Buyers Are Taking ‘Try Before You Buy’ Literally—but Agents Warn Home Sleepovers Are a Nightmare for Sellers

Sellers have always opened their doors to prospective buyers, but the latest trend may be taking landing a sale a bit too far.

It turns out, there is a growing trend of buyers asking to stay overnight in a home before making an offer, according to the Wall Street Journal.

Real estate agent McKenzie Ryan told the Journal that her clients spent the night in a $600,000 Hudson Valley home on 9.4 acres to test the water pressure, heat, and air conditioning, and experience the nighttime cricket chirping and the morning light.

The sleepover went so well, they ended up buying the house.

Real estate agent Cara Ameer, with Coldwell Banker in Florida and California, tells Realtor.com® that this phenomenon of "try before you buy" could be a trend we start seeing more of, especially given the high acquisition costs of homes in general.

"A house is often the single largest investment that people make, so there's a tremendous amount of anxiety when it comes to buying a home and all the unknowns that go with it," she says. "Spending the night in a property beforehand may calm some of those fears."

However, sellers should be cautious, as agents warn that there are more than a few downsides to this arrangement.

When a 'sleepover' becomes a liability nightmare

"Letting a potential buyer spend the night can turn your dream sale into a legal nightmare."

The caution from attorney Chad D. Cummings, of Cummings & Cummings Law in Florida and Texas, is because opening up your home to literal strangers is risky, given the safety and liability risks involved.

"A sleepover of this sort is generally a bad idea unless an attorney experienced in this niche is retained at the outset, and even then, there are significant and sometimes unpredictable risks for the owners," says Cummings.

What kind of risks?

"Let's say the house burns down during the stay," real estate agent Stacy Miller, of Re/Max Fine Properties in Arizona, hypothesizes. "Then what happens?"

The reality is, if the would-be buyer damages the property or becomes injured, you may be stuck with the fallout and no easy way to unwind the situation, according to Cummings.

"Your homeowners insurance probably will not cover any of this," he warns. "Standard homeowner policies exclude losses tied to commercial or short-term guest use. If a buyer slips, steals, or causes a fire while test-driving your home, you could be left paying out of pocket. You may think you are being generous. Your insurer will call it a business-use exclusion. Now you are holding the bag on a six-figure liability with no coverage."

Another concern: squatters

There's also the scenario that if you open your home up to a stranger, there's always a chance they'll stay put.

"We’ve all heard the horror stories—someone 'tests out' the house, then suddenly knows the legal loopholes and refuses to leave," real estate agent and investor Ron Myers of Florida says. "Now you’re facing a squatter situation, court filings, and thousands in legal fees. No, thanks."

Once someone stays overnight, you risk accidentally creating a short-term tenancy.

"If they refuse to leave, eviction becomes murky and can take months," says Cummings. "Control over your own property weakens, all whilst the 'renters' benefit and potentially leave the owners with a trashed, unmarketable property. I have already seen this happen in the Miami market more than once."

Don't forget identity theft

Jameson Tyler Drew, president of Anubis Properties in Los Angeles, calls the sleepover trend "quite possibly one of the most idiotic and dangerous things an agent could possibly suggest to a client."

Putting all other concerns aside, he insists that his biggest worry would be identity theft.

"Let's say the potential buyers take the night to hack into your client's internet routers and install spyware," he says. "Now they have access to your client's entire internet banking data and their passwords. They can then empty bank accounts, open up lines of credit, you name it."

How to protect yourself

Cummings says you should never allow a buyer to stay overnight without engaging legal counsel to draft a bulletproof short-term rental agreement.

"You need strict limits on access, mandatory proof of insurance, a full indemnity clause, and a statement confirming no lease or tenancy," he says. "A fill-in-the-blank form is not enough."

Cummings says background checks are also an absolute must.

"While doing background checks for our clients, my firm has encountered prospective buyers who not only fudged their backgrounds and misrepresented their purchasing power, but were actually committing identity theft altogether," says Cummings. "In one case, we learned that the potential buyer was actually a fugitive from federal justice for running a Ponzi scheme."

Meeting in the middle

If you are worried about letting a would-be buyer stay the night, there just might be a happy medium.

Real estate agent Johnny Fernandez of Boynton Beach, FL, says he's had clients visit properties multiple times at different times of day to really understand the home and the neighborhood.

Fred Loguidice, the founder of Sell My House Fast Salt Lake City, recently coordinated what he calls a "structured extended evening stay" for clients who were contemplating a $4 million home.

"The prospective buyers, a couple from out of state, toured it three times but hesitated," he recalls. "They requested to return from 7 to 10 p.m. in order to properly soak up the evening ambiance."

During the chaperoned visit, they sat on the back deck to listen for traffic and neighborhood sounds, monitored the HVAC noise, and checked the shower's water pressure.

"They submitted a full-price offer later that night," says Loguidice. "The visit had alleviated all their concerns."