Question About Moving In Before Close of Escrow

BSD · Joined: 07 Aug 2007 Posts: 2

Hello,

I have a question. I am buying a bank-owned home in California. I made all my arrangements to move out of the house I was renting and into the house I was buying based on the scheduled completion date of escrow. Due to some minor complications with the lender, the escrow period was delayed by a few days. Because of my plans and schedule, I needed to move into the home I was buying before escrow closed. My agent said it shouldn't be a problem since the house was vacant, however he did not specifically ask the bank that owns the property for permission. Now that I've moved I'm really worried that I could get in trouble if the bank found out, or worse, they could say I'm breaching contract and cancel the deal.

I'm only a couple days away from closing escrow and I'm scared I could lose my dream home because of a stupid decision. Should I be worried?

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: My agent said it shouldn't be a problem since the house was vacant, however he did not specifically ask the bank that owns the property for permission. Now that I've moved I'm really worried that I could get in trouble if the bank found out, or worse, they could say I'm breaching contract and cancel the deal

Your agent said WHAT????? :shock: :shock: :shock:

You've got bigger problems than them cancelling the deal. You're trespassing on their property, and on top of that if you have utilities on and they're not in your name you could be looking at theft as well.

Quote: I'm only a couple days away from closing escrow and I'm scared I could lose my dream home because of a stupid decision. Should I be worried?

Yes, you should be. In all honesty, I'd rent a storage unit, get your stuff out, and stay with a buddy for a few days. It's a LOT less costly than simply losing your dream home, as I'm sure you don't look all that great in an orange jump suit.

Personally, I'd fire your realtor. You were making a decision on what they advised, and their advice is what was stupid.

Alternatively, and I'm not sure if you'd want to do this or not, but you could call up the seller and let them know that your agent said it'd be ok if you moved in early, and after checking into it you're not so sure, is it ok with them and if not, you'll be happy to move your stuff out and pay them for any costs incurred due to this breach.

Do this immediately, there is nothing more important than getting this resolved immediately.

Oh, one other thing. After firing your realtor (or part of the process) I'd contact the broker of their company and let them know what they advised you to do. Best case, they're a nooby realtor and simply biffed. Worst case, they're the exact kind of pond scum that we don't need in this business, and their broker needs to know what's going on. If they are the broker, then go to the local association.

jrhartman · Joined: 01 Apr 2007 Posts: 107 Location: Michigan

Things in in Cali are like nowhere else in the country and based on your location in CA and the way that I read your post, I am assuming that you have already signed all the loan documents/closing papers already and that you are waiting for the funding date still, is that correct?

I would refer to the Purchase agreement to see as to when "possession" is supossed to take place. Were the keys presented to you at the closing?

BSD · Joined: 07 Aug 2007 Posts: 2

jrhartman wrote: Things in in Cali are like nowhere else in the country and based on your location in CA and the way that I read your post, I am assuming that you have already signed all the loan documents/closing papers already and that you are waiting for the funding date still, is that correct?

Yes, that is correct.

I've already put in a request to the utilities company to have them changed over to myself.

I'm no real estate expert, but you are right, California real estate does operate much differently than around the rest of the U.S. Not better, just different. Is there a real estate forum specifically for California that I could consult?

Thanks for your help.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

I'll contact someone in California shortly and get back to you.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Just got off the phone with a friend of mine who lives in and closes loans in California.

Basically, read what I said earlier. If you haven't closed escrow, you don't own the property. You have no rights to the property until the loan funds. The only way you would be ok is if you had a lease, which it sounds like you don't (seeing as how the seller doesn't know you're occupying their property.)

If you're still concerned and want further clarification, contact a real estate attorney. Probably not a bad idea to do that anyway considering the circumstances.

ken(TX) · Joined: 23 Sep 2005 Posts: 184 Location: Dallas, TX

As an expatriated Californian....

California is different but it isn't that different. Obviously, Haplo and others here don't have a copy of your contract on-hand to review. Perhaps there was a provisional clause allowing you to lease the home prior to close of escrow. However, based on 12 years in the mortgage business I really doubt it, ESPECIALLY when the seller is a commercial entity.

I agree with Haplo that it is AMAZING your agent would tell you to move in and take posession prior to close of escrow. I'm not even certain how you got the keys to move in. So based on this, perhaps there is more to the story than we know. Either way, get your agent on the phone now and ask that person to explain to you how you can live there prior to closing escrow and have the agent point out to you the written part of the contract authorizing this....

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Only thing I could think of was that the agent had to let him in...