Most of the time (99.99%) the settlement will be extended and the loan will still be processed. There are many reasons for delays of closing on both sides - the loan officer is only one possibility - usually both parties still want to proceed and close the transaction.

For bank-owned properties, many of the banks have a per day cost to the buyer of anywhere between $50 and $150 for every day that the closing is delayed due to the buyer (the loan is considered on the buyer's side) but they will still proceed with the deal and close at a later date.

In the worst case scenario, if you are in default, the seller can have rights to cancel the contract and keep your earnest money deposit. Or, if you are in default, the seller can choose not to accept the earnest money deposit and can choose to sue for more. Very few people have the type of personality to choose this option. But that is the worst case scenario.

Your agent, having kept up with the process, should ask for an extension of the purchase agreement prior to the the date set on the agreement to remove contingencies. At this time the seller can extend it or not. Typically if the loan is progressing and will close in a reasonable amount of time, the seller extends. Most sellers will want to know the cause for not meeting the deadline and make their decision based on that information.

I'm sure your agent will ask you and the sellers to sign an addendum that adjusts the settlement date so that you won't be in default.

Eve Thompson
703-582-6475
Long and Foster