Q: Who legally owns the house on the day of closing in Pennsylvania?

A: When you purchase a home in Pennsylvania or in any other state, either the contract of purchase or local custom will dictate who is responsible for the expenses of the home on the day of closing.

When you attend the closing of the home (or, as it is referred to in some states, the settlement), you become the owner of the home at the time you receive the keys and the seller receives his or her money.

Most all homes accrue expenses on a day by day basis. In most cases, there are real estate taxes to be paid. In other cases, there are homeowner association dues that accrue daily with utilities and other expenses.

The customs vary from state to state and even from county to county. In some states, the seller is deemed to be the owner of a home on the day of the closing and that seller has to pay all costs associated with the ownership of that home that day. The opposite is true in other counties.

Some transactions go as far as to state that a buyer pays all costs relating to the ownership of the home if the closing occurs before noon but the seller will pay all those expenses if the closing occurs in the afternoon.

Because this is such a local issue, and it varies by county, it’s impossible to tell you what your financial responsibilities are for the day of closing. But your real estate agent or closing agent should be aware of these local customs and can guide you.

If your question relates to who gets to live in and possess the home on the day of the closing, the best thing is to have the seller out of the home when the buyer is ready to tender his money to the seller.

In some parts of the country, the custom is to allow the seller to remain in the home the day of the closing or even up to 2 weeks after the closing. However, if I were representing a buyer, I wouldn’t want a buyer to close on the purchase of the home unless the seller was willing to pay for his stay in the home after the closing and was willing to put up a substantial amount of money to assure the buyer that the seller will move out on a specific date and has the money available to pay for that post-closing possession of the home.

If the seller is unwilling to pay for the post-closing possession of the home or is unwilling to put up enough security to satisfy the buyer that the seller will move out on time and will deliver the home in the condition required under the contract, then the seller should move out on the day of the closing and before the buyer delivers his money to the seller.

While this view may be different than some of the customs and practices in some parts of the country, it protects the buyer from a seller who decides not to move out of the home. It also protects a buyer from a seller who damages the home after the sale or when the seller is moving out, and it encourages a seller to respect the terms of the contract and deliver the home to the buyer on time and in the condition required under the contract.

Published: Jul 21, 2008