seller money for. NancyLouise


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RE: Keys handover after closing

In Florida you CAN close if there is a hurricane in the forecast.
But, you might not be able to get insurance if there is a named storm in a "box" (defined by the insurance company - but generally in the vicinity of the forecast cone) and if your new home is in that box. And your lender won't close unless you have homeowners and flood insurance. So it's normal to have a clause in the contract for closing delays due to named storms.
You'd be able to close in the panhandle if a storm was forecast to go up the Atlantic coast, and vice-versa (depending on your insurance company of course)

All my closings around the country (as a military relocation), we walked-through in the morning and got the keys at the afternoon closing. Funds were transferred on that same day.
There was a post a few months ago from someone wondering why their financial information was going to the title company before closing and someone explained all this, how they start the process of wiring funds (etc) a few days before so that it all completes on the day of closing.


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RE: Keys handover after closing

"how they start the process of wiring funds (etc) a few days before so that it all completes on the day of closing. "

You may never have hit one of the 'dry closing' states.

It is very different than wet closing states.


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reRE: Keys handover after closing

Here is a matrix showing the wet/dry status of states nad some refs to state law and procedures.

I have not checked the table, so verify anything before relying on it.

Here is a link that might be useful: Wet/Dry closing matrix


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RE: Keys handover after closing

Here is another view adding to the confusion about closings.

Here is a link that might be useful: When is a Sale Deemed


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RE: Keys handover after closing

From the link

"Though the buyer's loan has been approved, the wire from buyer's lender doesn't arrive on Wednesday..."

This is why wet closings with collected funds and hard time limits on delivery of the collected funds from the closing company are a good idea.


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RE: Keys handover after closing

This transaction is happening in Texas...if that helps


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RE: Keys handover after closing

I'm in Texas & in 6 real estate purchases (both residential & commercial) I've always gotten the keys @ closing. I think my funds were already at the title company & settled by signing day.


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RE: Keys handover after closing

I'll say it one last time

Signing DOES NOT EQUAL closing

Funding + transfer of deed EQUALS closing


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RE: Keys handover after closing

terriks,

You seem to equate saying something repeatedly makes it right.

Closing is the process of signing paperwork and transferring monies at a given location.

My wife hosts numerous closing companies at her place of business. They are not deed recording companies, they are closing company. Without exception, these companies believe they are hosting Closings in conference rooms my wife provides ... but what do these companies know? Oh wait, they are Closing Companies.

In CA there really never is a Closing where people are in one room... the process is handled by a licensed and bonded Escrow agent who closes the process when all requirements of the escrow are satisfied.


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RE: Keys handover after closing

Closing is the process of signing paperwork and transferring monies at a given location.

I agree with you. But in many states paperwork is signed but funds are transferred at a later date. Signing is one step of the process, transferring the money is the next step. Closing is not complete until the seller has been paid.

The OP wrote: The seller is saying that they will handover the keys a couple of days after closing once the funding and all is done

In other words when the closing process is complete, the seller will hand over keys, NOT when the OP signs their documents (because the process is not complete yet). I see no problem with that. Why would anyone hand over keys until they had received the proceeds of the sale?


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RE: Keys handover after closing

"Why would anyone hand over keys until they had received the proceeds of the sale?"
It is done that way in the vast majority of the USA - as many of have attested to - the reason it is safe is because "someone" has escrowed the monies as either cash, or Cashier checks, etc, etc, as allowed/required by the local jurisdiction and detailed in the links above.

If you think that all of us that haved walked out of closing with the keys in our hands were simply fortunate to have found dumb sellers,, you'd again be mistaken. :-)


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RE: Keys handover after closing

"the reason it is safe is because "someone" has escrowed the monies as either cash, or Cashier checks, etc, etc, as allowed/required by the local jurisdiction and detailed in the links above. "

It may be done this way, but in many dry settlement states the money has NOT been "escrowed" since the bank may not have even funded the loan (that means provide the cash).


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RE: Keys handover after closing

There is no law that says one can't negotiate getting the keys no matter where/who/what or the humidity of the location. I would insist on it.


