When you go through the process of buying a house, you might have to change the real estate closing date. It's actually fairly common for the buyer or the seller to request this kind of adjustment, so don't be alarmed if it happens to you. Let's take a closer look at the closing process and why someone would want to reschedule a closing date in the first place.
What is closing on a home?
Closing represents the scheduled day, after a seller accepts a buyer's offer, when the parties meet and sign the final paperwork. The whole process from accepted offer to closing typically takes an average of 50 days. During that time, attorneys draw up contracts, and dozens of other parties—from title agents to mortgage lenders—finish completing the transfer of a property.
The appraisal process can also slow things down, especially if the home doesn't appraise as high as the buyer's offer, Freda says. This could force a lender to deny a mortgage, leaving a buyer scrambling for alternative financing or pushing the seller to renegotiate the selling price. Either way, this could mean changing the real estate closing date because the buyer can't close without money to make the deal.
Every property purchase also has to be reviewed by a title company, and scheduling a time for that can delay the closing date. The company's staff does an investigation into the property's history to ensure the seller truly has the right to sell the home. If a title agent finds liens, or unpaid debts on the property, the liens will have to be paid off or there can be no sale. It's up to the seller to pay the liens (or fight them in court), which can delay closing by weeks, if not months.
Personal issues can also delay a closing, Hardy notes. Buyers or sellers might ask for more time in the event of an illness, family emergency, job change, or problems with the moving company.
Closing dates aren't always pushed back. Sometimes buyers might want to speed things up to get into their new home faster (and can you blame them?).
How to change the real estate closing date on a house
Closing dates are outlined in the purchase contract. Most closing dates are open to negotiation, but some are set in stone, so check your contract to see if you can even make a change.
"A typical purchase contract says 'Closing on or before X date unless a change is mutually agreed upon by both parties,'" says Hardy. That means a final closing date is set, but there's room in the contract for either the buyer or seller to ask the other party for some wiggle room.
If you need to bump your closing date, check with the other parties involved in the sale to make sure the new date works. The real estate agent or attorney of the party who needs the date change will make phone calls on behalf of their client to get the date moved.
"Agents, attorneys, bank or mortgage broker, title company, surveyor—everyone needs to be on board," says Hardy. "And the sooner the better. When someone is selling, there are garage sales to be held, moving vans to arrange, and, in many cases, another closing dependent on this one. So the lines of communication need to remain open."
At the very least, all of the following people need to be notified and on board with the new closing date:
- Title company
- Real estate attorneys
Make sure to get everyone's approval of the date change in writing.
Repercussions with changing a closing date
"If either party cannot close by the agreed-upon date, the other party could have the right to cancel the contract," Hardy warns.
Your bank or mortgage company might also penalize you for changing your real estate closing date. Lenders like to get their buyers into "rate locks," or a guarantee that they'll give you a specific interest rate and mortgage points as long as you close by a specific date. Some banks grant rate lock extensions, but you might have to pay a penalty.
Additionally, the amount you pay in property taxes can be affected by a closing date change, says Carmen Zuniga, a Realtor with Galleria International Realty in Fort Lauderdale, FL. Because your portion of the tax bill is prorated based on the date of purchase, an earlier closing could mean paying slightly more in taxes. Then again, a later closing could mean paying slightly less of the real estate taxes.
There are also fees for rescheduling movers, as well as the cost of temporary housing if a buyer's first home has already sold or rental lease has run out before the closing date.
article provided by: Realtor.com