Most of the time when we buy something, we do not get to take possession of it until we have paid for it. Unless there is some kind of rent-to-own agreement in place, a seller will normally hold onto an item or a house until they have received payment. However, there are exceptions to every rule. In rare cases in real estate, a seller may end up allowing a buyer to move in before closing.
As a real estate professional, you may have experienced or heard of a colleague experiencing some kind of glitch where things do not go as planned and closing is pushed back or the transaction is cancelled altogether. With that in mind, it is in your best interest to advise a seller not to allow a buyer to live in or otherwise access the house before closing.
What sometimes happens is a buyer has what seems like a perfectly reasonable request or they ask for what seems like a small favor. For example they may ask if furniture they purchased be put in an empty house prior to closing. Well, we all know how expensive it is to buy a home, and storage is not free, but what happens if deliverymen damage the property? Or the buyer may ask to move in before closing because they have nowhere to live. If need be, help them find a hotel, but do not let them stay in the property because if something unexpected happens, the seller still owns it. While it is nice to be nice, it just makes sense that a buyer can only use the house as they wish, once the paperwork is completed and they own it.
There are any number of possible scenarios in which letting a buyer move in before the deal is sealed can backfire. There are also any number of insurance issues that can crop up and as was mentioned, the seller owns the house until the buyer signs all of the paperwork, so anything that happens until then is the responsibility of the seller.