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Step 15:  Schedule a Final Inspection, cont'd.

Typically, possession day is the day after the close.  This gives you a little safety time for unexpected problems.  If you have to stay in the home longer, you should negotiate a rent payable to the buyers. Generally, daily rent is calculated as the buyer's monthly principal, interest, taxes, utilities, and insurance divided by thirty plus a premium to motivate you to move out as quickly as possible.  This will be credited to the buyers at closing.  Your utilities should be turned off as of the day you leave, not the day of closing.

It is not recommended practice to allow the buyers to take possession before the close.  While inside, they might find something wrong that affects your deal.  Or, they might damage the property and expect you to pay for the repair.  Or, they might burn the house down to your detriment; property damages must be borne by whoever has title at the time of damage.  Be on the safe side; closing day comes first; possession day comes second.

If you must let the buyers take possession before closing, protect yourself.  Make sure that the entire down payment is in escrow. You are entitled to rent for the time that they are in the home; set a rent high enough to encourage a quick closing.  Include a clause in the purchase contract stating that the buyers accept the property "as is" on the day of close.  Ensure that their homeowner's insurance takes effect when they move in.

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