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Ralph's Helpful Tips: Closing Dates - A Foolproof Way of Avoiding Drama

By
Real Estate Broker/Owner with Metro Life Homes RS-78439 / BRE #01708344

Ralph's Helpful Tips: Closing Dates - A Foolproof Way of Avoiding Drama

Many times during the course of a purchase transaction, issues may arise that may need additional time to address, resulting in a need to extend the closing date of the transaction.

In addition, the actual closing date per contract that results after the last date of the last signature on the contract may end up being a day on a weekend or holiday.

In both of these scenarios, the usual solution is an addendum to the contract extending the closing date to a more appropriate date.

Well, sometimes the need to extend escrow is a result of an issue that is due perhaps to some prior unknown or undisclosed issue, which many times creates stress, mistrust, or frustration for the parties at hand.  It may be the case where by the time you get to the point where it is discovered that an extension is needed, one or more parties have been put through alot, and signing another document may at that point seem like the straw that broke the camel's back, resulting in a cancelled transaction.

Having to avoid drawing up an addendum and one less piece of paper that needs to be agreed to and signed may just save your next transaction.

The solution?  Easy-breezy!

Just use the following phrase in the close-of-escrow date field:

"First business day XX days after acceptance"

This will take care of any issue of a closing take taking place on a weekend or holiday. 

And if it's been a bumpy, emotional process to head towards a closing, having to avoid getting another piece of paper signed by all parties may end up saving your next transaction that takes a "dramatic" course.

Hope this little tip ends up with your academy award being an escrow check in place of a cancellation form!

Watch for my next helpful tip in my "Ralph's Helpful Tips" Series.

 

Comments(25)

Chris and Dick Dovorany
Homes for Sale in Naples, Bonita Springs and Estero, Florida - Naples, FL
Broker/Associate at Premiere Plus Realty

Interesting thought.  I guess with all the smartphones, tablets etc it's easy to put a date in the contract that isn't a weekend.  I also try to avoid Mondays, Fridays and the end of the month.

Aug 10, 2012 01:51 AM
Kathryn Maguire
GreatNorfolkHomes.com (757) 560-0881 - Chesapeake, VA
Serving Chesapeake, Norfolk, VA Beach
Our contracts here state that closing is on or before date "x". Regional differences are so interesting!
Aug 10, 2012 01:58 AM
Teral McDowell
Referral Patners LLC - Murphy, TX

Like Jerry #2 stated Texas we put an actual date; it sounds reasonable to me for contracts that do allow this language and a good tip to share with them.

Aug 10, 2012 02:02 AM
Adrian Willanger
206 909-7536 AdrianWillanger-broker.com - Seattle, WA
Profit from my two decades of experience

Great tip, when writing up I've leaned to have a calendar along side me to look at what holidays and other non business days could interfere with on-time closings. 

Aug 10, 2012 02:09 AM
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Closing date language is always a bit tricky at times, here in NYC the attorney's negotiate closing date language. 

Aug 10, 2012 02:17 AM
Allan Sanchez
Roseville CA & Rocklin CA Short Sale Agent - Roseville, CA
Rocklin & Roseville, Short Sale Agent

Great tip to avoid a lot of frustration and clear up any ambiguity from the start!

Aug 10, 2012 02:32 AM
Gary Frimann, CRS, GRI, SRES
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

How about going just date specific?  That is a perfect target rather than a moving target.

Aug 10, 2012 02:34 AM
Nan Jester
Exit Real Estate Gallery Jacksonville Beach, FL - Jacksonville Beach, FL
Realtor, Exit Real Estate Gallery

Language in a contract is always important.  Thanks for the tip.

Aug 10, 2012 03:22 AM
Jennifer Chiongbian
Specializing in all types of Manhattan apts & townhouses - Manhattan, NY
Real Estate Broker - NYC

Sometimes there are very easy solutions to help circumvent a potentially disastrous event.  Great tip!

Aug 10, 2012 04:11 AM
Morris Massre
Pembroke Pines, FL
Real Estate Instructor Broward County Florida

Would you use the same statement on a short sale contract?  That's all I seem to get down here.  Currently I use "20 days from bank approval," but even with that I still need extensions. Banks are notorious for never closing on time here with short sales.

Aug 10, 2012 04:50 AM
William Johnson
Retired - La Jolla, CA
Retired
Hi Ralph, Congratulations on the feature, I would have to echo Jeff Dowler's comments # 5. The lending issue is getting so much out of control with some of the outrageous issues coming from the underwriting departments and creates so much unnessessary strees for Buyers and Sellers. And I am talking about fully qualified Buyers.
Aug 10, 2012 12:04 PM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County
Ralph: Will ZIPforms6 allow you to just type that in or do you have to select a date on the calendar?
Aug 10, 2012 01:16 PM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

I'm glad this was featured, congratulations and good tip to Ralph.  Sometimes I wonder why the lender isn't more up to snuff when it comes to submission of the file . . . they wait so long too and then underwriters might have another thing they need.

Aug 10, 2012 02:45 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Congratulations on your featured post. I will share this with others.

Aug 10, 2012 09:36 PM
Greg Miller
Ruoff Home Mortgage - Sarasota, FL
Florida Home Loans - Conventional,FHA,USDA,VA

Great tip Ralph. I wished more agents in my area would do this. In Indiana we can choose either a date or days after acceptance. Most of the contracts that I get are started out with closing date listed about 30 after the initial offer and then there will be several counters taking 7-10 days, but they always leave the closing date the same. Then I get a PA on a FRIDAY afternoon & have 3 weeks to close. Your suggestion would be most helpful.

Aug 10, 2012 10:49 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Ralph, here our contracts have to have a specific termination date so your suggestion would not work. The biggest problem I see is buyers and lenders don't think they need to comply with contractual dates in the contract.

Aug 10, 2012 11:37 PM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

Ralph, I remember when I was novice - and we had closing on a President's Day which was a holiday.....lessons learned hard way. (And there was no AR then)

Aug 11, 2012 01:14 AM
Ralph Gorgoglione
Metro Life Homes - Palm Springs, CA
California and Hawaii Real Estate (310) 497-9407

Melissa, in Zipforms you can do either.  Type in an amount of days, or write in text.

Aug 11, 2012 10:30 AM
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Going for drama-free transactions: a laudable goal!

Aug 14, 2012 01:05 AM
Kristin Hamilton CA REALTOR
Berkshire Hathaway California Realty - Beaumont, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Ralph,

In California, if the closing date is a Sat or Sunday, it is automatically moved to the next business date. I work for banks so they get mad if I do not check and make sure the closing is a M-F and not a holiday so it is automatic for me to check anyway. I liked your idea and would certainly save a lot of headaches.

Aug 21, 2012 02:26 PM