VOL. 37 | NO. 18 | Friday, May 3, 2013
There’s a stranger in my newly purchased house
One of the terms of any real estate contract is the possession date. For years, it was customary for possession to be given on the DOD, or date of deed.
In other words, if the house was to close on May 3, that is when possession would be given to the buyer.
Then there was the interpretation of whether that means midnight the date of deed or the time that the deed was signed.
In either case, the time was at issue.
Many real estate agents began writing that possession would be DOD+1, or date of deed plus an additional day. That condition gave buyer and seller alike an extra day to ensure that the house closed and then they could be on their way. That worked well until the first fire.
The seller had become the tenant, or lessee, and the buyer (owner) was now a landlord or lessor. If the new owner had not informed his agent of the arrangement and the seller had not purchased renter’s (content) insurance, the insurance carriers could deny the claims.
To make matters worse, seeing that the DOD+1 had worked so well, many agents decided that +2 was even better and +3 eventually came into vogue. Once again, if there is one sale for the buyer and seller, everything is kosher.
What happened when there were dominos? If Andy Griffith sold his house to Barney Fife, and those were the only two transactions, that would be a satisfactory arrangement. But what if Otis Campbell sold his house to Floyd the Barber and Floyd had bought Ernest T. Bass’s house, who had bought the Darling’s mountain home.
Then, they all couldn’t have DOD+3. So the Tennessee Association of Realtors designed a contract that has a blank to be checked for possession to be given “with delivery of warranty deed and payment of purchase price.”
While that is explained to most sellers when the contract is presented, the possession section continues to confuse. As the closing date nears, the sellers often ask: “How long to I have to get out?”
The answer is the day of closing. “That’s impossible” the seller retorts.
And with good cause, as many loans do not close on time. Most do. What if the seller vacates and is to use the funds to close on another house, and that house needs those funds, and down the line.
The answer is to adhere to the letter of the contract. And that usually means to move in a day. Whatever it takes, be gone.
Sales of the Week
While the entire area is alit with homes selling the first day on the market, East Nashville, Lockeland Springs in particular, is ablaze.
Fran Patton of Pareto Realty listed the house at 1502 Ordway Place, which sold right off the bat for over list price. Fran listed the 1,758-square-foot home for $360,300, and Melissa Lundgren of Village Real Estate Services was on the ball and had her buyer pay $361,000, just enough over to secure the property.
Fran Patton states the house has new plumbing, new HVAC, a tankless water heater, a new upstairs and a new French drain. The owners had paid $240,000 in 2011 and realized a well-deserved profit after investing before the new real estate boom. The home has three bedrooms and two baths, one on each level.
Gary Ashton, the mega producer with RE/MAX Elite, sold a “fabulous home” with “gleaming hardwood floors” and “an amazing closet and kitchen pantry. Granite, custom cabinets, tile, closets galore and a huge rec room.”
With 3,008 square feet, it is large for the area and has three bedrooms and two and a-half baths. There are not many half baths in East Nashville. The owner had paid $285,000 for the home in 2008, a year that lives in financial infamy.
Cindy Anderson Crocker with the Wilson Group represented the buyer, who paid $359,900 for the home that Ashton had listed for $359,900. The East Nashville homes remain on the upswing.
Richard Courtney is a partner with Christianson, Patterson, Courtney, and Associates and can be reached at firstname.lastname@example.org or followed at @movetonashville.