For 21 years I have been practicing real estate in the Reading, PA and Berks County area. Before this past weekend I had only moved once during my career and that was 19 years ago. At that time I was moving from a one bedroom apartment in Flying Hills to a four bedroom home in Spring Township. The move went smoothly, no kids, plenty of willing friends and just enough stuff to fill a medium sized truck. So what’s all the fuss I constantly hear from clients about their moving experiences? It’s easy right. After all, I have to market the home, find a ready willing and able buyer, perform countless tasks to keep the deal together and make it to settlement. All the buyer and seller have to do is follow my lead and everything will take care of itself. I understand there is that moving part but what the heck as long as you are out by settlement everything will go well.
For all the customers I have represented over the years who had concerns over moving I would like to say one simple phrase. I’m Sorry!
I’m sorry for looking at you with that puzzled stare when you would ask me how you would move out of your home and move into another one in the same day. I’m sorry for telling you that you should be out of your home so the buyer could do a pre settlement inspection of the home with no furniture in it. After all, the movers might mark up the walls or scratch the floors. Simply put, I’m sorry for not putting more consideration into the logistical side of the home sale transaction.
This past weekend was a real eye opener. I moved from that four bedroom home into a larger home. This move took a fleet of trucks, including the bucket truck, full of 19 years of accumulated stuff. Also in tow were two siblings and a new granddaughter that did not exist in the previous move. The wife and friends were still there all be it a little older and wiser.
That said, I still had it easier than most. The owner allowed me to move in to their home, empty the home I lived in and sell that one afterwards. Sellers are often coerced to take the deal they get and be out of the home by settlement day. There is, in my opinion, a better way!
Pennsylvania is in the majority of states in the US that allows real estate settlements to take place in escrow. Unfortunately it is a rarely used privilege. In my humble opinion, settlement in escrow is not used in our area because there is little understanding as to what it is and how to use it to the benefit of both the home buyer and seller.
Something of note on the subject is that in August of this year the Dodd-Frank Law will be in full gear. Part of the law mandates that ALL funds for settlement will have to be accounted for (escrowed) three days prior to settlement. Hmmm…Maybe the government is on to something here.
When settlement on a real estate residence is held in escrow there is a settlement, or signing date. Later there is a moving date. At the signing all funds, including the mortgage funds, are held by an escrow agent who has a fiduciary responsibility to properly account for the escrow funds and ensure that the usage of funds is explicitly for the purpose intended. A “settlement” or “closing” agent or officer, is an impartial third party who plays the important role of overseeing the final details of a real estate transaction. The funds are only released when all terms and conditions have been met by both parties. This helps avoid the risk of a home seller moving all their items out of the home, going to settlement and finding out that settlement cannot happen for one reason or another.
Another option is for the buyer and seller to formally settle on the property and allow the seller to remain in the home. There is a standard Pennsylvania Association of Realtors® form that is known as the Post-Settlement Possession Addendum to the Agreement of Sale. There can be more risks in this scenario than settlement in escrow.
There is no such thing as a flawless settlement anymore. The bureaucracy is astounding. In today’s home lending environment it is prudent for both home buyers and sellers to use caution. Even with the best of intentions by all parties things still tend to happen.
I am truly convinced that when it comes to understanding the rigors of real estate no amount of knowledge can trump pure experience. My moving experience has made me a better real estate agent today than I was just a week ago.
“Knowledge is Power”