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RE: Keys handover after closing

We have always been handed the keys at closing when we hand them the check, and signed the papers. The deed being registered depends on how industrious the attorney or agent is in getting it done. It is understood at time of purchase and negotiated if necessary when we may obtain keys and move in. If the selling party is still living in the house, they may state that you can occupy it X days after closing. You know and agree to it when you sign the contract. If you want them out at closing.......and they want you to buy it, believe me they are out of there and you got the keys. If you write a rubber check, I'm assuming you will face the consequences. That's how it's done in my state. It does differ. We handled it just like saltidawg.


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RE: Keys handover after closing

"That's how it's done in my state. It does differ."

Among Western states 'dry' closings are not uncommon.

Nothing closes until the money changes hands.

You may or may not own the land just because the deed is signed.
In some places deeds are not valid till recorded at the court house, while in others the mere act of signing makes the deed valid. Recording only puts everyone on notice about who owns the land.

Since folks on this board are from all 50 states (and an occasional Canadian or other non-US poster) there are numerous methods present.


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RE: Keys handover after closing


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RE: Keys handover after closing

I guess we were lucky in CA when we sold. After a very long time and 2 bad agents, sold the property (rural area) by a great realtor to a person who had been looking in the area for 6 months and had been told our house was under a sale pending (lying previous agent). She liked it immediatly, and accepted not only the house but half the furniture (we moved out of state), yard stuff, wood etc. I had hired a person to clean it after all the stuff was moved, but she came in and found out her DH and friends DH both were in the same law enforcement jobs, she had pets, and I had had pets, said don't worry about anything, I handed her the keys, left the utilites on for a week, so she could get others to help and everything went great. Got the check mailed to me. I feel like I was a very lucky person, and the area got a terrific new neighbor.


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RE: Keys handover after closing

Texas is a wet closing state. You should get the keys at closing.


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RE: Keys handover after closing

The way the title companies handle it in my part of Texas.... they oversee the signing of all paperwork first. When both sides have signed, they spend a couple of hours (or so) funding the loan with the mortgage company. As a listing agent, I'll hold on to the keys until funding, then meet the buyer's agent and buyers at the house to open it up for them. Generally the buyers get the keys the same day as closing.

With a small amount of effort, funding can and should occur soon after closing (signing).

To the original poster...if the sellers are staying in the house a couple of days after signing, ask for a lease back.


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RE: Keys handover after closing

When we closed on our house last year, the only folks in the room were our RE attorney and title agent. We signed the papers and paid with a certified check.

We were told we could pick up the keys at the realty office. Drove by and got them, then went straight to the house. Woo hoo!

Later on our attorney called us and said the sellers agent called and said we weren't supposed to go to the house until the check cleared. The sellers agent had told him he wasn't sure our bank certified check was 'good' and wanted us to wait a day or more for it to clear.

I told him we already had the keys and been to the house. If the realtor wanted to verify that our check was good then they could call our bank. I said the house is ours now. Possession is nine-tenths of the law!

If they had any other questions to go through him (our attorney). We were done talking to them.

They had been a PIA from day one. Even the seller was PO'd with them. The only reason the deal went through was because we and the seller were reasonable with each other. The agency just complicated things.


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RE: Keys handover after closing

"The sellers agent had told him he wasn't sure our bank certified check was 'good' and wanted us to wait a day or more for it to clear. "

BS.

Certified checks are guaranteed funds.

A cashiers check from a bank is NOT a certified check, and is NOT considered collected funds.'

When a check is certified it is embossed by the bank (it can be ANY check) and the funds transferred to the local fed clearing house to be held until the check is presented.

There is no way to stop payment on a certified check, and the only way to retrieve the funds is to present the check (or post a bond).


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RE: Keys handover after closing

At every closing I've ever been to, the seller receives a check at the closing. Keys are passed.


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RE: Keys handover after closing

"At every closing I've ever been to, the seller receives a check at the closing."

Never been in a dry state then.

And even some wet states allow money to follow the document signing party by a few days.


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RE: Keys handover after closing

Thanks for all your suggestions. We have already closed and taken possession of the house. I am posting the details of our process for reference by future TX buyers. I rejected the 2 additional days and rescheduled closing to the date when the sellers would move out. We closed in the morning and the funding had happened by afternoon (2-3 hours later). After closing, the keys were handed over to the title company. The title company handed us the keys once the fund transfer was completed. Hope this helps clarify.


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