What to Do When Seller Wants to Extend Closing Date?

You’ve found your dream home and can’t wait to move in. The offer is accepted, inspections are done, and you pack boxes. Everything seems to be rolling smoothly until you get a call from your real estate agent with some unwelcome news – the seller wants to push back the closing date.

Now comes the dreaded closing extension request. What do you do when a seller wants to extend the closing date?

As a buyer, few things are more frustrating than having the seller ask for more time after you already have a firm closing date locked into your purchase agreement. But these requests happen, usually due to circumstances beyond the seller’s control. And while inconvenient, extending the closing doesn’t have to derail the entire deal.

Approach the situation strategically and protect your interests for the best outcome. With the right information and professional guidance, you can negotiate an extension that works for both parties. This ensures you get to the finish line without too much additional stress or delay.

Let’s explore some strategies for buyers in the real estate industry to address closing extension requests to keep the transaction on track.

Common Reasons Sellers Might Extend Closing Date

As frustrating as closing delays can be, sellers don’t request extensions just to torment buyers. There are usually legitimate reasons motivating a seller to ask for more time.  

When a seller asks to push back the closing date, it often comes down to one of these common scenarios:

• The house they are buying hasn’t closed. 
  Often, sellers are trying to coordinate the sale of their current home with purchasing their next one. If there are delays or complications with the closing on their new property, it can throw off the entire sequential process. The seller may need to extend the closing date on the home they are selling to align with the timeline of their new purchase.
• Title search issues.
  If there are problems found in the title search, then the seller may request to extend the closing date so they can resolve any title issues.
• The seller didn’t make the required repairs in the contract.
  If the contract specifies that certain home repairs must be done and the work is not completed, whether at the fault of the seller or the contractor they engaged, the sale might need to be postponed. They may ask to extend the closing date to complete the work.
• Difficulty financing the next property.
  If the seller is dependent on the proceeds from the sale of their current home to fund the next purchase, not having financing secured or loan approval for the new property can slam on the brakes. Without financing in place for their next home, the seller may not be able to close on the sale of their current place on schedule.
• They want to renegotiate the price or terms.
  Sometimes, sellers get cold feet about following through on the agreed-upon deal. They may use a closing extension request to reopen price negotiations or change the purchase terms.
• Personal predicaments. 
  Illness, death in the family, job loss – unforeseen personal circumstances can interfere with a seller’s ability to vacate the property in time for closing. These life events often necessitate an extension.
• Cold feet or second thoughts.
  Some sellers get anxious about leaving their home as closing nears. Extending gives them more time to cope with the emotional aspects of selling their house. 

Does a Seller Have to Sell if You Are in Contract?

Yes, in most cases, a seller is legally obligated to sell a property if they have entered into a valid purchase contract with a buyer. This obligation on the seller to complete the sale is enforceable through the legal remedy known as specific performance.

Specific performance allows a party to a contract (in this case, the buyer) to ask the court to order the other party (the seller) to fulfill their contractual obligations.

Specific performance is particularly relevant in real estate transactions because every piece of property is considered unique, and monetary damages may not adequately compensate a buyer if the seller fails to deliver the property as promised.

For real estate contracts, it means the court can force the seller to sell the property to the buyer per the agreed upon terms.

The Impact of Extending Closing Date on Buyers

While sellers may have valid reasons for needing more time, their request can wreak havoc on the buyer’s plans.

Closing date delays can have significant financial, logistical, and emotional consequences for buyers.

Financial Implications

If the buyer has already sold their previous house or their lease expired, they will need temporary housing to accommodate an extension.

Extra days in a temporary living situation aren’t free. Buyers may have to pay for an extended hotel stay or short-term rental. There could also be added storage fees for belongings that have been moved out of the previous home.

Mortgage rate locks may expire, meaning buyers have to gamble on applying for a new loan at unknown rates.

Interest Rate Locks

When a buyer signs loan approval documents, they usually lock in an interest rate. The rate lock is only good for a short period, so if the seller has to extend the closing date, the buyer may lose the rate lock.

If interest rates are rising, that could mean that the lender will offer them a higher interest rate in the future.

Disrupting Moving Timelines

By the original closing date, buyers have likely booked movers, arranged utility transfers, and scheduled time off work for moving day.

Pushing back the closing at the last minute throws these plans into chaos. Movers may not be available on the new date, or they may charge a cancellation fee.

Emotional Letdown

After powering through the stressful real estate transaction process, buyers are eager to get keys on closing day. A delayed closing deflates that excitement and leaves buyers in limbo. Even if the buyer agrees to the extension, they still have to deal with the emotional letdown.

While an extension request isn’t necessarily a deal breaker, buyers should assess these potential impacts and negotiate carefully to protect their interests. Don’t let the seller off the hook too easily.

