In many cases, new homeowners will take possession of a home on the same day that they close. They will meet with the sellers and the title company for closing, perhaps along with their legal representation. All of the documentation will be signed, certain fees will be paid – known as closing costs – and the keys will change hands. The new buyers immediately own their home, and they could drive directly there and go inside legally.
However, it is important to note that this is not always how it is done. The possession date does not have to be the same as the closing date.
The real estate contract should explicitly state on which day closing will occur and on which day possession or ownership will be transferred. Both sides must know if these are the same day or if they are substantially different.
Why would they not be the same day?
There are many potential reasons why the same day may not be chosen. For instance, some sellers put their homes on the market to see how much they can earn, but they have not yet purchased another home. They may specify a much later possession date, giving them time to buy a second home and move before the new owners move in.
But this could create significant problems if there is a miscommunication about the date. Say that the buyers are living in an apartment, but they have moved out in anticipation of moving into their new home. If they close on the first of the month, but then they suddenly find out that they are not actually going to gain possession of that home until the end of the month, they could find themselves without anywhere to live, as new tenants have moved into their old apartment.
This is one of the reasons why it is so important to carefully go over all of the documentation during every stage in a home transfer. It can help to work with an experienced law firm at this time.