Once in a while, you encounter a situation where a buyer has to move in to the property they intend on purchasing before settlement has occurred.  Usually, this happens because their lease is over before the settlement date and settlement itself has been delayed for one reason or other.  Whatever the case may be, having a pre-settlement occupancy agreement becomes the only option for the purchaser so as to avoid becoming homeless (literally).

The thing to be aware of with these agreements is that it not only accommodates the early move-in, but it also gives the seller a lot of leverage in that should settlement not occur on the specified date, then all monies are forfeited and the purchaser is literally kicked out of the property within a matter of days.  So it’s a case of Buyer Beware.  There are explicit clauses within this agreement which are in contrast to most statutory laws regarding tenant rights.  Also, a buyer accepts the property in the condition it was in at time of signing the agreement.  This means that if AFTER you’ve signed the agreement the HVAC stops working, the seller is no longer responsible for repairs or replacement.  Additionally, the buyer does not have the right to alter the property without seller’s prior consent.

There are also indemnification clauses that protect the seller in the event the property is destroyed or damaged for any reason whatsoever.  That is why it is crucial to purchase insurance that has an effective policy as of the date of the pre-settlement occupancy agreement.

As a buyer, you have to go in it with the understanding that, unless modified, pre-settlement occupancy agreements are written to protect, first and foremost, the seller’s interest.  This is not a buyer-friendly agreement and there are caveats that need to be taken into consideration prior to signing.

This gorgeous Victorian beauty is located in the super-hot Ledroit Park location and has nearly 3,000 sqft of living space.  It boasts an open floor plan with bamboo floors, stunning gourmet kitchen, designer baths, tall ceilings and generous room proportions. The full basement apartment has 1br/1ba and is a money-maker.  Click here for the virtual tour:  http://www.homevisit.com/mlsTour?ver=1&id=39530

**SOLD**

$582,000

WOW! What a DEAL! Spacious 2BR/1BA, bright, airy, open space invites you as you enter. This corner-unit has everything you’d want: Updated interior amenities, style, and comfort, all located within the uber-popular U st. and Columbia Heights neighborhoods. PARKING included. Check out the enviable views from your balcony! Building offers extra storage and a fitness room. DON’T MISS!  Click here for the full virtual tour: http://www.homevisit.com/mlsTour?ver=1&id=39429

Price:  $399,900

Condo Fee:  $433 (includes parking fee)

I just settled on a house for my clients and it was a short sale.  I’m not sure how we pulled through, given that it took three months to get to the table!  Their patience certainly paid off, but they were in good shape because they didn’t have to vacate a rental at a certain date.  In any case, short sales suck because they put everybody on edge.  How?  Start by having to negotiate with a bank that’s not at all considerate to the timelines outlined in the contract.  Please, if you’re purchasing a short sale, go in it with the expectation that you’ll be given the run around for a quarter to nearly half a year (i’ve heard horror stories).  Even then, you’re not guaranteed that you’ll get to settlement.  So all of that waiting around could  end up costing you  al ot of time, a lot of upfront costs out of your pocket (home inspection and appraisal) and a ton of aggrivation. Another reason why this process sucks is that when a lender locks in a purchaser, there are expirations to the interest rate lock-in periods.  This means that while the short-sale bank is out there, no where to be found, with no updates being given, and with the expiration of lock-in rate fast approaching, you could be at risk of having to shell out even more money to the lender to keep that sweet interest rate for god knows how long.  Be sure to ask your lender to lock you in for as long as humanly possible because you’re going to be waiting a while for closing to take place.  It’s never a good feeling to have to pay more money for something that’s not in your control.  So beware!

The bright side of it all is that short sales benefit everyone when they go through:  They benefit the neighborhood because it’ll be one less empty, dark, boarded up house on the block, the purchasers usually get awesome deals when the sale goes through because often times you can purchase these at below market values, and you’ve helped a desperate seller to come out from under a nasty loan, moods are elevated, lives are saved, neighborhoods are preserved and everyone’s happy.

My point is no matter how it turns out, short sales are a lot of hard work, they require a ton of patience and are risky in that they may fall through at the last minute.  Go in it with as much expectation for disappointment and hopefully you’ll be pleasantly surprised in the end.  I know my clients were : )

Exquisite art-deco era row house in the prestigous Cleveland Park neighborhood boats wide, open spaces, original details intact, gorgeous new kitchen, generous room sizes with a ton of light, great closet and storage space, finished income-producing apartment downstairs, charm, character and timeless elegance.  Wonderful lot with separate garage, walking distance to shops, restaurants, and best of city living.

4BR/3.5BA

**SOLD**

$935,000