How Long After Closing Can You Move In? Guide for Homebuyers
Signing your paperwork on closing day is an exhilarating experience. After years of saving and months of going through the real estate process, your dream home is finally yours!
There’s just one thing: While you’re technically now a homeowner, your move-in date is probably not the same as your closing date.
In this post, we’ll discuss everything you should know about your post-closing period, including how to strike a deal with sellers when discussing a move-out timeline, what’s involved in funding your loan and recording your Deed of Trust, and what not to do after you close.
How Long After Closing Can You Move In?
On average, homebuyers move into their new place around 7-10 days after completing the real estate transaction. Depending on the seller’s circumstances, the amount of time may be longer.
Creating a Move-In Timeline
Setting an initial occupancy date occurs earlier in the homebuying process than you might think. This is usually included during the negotiating and offer acceptance phase of the transaction and is then documented in your purchase agreement.
However, this is also subject to a number of factors, including potential delays because of home inspections, appraisal contingencies, or substantial life changes, to name a few. Even if the home purchase process is going swimmingly on your end, there’s no shortage of reasons why the seller may not be ready to move out before your agreed-upon date:
- Sellers may need the funds from your home sale to buy a new house
- They’re still waiting to get their rental application approved
- They want to ensure the closing process is completed before moving out
- They’re experiencing scheduling issues or had a family or work emergency
- Moving or moving out is taking longer than they anticipated
When negotiating a move-in date with the seller, you typically have three options at your disposal that could work for you and the seller:
1. Renegotiate Your Move-In Date
If your purchase contract specifies when a seller is moving out, but that’s no longer realistic come closing time, you have to renegotiate and come to a compromise.
Whether you’re moving in early or the seller is moving out late, you need to get on the same page, then get your amended moving dates in writing.
2. Lease Back Agreement
It’s usually not too big of a deal if the seller needs an extra week, but needing a few months is another story. It’s also unfair to you as the new owner, so the seller should provide just compensation for the inconvenience.
In a lease back agreement, you lease your new home back to the seller and collect rent from them daily, weekly, or monthly. This rental income should cover your mortgage payment while the seller searches for a new address.
Your lease back agreement should define:
- How much on and on what date rent will be collected
- How often rent is paid
- When the seller must move out
Sellers should also agree to a final walk-through of your new house in case anything got damaged during this transition.
Lease back agreements often mute the excitement of new homeownership, especially if you’re a first-time homebuyer.
Just remind yourself that this is a short-term agreement and that you’ll be moving in soon enough!
3. Temporary Housing
It’s not ideal, but sometimes it happens. If you and the seller cannot find a compromise, one of you might have to secure temporary accommodations and put your belongings in short-term storage. Not only is this expensive, but it also requires you to move twice.
Can You Move In Before Signing the Closing Documents?
In rare situations, you may have the option to move into your new home before completing the closing process. For example, if the sale of your old home is finalized before the sale of your new one, the seller might let you move in early to avoid moving twice. If you’re a renter and it’s early in the month, they might also agree to this so that you don’t have to pay a full month’s rent.
But again, these options are rare. Here’s why:
- The seller must already be moved out
- If the sale falls through, you must immediately move out
- The home may not be in the same condition as promised, which can lead to the sale falling through
- There are liability and insurance risks
- There may be legal implications if you fail to move out by a specified date or if you’ve made any changes to the home
To avoid some of these issues, you and the seller should make a separate lease agreement from your purchase agreement. Still, moving in before the closing process is complete is rarely recommended.
The Funding Process
The closing process has so many moving parts. Once you sign your closing disclosure, one of the last things you must do is wire your funds to close the escrow.
These funds include your:
- Earnest money deposit
- Down payment
- Homeowner’s insurance
- Prorated property taxes
- Closing costs, which include items like title insurance, attorney’s fees, underwriting fees, etc.
- Homeowner’s Association (HOA) dues, if you have an HOA
Once you sign your closing documents, they’re delivered back to your lender’s funding department, where it gets put under review. They will sign off on the documents and make it official upon approval. This usually happens two to three days after you sign everything.
Next, you’ll receive your Deed of Trust, which outlines the rights and responsibilities of you, your lender, and your third-party trustee. These include your loan amount, interest rate, repayment terms, and any applicable penalties and conditions related to your home loan.
You’ll also be informed of when your first mortgage payment is due, which is usually on the first of the month after the first full month past the day you close. For example, if you close on July 16, your first mortgage payment is due on September 1.
What Not to Do After You Close
Did you know that your mortgage can be denied after closing?
After everything you’ve gone through, you don’t want to make a mistake at the finish line. Here are a few things you should absolutely not do during the closing process:
- Anything that impacts your credit score. Don’t close a credit card, apply for a new one, miss a payment, or reduce your credit limit. If your credit score drops, your mortgage lender may not approve you for your loan.
- Make a major purchase. Major purchases can impact your debt-to-income (DTI) ratio and disqualify you from your loan. Don’t buy a new car, luxury hot tub, or anything else expensive.
- Quit your job. If you change jobs or lose your income, you risk losing your loan. Also, make sure your employer knows that you’re applying for a loan and that they should be expecting a call from your lender. Ignoring this call could postpone your transaction.
- Make any major renovations. Wait for the dust to clear before you start creating new dust. Home improvement projects can get expensive — fast! The national average cost for even a minor kitchen remodel is $28,279.
- Refinance your home. If your home is subject to prepayment penalties, you may be charged a 1% or 2% fee if you refinance your home within the first two or three years of your loan’s term. This is becoming less common, but review your contract just in case.
Moving In With Aalto
The homebuying process is daunting by design. There’s so much to keep track of that it’s easy to forget the little things, like remembering to bring your driver’s license on closing day and deciding on a move-in date with the seller.
That’s why we’re here to help.
Aalto is a modern, self-service real estate platform that’s shifting the balance of power in residential real estate away from industry insiders and toward people like you. We’re here to help you with all your legal documents and negotiations and guide you through every step of your real estate transaction.
Are you ready to take control of your homebuying process? Get started today!