You didn’t think it would happen, but the home buyer missed the closing date! Now what? Learn more about how to handle a missed real estate closing.
You’re looking forward to processing with your moving plans, but the home buyer missed the closing date. What does that mean for you as the seller of the home? How does that impact the successful completion of the transaction?
- 🗓️ What is a closing date?
- ⏰ Can we close early?
- 🤷♀️ What if the buyer misses closing day?
- 🔨 What causes a buyer to miss closing day?
- 📅 What happens when a buyer is delayed?
- 📱 Contact Brock Realty Inc.
- 📑 What is a time is of the essence clause?
- 📝 What is a fixed closing date?
- 🤔 End the deal or extend the closing date?
- 💵 What is a Per Diem Penalty?
- 💰 How much is a Per Diem Penalty?
- ✨ Conclusion - Home Buyer Missed the Closing Date
🗓️ What is a closing date?
When a purchase agreement is created, the home buyer makes a request for a specific closing date of the home sale. At this point, a closing day is established. The closing date is typically 30-45 days from the date the offer from the buyer is accepted.
⏰ Can we close early?
There may be a time when the buyer wants to close early because they know they won’t make the actual closing date. If this is something that works for your circumstances, you can accept a closer date.
🤷♀️ What if the buyer misses closing day?
Even if you think everything is in place and ready for closing day, a buyer may miss closing on the property. When this happens, all parties involved must be notified in writing of the change in closing dates.
🔨 What causes a buyer to miss closing day?
There are contingencies that must be met before the closing day. Usual contingencies include home inspections and mortgage loan details.
📅 What happens when a buyer is delayed?
A delay in the closing day can be frustrating, but your goal is to keep the sale from falling off the table. If the sale falls through, you’ll have to start over from the beginning. In order to keep things on a steady path, it’s usually best to allow an extension to all parties.
📱 Contact Brock Realty Inc.
📑 What is a time is of the essence clause?
Your contract may have a time of essence clause that creates a definitive date for which the closing must be completed. If this date is delayed for any reason, the seller or the buyer can decide to end the deal and move forward.
When could this happen?
Let’s say that the contract calls for a home inspection. That home inspection comes back with a report of major problems, so the buyer makes a request that you fix the problems. You decide to follow through and do the repairs.
The repairs are completed, but a certificate of occupancy is needed for everything to move forward. Unfortunately, the certificate doesn’t arrive in time for the closing date! The buyer decides to walk away from the sale.
If this happens, there are no repercussions for the buyer even though you did everything within your power to make things right for the buyer. The deal falls through due to that one clause in the contract and you may even face damages if it’s considered that you are in default.
📝 What is a fixed closing date?
Different from the essence closing date, the fixed closing date is determined by the state’s case law and convention. In most cases, a reasonable delay is acceptable, which gives the buyer some breathing room for the seller can call off the deal.
🤔 End the deal or extend the closing date?
You may be tempted to end the agreed-upon deal out of frustration. Doing so is serious and could cost you money from the sale and time that you’ve spent getting the sale closer to closing day. If you end the deal, you’ll need to re-list the home and start over.
Tips for Saving the Deal
- Genuinely listen to the buyer with an open mind.
- Consider being gracious with an extension.
- Remember the end goal and be patient.
You can protect yourself against making several extensions by using a time of essence clause in the new terms. If the buyer misses the closing date again, they will be liable, and you can cancel the deal.
💵 What is a Per Diem Penalty?
There are times when canceling the contract will allow you to keep the buyer’s earnest deposit. This is not always the case because earnest money is tricky. You’ll need to abide closely by what’s in the contract.
💰 How much is a Per Diem Penalty?
The per diem penalty is set in the contract or figured with a formula. It’s a percentage of the seller’s monthly housing expenses and is meant to cover mortgage costs, property taxes, and insurance costs while the closing date is rescheduled.
✨ Conclusion – Home Buyer Missed the Closing Date
You may want to work with a buyer who has a good reason for a delay in the closing day. Your real estate agent can help you understand the terms of the contract, know when extensions are an option, and help you reach a closing day in a timely manner.