What to do When the Seller Wants to Extend the Closing Date? 

So, the dreaded extension request has arrived. Before panicking, let’s walk through some steps buyers can take to address this scenario strategically.

Your best resource is your real estate agent. They likely have experience managing closing delays and can guide you in handling the seller’s request. Lean on their expertise in negotiating on your behalf with the seller’s agent. If things get overly contentious, your agent may advise you to engage a real estate attorney to find a compromise.

An experienced professional can assess the validity of the seller’s reasons for needing an extension and the contractual soundness of their request. They can also strategize on options that protect your contract interests while staying on track to complete the home sale.

If you don’t already have an agent, find the best representation by comparing local realtors with FastExpert.

Buyer’s Legal Protections: Contract Contingencies

The real estate purchase agreement usually outlines the circumstances under which the closing date can be extended. This includes who can request an extension, under what conditions, and how the extension must be agreed upon and documented.

In most contracts, both parties must agree to any extension unless the contract specifies that one party has the right to extend unilaterally under certain conditions.

The contract may specify penalties for failing to close on time or remedies if the other party is at fault for the delay. This might include compensation for costs incurred due to the delay.

If the seller refuses to close or delays the closing without a valid reason or contractual basis, the buyer may have legal recourse through a lawsuit. Remedies could include specific performance (forcing the transaction to complete) or seeking damages for breach of contract.

Various states and localities have specific laws that may influence the rights and obligations of both parties in the event of a closing delay. These might provide additional protections beyond what is stipulated in the purchase agreement.

Your real estate agent should be able to provide general guidance on the rights and protections allotted to you through your contract and the state’s real estate laws. However, it’s best to consult with a real estate attorney for reliable advice. An attorney can advise based on the contract specifics and local real estate laws.

Negotiation Strategies for Buyers

When a seller requests to extend the closing date, it throws a wrench in the buyer’s plans. While sellers may have valid reasons for needing more time, their ask can negatively impact the buyer’s finances, moving logistics, and emotions.

It’s reasonable for home buyers to want concessions or compromises in return for agreeing to an extension. However, dealing with these negotiations requires strategic thinking and skillful communication.

Talk to Your Agent

Your first step is to talk to your real estate agent, who is your ally throughout negotiations. Lean on their expertise and let them represent your interests. Experienced agents have likely handled similar extension requests before and know how to get fair concessions from the seller. They understand the market conditions, what the contract specifies, and the best course of action.

Request Concessions

When a real estate closing date is postponed, buyers often face unexpected inconveniences and additional expenses. It’s reasonable to ask the seller for concessions in exchange for agreeing to a delayed closing. Potential options include:

• A daily credit.
• Loan-related cost reimbursement.
• Reimbursements for temporary housing arrangements.
• Professional cleaning.

Consider a Leaseback

A leaseback allows the seller to stay in the home as a tenant for a period after closing. This provides them time to secure their next home.

As the new owner, buyers collect rent during the leaseback term, giving them a financial incentive to allow the seller to stay in the property.

Adjust the Agreement

Ask to modify other terms, like requesting:

• The extension is contingent on final inspections.
• The seller covers any rescheduling fees if you miss moving dates.
• Home improvements or repairs as compensation.
• A home warranty as compensation.

In most real estate transactions, the seller is motivated to complete the sale. It’s essential to approach negotiations with a mindset to find a solution that feels equitable to all parties, not to take advantage and get more money out of the other party.

Concessions Buyers Can Request from Sellers

When a seller asks to push back the closing date, it’s reasonable for the buyer to seek concessions in return. After all, the seller’s request imposes inconvenience, added costs, and general disruption on the buyer’s plans.

Though understandable, the seller’s need for an extension shouldn’t come at the buyer’s expense. With the help of an agent, the buyer can negotiate creatively to achieve a compromise that works for both parties. There are various concessions the buyer might secure to help offset the hardships the extension brings about.

Negotiate a Per Diem Penalty

When a seller delays closing, it’s reasonable for the buyer to request a per diem penalty. This daily fee compensates the buyer for costs incurred from an extended closing date. 

The per diem charge pressures the seller to finalize the deal promptly. It also covers the buyer’s added expenses like higher interest, taxes, utilities, etc.

The amount of money allotted in a per diem penalty will vary depending on the contract and real estate market. Savvy buyers avoid accepting a delay without securing this concession.

Price Reduction

If the seller wants to push back closing, asking for a price reduction is a fair concession request. Even a small decrease shares the inconvenience of their extension request. It provides financial relief since the buyer’s additional interest, fees, and carrying costs grow with a longer escrow period.

If the seller truly needs the extension, they may be open to dropping the price to keep the deal on track.

Closing Costs Contribution

Buyers can request the seller pay a portion of their closing costs if agreeing to an extended timeline. This helps offset new expenses the delay triggers.

