Buyer Didn't Close on Time. Now What?

Melanie 

Ortiz Reyes

Content Specialist

You've put your home on the market, found the perfect buyer, and you're eagerly counting down the days to closing. It's an exciting time, and you begin to think about your future home and the next chapter in your life. But then, you hit a bump in the road: the buyer doesn't close on time. Not the ideal situation, but this is not uncommon in the world of real estate. So, what now?

First, take a deep breath and learn and understand why the buyer missed their closing deadline. These are the most common causes of a delayed closing:

• Financing Delays - Even if a buyer is pre-approved for a mortgage, underwriting can take longer than expected. Lenders may request additional documentation, or the buyer's financial situation might change, affecting the loan approval process.
   
• Home Inspection Surprises - Sometimes, issues arise during the home inspection that require further negotiation. Repairs or concessions can extend the timeline as both parties work through the details.
   
• Title Issues - Title searches can reveal unexpected problems, such as liens or boundary disputes. Resolving these issues takes time and can delay the closing date.
   
• Contingencies - Buyers often include contingencies in their contracts, like the sale of their own home. If their house doesn't sell in time, it can delay the purchase of your property.
   

How Would a Delayed Closing Affect You?

A buyer's closing delay can significantly affect you, the seller, in several ways. Perhaps the most stressful consequence is the financial uncertainty this can cause in your life. Sellers often have plans and commitments that rely on the proceeds from the sale of their property, such as purchasing a new home or covering other expenses. When the closing is delayed, it might force sellers to make last-minute adjustments to their plans.

Adding to the financial strain, closing delays mean the seller continues to incur holding costs on the property. This includes ongoing mortgage payments, property taxes, and maintenance expenses. These costs can add up quickly, eating into the expected profits from the sale. The longer the delay, the more money sellers are shelling out for a property they may have mentally moved on from, which can be incredibly frustrating.

Market conditions can change during a closing delay, exposing sellers to potential losses. Real estate markets can be unpredictable, and if property values decline during the delay, it could impact the final sale price. Sellers may find themselves settling for less than they initially anticipated. Worst case scenario: the closing is significantly delayed or falls through entirely, and the seller needs to restart the selling process. This includes staging the property, holding open houses, and dealing with showings all over again.

Here are Tips for Handling Closing Setbacks:

Communication is Key

First, reach out to your buyer and open up the lines of communication with the help of your listing agent. Remember, life can be unpredictable, and sometimes, things don't go as planned. Ask them about the reasons behind the delay. Maybe it's a financing hiccup, or they've hit a snag during the inspection. Understanding the 'why' can help you both get on the same page.

Don't forget to explain your perspective too. Let them know why the closing date is important to you - whether it's financial commitments or moving plans.

Be Flexible

A friendly option is to consider granting an extension of the closing date. Sometimes, a little extra time is all the buyer needs to sort things out, giving them a little breathing room. It shows that you're willing to work with them and not out to make things unnecessarily difficult. Keep in mind that you both want to accomplish the same goal: get the deal done.

When you propose an extension, make sure to be clear and specific about the new terms and deadlines in writing. This way, everyone knows what to expect. Remember, it's all about being flexible and accommodating, within reason, of course, because you want to ensure you're protecting your interests. 

Negotiate Compensations

When you bring up the topic of compensation, do it with a collaborative spirit. You're not trying to pin the blame on anyone; you're seeking a way to make the situation more manageable for both parties. Start by proposing compensation that you think is reasonable for the additional costs and inconvenience you incur due to the delay.

Compensation doesn't always have to be in the form of cash. It could involve covering some of your holding costs during the extended period or even having the buyer take care of specific repairs or improvements you agreed upon earlier. It's not about being confrontational; it's about finding a fair solution that works for both parties. Remember, you're both in this together, trying to make the deal work. If things get really sticky and you suspect the buyer is in breach of the contract, it might be time to consult with a real estate attorney. They can guide you on your legal rights and options, but hopefully, it doesn't come to that.

Have a Plan B

While you're waiting, don't stop marketing your property. Accepting backup offers is a smart move. This way, if the current deal falls through, you've got a Plan B lined up and can potentially avoid a longer delay.

Real estate markets can be as unpredictable as the weather. While you're waiting for your current deal to finalize, the market could shift. By keeping your property active and visible, you're poised to take advantage of any sudden increase in interest or favorable market conditions. 

Keep entertaining offers from other potential buyers while your current deal is pending. It's like keeping a few doors open just in case one closes unexpectedly. Plus, it can nudge your current buyer to move faster if they know you're not waiting for them to make a move. Continuing to market your property also shows that you're proactive and committed to the sale, signaling that you mean business and are ready to move forward with someone equally prepared.

Reach out to an attorney when it looks like the deal is falling apart or if you suspect your buyer is in breach of the contract. Signs of this could include your buyer consistently missing deadlines or showing a lack of commitment to resolving issues. An attorney can help you understand whether you have grounds to terminate the contract, retain the buyer's earnest money, or pursue legal remedies.

Involving an attorney doesn't necessarily mean you're going to war with your buyer. It's often a smart move to protect your interests and ensure that you're making informed decisions. Remember, attorneys are skilled in negotiation and can help facilitate a resolution that both parties can agree upon.

When the buyer doesn't close on time, it's not the end of the world, but it's good to be prepared for this possibility. Remember, the key is to stay calm, communicate openly, and explore solutions together. Life happens, and while delays can be frustrating, managing closing delays is possible. Whether it's extending the closing date, negotiating compensations, or even seeking legal advice in more complicated situations, there's always a way forward. So, take a deep breath, stay patient, and keep your eye on the prize: turning that 'For Sale' sign into a 'Sold' sign.

Find an Agent