Possession
Definition and meaning of Possession in real estate.
Possession is the legal right of a buyer to occupy a newly purchased property, which typically occurs immediately after the transaction closes and the keys are handed over.
In more detail
While possession usually happens on the day of closing, the exact timing is negotiated in the purchase contract and can vary depending on the buyer's and seller's needs. Sometimes a seller may request a temporary leaseback to stay in the home for a short period after closing, or a buyer might request early possession before closing.
Both scenarios require specific legal agreements to protect both parties from liability, property damage, or delays. In standard transactions, possession marks the official transition of ownership and control, meaning the buyer is now responsible for all utilities, maintenance, and insurance.
Key facts
| Category | Buying & Selling |
|---|---|
| Typical timing | At closing or as negotiated in the purchase contract |
| Required document | Purchase agreement and closing disclosure |
| Watch out for | Sellers remaining in the property past the agreed date |
After signing all closing documents and completing the funding process, a buyer receives the house keys from their agent at noon, giving them official possession of their new home.
Frequently asked questions
Can a buyer move in before closing?
A buyer can move in early only if the seller signs a pre-closing occupancy agreement, though many real estate agents and attorneys advise against this due to liability and insurance risks.
What happens if the seller does not vacate on the possession date?
If the seller fails to move out by the agreed time, they may be subject to financial penalties defined in the contract, and the buyer may have to take legal action to evict them.
Related terms
Sources & references
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