If the seller expects the buyer’s accommodation, it’s reasonable to seek assistance with this closing cost. It incentivizes the seller to expedite the process.

Rate Lock Assistance

If the buyer’s rate lock expires due to the seller’s extension request, they can ask the seller to cover rate lock extensions or price increases.

This protects the buyer from higher loan costs. If the seller causes the buyer to lose their initial rate lock, it’s fair to request they bear responsibility for securing a new competitive rate.

How to Protect Yourself if a Seller Asks for an Extension

Buyers understandably get nervous when a seller requests to push back the closing date. After all, they’ve planned their move, lined up movers, and made many other arrangements based on the original timeline. They want to ensure that the real estate transaction will result in a sale.

Buyers shouldn’t necessarily accept a delayed closing without considering protections. With strategic precautions, buyers can often reach an agreement that works for both parties. 

Amend the Purchase Agreement

Any changes to the original purchase agreement should be made in writing and never done as a “handshake deal.” Work with your real estate agent to draft an amendment or addendum that outlines the new terms.

This includes specifying the new closing date and any concessions the seller agreed to provide. Get the seller’s signature to make it legally binding.

Consult a Real Estate Attorney

If the extension request is complex or you are uncomfortable with the seller’s demands, seek advice from a real estate attorney. They can review the contract language around extensions and help craft a fair compromise. Having an attorney involved can also pressure the seller to be reasonable.

Conduct Final Walk-Throughs

Schedule a final walk-through right before the new closing date to ensure the property’s condition hasn’t changed. Require the seller to repair any new damage that occurred during the delay.

Maintain Flexibility

Keep an open mind if the seller’s request seems legitimate. If possible, try to work with them in good faith. Not every extension requires an adversarial negotiation. The transaction will close faster if both parties aim for an understanding.

With the help of your agent and real estate attorney, you can often reach an amendment that protects your interests while still allowing the deal to proceed.

Contract Extension: Should a Buyer or Seller Agree to One?

Whether agreeing to an extension of the closing date makes sense depends on the specific circumstances of the situation. There are cases where granting an extension is reasonable for buyers and sellers:

• If the seller has a valid, unforeseen reason for needing more time, such as a job relocation issue or problem finding their next home,
• If the buyer’s lender or other factors outside their control cause a delay, the seller may want to extend the contract to avoid the contract falling through.
• The seller is finalizing home repairs that were agreed upon in the contract.

Short extensions of a week or two are generally easier for parties to accommodate than longer ones of a month or more.

There are also scenarios where a requested extension should give buyers or sellers pause:

• If the party requesting an extension has previously delayed the transaction or has not acted in good faith.
• If the needed extension length is excessive.
• If market conditions have changed significantly and the buyer feels the property value has dropped.

Ultimately, it’s a case-by-case assessment. With the help of experienced real estate professionals, buyers and sellers can usually find an agreement that suits everyone’s needs.

When to Walk Away

A real estate contract requires good faith from both buyer and seller. While occasional unforeseen delays are understandable, buyers rightfully expect the seller to work diligently to close on time, barring emergencies.

Yet sometimes, sellers make extension requests that seem excessive, unreasonable, or even in bad faith just to back out of the real estate transactions. At a certain point, repeatedly accommodating the seller’s delays can work against the buyer’s best interest, and forcing a specific performance becomes too costly.

Assess each extension request, but know when enough is enough. These are instances where walking away becomes the prudent move:

• Repeated Extensions
• If the seller asks for multiple extensions, especially for reasons within their control, the buyer may be justified in withdrawing. At some point, enough is enough.
• Excessive Delay
  If the seller’s requested extension length is unreasonable given the circumstances, such as seeking a 6-month delay, it may be impractical for the buyer to wait that long.
• Lack of Good Faith
  If the sellusesing delay tactics in bad faith just to back out of the deal, protect yourself by walking away.
• Property Condition has Declined
  If the property’s condition has declined either as a direct or indirect result of its inhabitants, then walking away from the sale is often the smart move.

Consult your agent and real estate attorney, but don’t feel obligated to accept unreasonable extension requests. At some point, it may be best to walk away and move on.

Navigating Closing Delays? An Experienced Agent Helps You Stay in Control

When sellers request closing extensions, buyers can feel powerless and frustrated. However, skilled real estate agents know how to advise and empower buyers during extension talks. They help craft win-win compromises so real estate transaction deals stay on track. 

If you’re not already working with an agent, it’s not too late. FastExpert helps you connect with an experienced real estate agent through an easy search platform. Find top-rated agents who understand your local market inside and out.

Choose an experienced agent who can handle extension requests to protect your interests. With the right agent, you’ll stay empowered and in control throughout the home-buying process.