Once a home seller and buyer agree to a closing date, everyone involved can breathe easier. There’s finally an end in sight that will allow them to plan for the future. It’s discouraging for a seller when their real estate agent calls with news that the buyer wants to change or postpone the closing date.
We often hear from sellers that buyers request an inspection of the home’s foundation; this is only sometimes a good thing. Let’s examine both sides and offer advice on reacting to this request.
How is the closing date established?
The closing date is when the buyer and seller meet to finalize any paperwork needed for a home sale. Closing can take a month or two. First, the seller accepts an offer, and then it takes time to arrange appraisals and home inspections—not to mention finding a mortgage lender willing (and able) to finance the purchase. The buyer and seller will negotiate a closing date that is ideal for them both. Even with the best intentions, it’s not always possible to close on that date—and both parties may need to be flexible about when they hand over ownership of their newly purchased home.
Most purchase contracts will state that the sale of a property will close on or before a particular date—unless both parties agree to an extension. Contracts without this provision generally don’t allow for changes in closing dates, although there may be exceptions. If either party wants to change the closing date but cannot be done legally under the purchase contract terms, they can ask their real estate agent for advice on how best to proceed.
Why do some people want to push back the closing date?
It’s common to shift a closing date by a few days if necessary, as no one can predict what will happen in the weeks leading up to closing day. If the buyer discovers a major issue with the home during an inspection, they may negotiate with the seller to repair it or lower the asking price. These negotiations can cause delays in closing on your new house.
A title search can delay a sale if it uncovers liens or unpaid debts that the homeowner must pay before selling. The seller must pay the liens or fight them in court to be able to sell his house. If he does this, the closing can be completed in weeks or months.
The appraisal process can cause delays; it’s possible that the appraiser’s valuation won’t match the buyer’s offer. It can take several weeks to schedule inspections and appraisals in a busy housing market.
In addition: Life sometimes gets in the way. Family or cash flow issues may delay closing; other concerns—such as family moves that require carrying furniture down multiple flights of stairs on moving day—can cause delays for everyone and make it impractical for both parties to close at once.
Some buyers or sellers may want to move up the closing date, which can be inconvenient. But it gives them peace of mind that their sale will close—and a seller may need this reassurance if he has already found another home and needs his old one sold quickly so as not to incur two sets of moving expenses.
How do you change your closing date?
Buyers and sellers can ask for new closing dates. So if either party wants to move the date, how do they make that request?
You should contact all parties involved in the sale—including your real estate agent or attorney. They can help you coordinate a change to the closing date and manage any logistical issues caused by such a shift.
It’s better to get the conversation about changing a closing date sooner rather than later so everyone knows what is happening.
If you change the closing date, everyone involved needs to be notified of this new deadline.
How can you keep your closing date from slipping?
A buyer can keep asking for extensions if the contract allows unlimited closing date changes. If the seller needs to close by a certain date—to take possession of their business property and so on—they should add what’s called “time is of the essence” to protect themselves.
A time-of-the-essence clause sets a deadline by which the buyer must be ready to close on the property. If this date is missed and specified conditions are satisfied, the seller can walk away from a sale.
Setting a realistic timeline will help both parties stay on track and avoid delays. Instruct your real estate agent to stay in communication with the buyer’s agent throughout the process so you can make adjustments as necessary—and potentially save thousands of dollars by avoiding lawsuits or other disputes over unforeseen problems.
If a buyer requests an appraisal more than five weeks in advance, it’s best to know immediately so both parties can get on the same page about when the closing will be possible.
If one side needs more time after an appraisal or inspection, be swift in your response so that you can close quickly.