How Can We Delay Closing?
Question: We\’ve sold our home and are soon going to closing. However, because we have been unable to find a suitable replacement property we want to delay settlement while the buyers want to close on schedule. How can we delay closing?
Answer: Imagine if closing is delayed by a month. Imagine also that the purchasers have sold their home or given notice to end a lease. Where do they live if closing is postponed?
This is a tough issue because both buyer and seller agreed that the home would be sold under given terms. One of those terms was to establish a specific settlement date.
In this situation there are several steps that can be taken:
___ Ask the other party for a delay. However, if closing is delayed buyers may lose a financing commitment at a particular rate. Who pays if closing is delayed and now the interest rate is higher?
___ See if there is a clause in the agreement which would permit delay or cancellation of the contract. This is a matter for attorneys to review.
___ Sell the home — and rent it back. This may be possible for a few days if okay with the buyers, however residential financing agreements usually show that the borrower “intends– to actually live on the property within 30 days. It’s possible that a lender could call the loan if the new owners have not moved in within the required timeframe. Most lenders would probably be reasonable on this point if there was a minor delay, but not all lenders are reasonable — think of predatory lenders.
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Syndicated originally by Content That Works and posted with permission.
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