Every real estate transaction has a closing date. When you draft an offer on a home, you include a proposed closing date, which is typically 30 to 45 days away if you are financing the purchase. But what happens if you miss the closing date? What if there are unanticipated delays? What if the home inspection report turned up items that need repair? What if the bank is slow appointing an appraiser or the appraiser takes four weeks to complete the appraisal? What if your loan underwriter finds liens or past financial matters that need to be cleared up? There are many reasons a transaction might miss your closing date, but what happens if you miss the closing date?
Closing Date a Proposed Date
Contractually a closing date is a “proposed closing date,” and courts have ruled that if the closing must be extended a matter of days, and in some cases a few weeks, the buyer is still entitled to close and the seller cannot terminate the transaction. I’ve litigated this issue and have heard judges explain their reasoning. If the delay is not caused by the buyer, and it is due to an unanticipated third party over whom the buyer has no control (like an appraiser or underwriter), the parties still have a binding contract and the sellers are obligated to close within a reasonable period of time. That time period has never been defined except in each individual case.
Closing Date Never Absolute
The rule is not black and white, and I would not recommend getting into a dispute with a seller on the closing date. That might not end well. The best practice is to keep all partiers fully informed of all the inspections and due diligence, as well as any financing issues that could cause a delay.
Closing Date for Two Transactions
One of the biggest challenges for buyers and sellers when the closing date is a moving target is their own moving plans, renting a truck, packing up and scheduling all that. Until a transaction actually closes and checks are disbursed, it just isn’t 100% guaranteed to happen. Things happen, right? Sometimes beyond our control, too. Until you have a firm closing date and it happens, you will find yourself a little stressed about when you should rent the moving truck. Unfortunately, this is a challenge that every buyer and seller has, and if you’re a buyer in Sequim, you may also be selling in another state. That’s a double whammy when it comes to coordinating and planning based on two transactions, each with a different closing date.
Last Updated on September 20, 2019 by Chuck Marunde
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