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?

πŸ—“οΈ 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.

If you both agree to this in writing and all contingencies are met, the transaction can be closed before the appointed closing date.

πŸ€·β€β™€οΈ 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.

It’s not unusual for a closing day to be missed. In fact, it’s more common than most people think, and in most cases, the cause of the delay in on the buyer’s end of things.
Woman looking unhappy on phone

πŸ”¨ 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.

Issues at the last minute with loan details can cause delays. If a home inspection uncovers a major issue that needs attention, the buyer may miss the set closing date.

πŸ“… 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.

SUGGESTED: Questions to Ask When Selling a House?

Talk with your real estate agent to discuss which options are available to you when the closing date is missed. Even when you feel angry or frustrated, try to remain objective and move forward.
Real estate closing day delayed

πŸ“± Contact Brock Realty Inc.

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Your real estate agent is the best source of information about the local community and real estate topics. Give Brock Realty a call today at 941-313-1234 to learn more about local areas, discuss selling a house, or tour available homes for sale.

πŸ“‘ 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.

Keep in mind that there are so many things that can cause a delay in meeting the closing deadline that it’s not typically practical to place this clause in the contract.

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.

SUGGESTED: Should you get an appraisal?

Contract writing real estate

πŸ“ 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.

Reasonable is not a concrete term here. What one person considers reasonable may be far from reasonable to another. In most cases, the buyer is given 30 days to close on the property.

πŸ€” 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.

Ending a sale deal with a buyer can cause a delay with the house you are purchasing. This delay can place you in a situation that mirrors the one you are dealing with as a seller and cause your home-buying deal to collapse.

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.

πŸ’΅ 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.

In addition, the contract could impose financial penalties on the buyer who is in default. Read carefully and know what you’re entitled to if the closing date is delayed. Extending the contract gives you greater scope for negotiating a β€œper diem” payment.

πŸ’° 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.

The contract could allow the seller to ask for an amount equal to the interest earned on the sale proceeds. Your real estate agent can help you determine which option is best for your transaction. Your aim is to reach the closing table as soon as possible without causing the buyer to walk away from the table or causing a loss from your own pocket.
Hand holding house and dollar sign

✨ 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.

Home Buyer Missed the Closing Date. Now What?
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Home Buyer Missed the Closing Date. Now What?
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.
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Brock Realty Inc
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