What if you don't close by the close date on the sales contract? Could the buyer get out of the deal?

Asked by Kathleen, Brooksville, FL Thu Dec 2, 2010

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Kimberlyterr…, Home Buyer, Johnson City, NY
Thu Oct 13, 2016
We have a closing date of oct 28... The builder now will not be done on time, it's now moved to Nov 14. We made arrangements for movers, appliances to be installed, must move out of rented house. This is a brand new home being built. Are the builders now responsible for fees, like movers, if the appliance store charges us to hold our purchase. And to extended on our rental agreement. They said it's the drywall but the closing agent said they don't have enough workers to finish on time. Are we I titled to fees?
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Jeff Star, Agent, glendale, AZ
Thu Dec 2, 2010
Normally when you don't close by the close date it's probably a lender issue, Lenders like to wait to the last minute to get docs out. This is not unsual at all it happened to 3 of my deals this week. I guess the question is can the buyer get out of the deal if they don't close on time. If you are the seller and the buyer doesn't close on time they are in breach of contract and you can usually cancel, but I don't know why anyone would do that. If your the buyer and you don't close on time you need to get all over the lender and see whats going on because the seller could cancel and you could possibly lose your earnest money.
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Jeanne Feeni…, Agent, Basking Ridge, NJ
Thu Dec 2, 2010
Hi there, good to have you antenna raised - anytime there is a delay it can signal trouble. But given what you've described, it sounds like the buyer trying to seize the opportunity to improve his rate - if it does not cause hardship for the seller, then I'd say work with it. While closing dates should be established with the best intentions to meet them, they are often better thought of as a target. With the number of parties involved, delays and scheduling issues can occur.

Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
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Can the buyer tell you to leave the property when you still have some of your belongings and stuff that a company that was hired to handle that stuff didn't and the owner being there doesn't keep the buyer from his new home
Flag Thu Nov 9, 2017
Joseph Washi…, Agent, Berwyn, IL
Thu Dec 2, 2010
Hey Kathleen,

You know, you just said something that is highly unusual in any real estate market but is probably true today. Predicting rates to come down in 24 or 48 hours is highly speculative- nobody really knows when the market will adjust mortgage rates. In fact, they may yet go up tomorrow. The European debt situation has settled down so mortgage interest rates probably will feel less pressure and come down. With regard to your friend's situation, a contract can present risk to buyers who choose to "wait" and delay a closing. Still, this market is so volatile that sometimes everyone needs to be more cooperative and less rigid to close these deals. It sounds like your friend understands the circumstances; your friend may just prefer to cooperate by waiting a little bit more. Please, tell your friend to consult with their attorney and Realtor before making any decisions. Good luck, Kathleen!
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Kathleen, , Brooksville, FL
Thu Dec 2, 2010
The reason for the delay is that the rates are changing Tues. and the buyer wants to get a lower rate. This info is not for me but for a friend . I would not let myself get into this situation. This is her first real estate transaction and does not seem to be getting much help from her realtor. I just thought that perhaps he was trying to get out of the deal due to financing problems.
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David Akram , Agent, Granada Hills, CA
Thu Dec 2, 2010
Kathleen, laws varies by state and also are based on the contingencies in the sales contract. Please consult your local realtor to get the details on the particular transaction. If this is your transaction then you can readily view your sales contract to see if there are any contingencies relating to delays in the closing that offer an out for the buyer.

Hope this helps.

Thanks
David
Web Reference:  http://www.DavidNewHome.com
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Joseph Washi…, Agent, Berwyn, IL
Thu Dec 2, 2010
Hi Kathleen,

Remember, the contract is the law. That's #1. The terms, conditions, deadlines and penalties for default by either party are spelled out in the contract. You must review your sales contract. If the buyer is in default, then the answer is probably "No." If the seller is responsible then the buyer may be able to exit the deal.

The other important concept is performance. If the buyer did NOT perform as the buyer should- working hard to get financing or whatever- then the buyer may find it difficult to get out of the deal. If the seller did not perform- and there are many ways the seller can be guilty of non-performance- then that may help the buyer again if the buyer seeks to cancel.

I hope this helps you gain some better understanding on the issue of a buyer's obligations or options if the property is not closed by the close date on the sales contract.
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John Sacktig, Agent, New Jersey, NJ
Thu Dec 2, 2010
Hi Kathleen,

My opinion from experience is that, no they can not get out of the contract. But, there could be some exceptions. Why is it delayed, Mortgage problem? There may be a mortgage contingency in the contract that states if they can't get a mortgage, then they can be allowed to exit, but there can be deposit issues for the buyer, as in the buyer can possibly lose their deposit.

Time of the essence can be served to the buyer, bascially the sellers attonrey telling them if that they do NOT close.. there wil be ramifiations.

There are a whole host of things that can happen. Speak with a real estate attorney or your title company to see what is really going on.

Let us know some more details.
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Guy Gimenez, Agent, Austin, TX
Thu Dec 2, 2010
Kathleen, please check with a local real estate attorney and thoroughly review your contract terms.

In Texas, and in all contract case law I've read over the years, unless there is specific legal language written into the contract, all time frames are considered to be "approximate." I almost always include a "time is of the essence" provision to eliminate the "approximate' time frame issues, but you should check with a local real estate attorney who is familiar with contract law in your state.
Web Reference:  http://www.phgbrokers.com
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Anna M Brocco, Agent, Williston Park, NY
Thu Dec 2, 2010
What is your agent advising--and without many details--much will depend on your contract, review the document as the answer can be found it--or consider consulting with an attorney who specializes in real estate and have all related paperwork reviewed--see exactly what options you may have and go from there.
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Phil Rotondo, Agent, Melbourne, FL
Thu Dec 2, 2010
Kathleen;
Unless otherwise stipulated, time is of the essence in the contract.
So the contract expires if it goes past the closing date as stated in the contract and the closing date has not been extended by mutual agreement. And in such a case neither party may be obligated to perform.
I'm not a lawyer; so you may want to go over all the details of the transaction with your agent or a Real Estate attorney.
Web Reference:  http://www.321property.com
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