My Closing Date is Extended, Now What?

By
Real Estate Agent with Value Added Service, 602-620-2699 SA5376460000
https://activerain.com/droplet/558H

Buying and selling homes has a lot to do with timing.  When negotiating contracts, it’s common to want to select a closing date on a Friday or the first or last day of the month. Know that those are the busiest times of the week and month for title companies and lenders.  With the current financial climate, most closing dates are chosen as to the 30 day window of time that might be needed from the purchase contract date to accomplish financing goals. So watch your closing dates to avoid extending a closing date.

 

A purchase contract date starts the clock ticking.  A lender typically needs 30 days or more to process a loan for a borrower.  However, it’s always wise to allot enough time, ie more than 30 days, in case there are “snags” in the borrowing process.  These days, most lenders will suggest 45 days due to new guidelines created by the Consumer Financial Protection Bureau (CFPB).

 

A “snag” could be that a borrower has moved money from one account to another and needs to document that money transfer to an underwriter.  If the borrower has applied for new credit, increased the debit on a credit account, or any other larger financial transaction, this could stall or even kill the mortgage process.  Stalling the process may delay the closing date, so be prepared for that to occur.

 

If the mortgage process hits a road block and the buyer no longer qualifies for the mortgage, there may be circumstances where they lose their earnest money if the snag was intentional, but for most circumstances,  not qualifying may signal a return of the buyer’s earnest deposit to the buyer. 

 

 

If the closing date is postponed due to any number of reasons, know that you are still responsible for a mortgage payment, home owner’s insurance and utilities.  As long as the home is still in your name, you are responsible for maintaining it.

 

Extending a close of escrow date can be frustrating as it produces another round of phone calls to movers, utility company shut off dates, and may stall your next move.  Being conservative in dates by doubling up on utility services between your current and next home can be extremely helpful if you’re next move includes setting up services.  Remember that carpet shampooers need electricity and water to operate.  And transferring all mail by using USPS.com helps to eliminate the need for straggling mail and will cover some of the bases.

 

Making everyone aware of your situation may help to alleviate some stress as others have probably encountered this same phenomenon.   Communicate your dates and moving details with your  loan officer and title representative so they know how to reach you.  Family and friends may need to be enlisted if you end up without a place to land for a day or two.  Investigate moving services that will allow for a truck to be parked with belongings or storage capabilities should your next move be delayed.

 

 

It's always my policy to use a "team" of people who help manage the entire process.  The lenders on my referral list manage timelines very well and help you to prepare for every aspect of the financing process.  The title reps that I refer manage the file effectively and plan for any needed documents in advance.  Those critical elements help to have all timeines on track during a real estate purchase and sale.

 

 

Planning ahead by writing a 45 day escrow/closing period helps transactions to stay on targe.  Having built in time that allows for any delay helps closings to occur on time!  

Until then, take care of yourself first and if you’re on hold for a day, spend it at a relaxing spa to help alleviate the stress! 

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Rainmaker
3,815,112
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Jan Green ,

We just extended a closing on one of my listings from Friday to next Monday..it happens and is actually is working best for both parties.

Jun 12, 2017 05:21 PM #1
Rainmaker
978,722
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Good thing it's working for both buyer and seller Dorie Dillard  because as you know, it doesn't always!  Thank you for commenting!

Jun 12, 2017 08:57 PM #2
Rainmaker
4,447,791
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Jan,

You wrote a wonderful post explaining everything that can happen.  Enjoyed reading this.  A

Jun 12, 2017 09:21 PM #3
Rainmaker
978,722
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Alexandra! You guys are up late Ron and Alexandra Seigel , but then again I'm mountain time :)  Have a great rest of your night!

Jun 12, 2017 09:30 PM #4
Rainmaker
3,608,147
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Jan. This post is focused and informative. Very little in life goes as scheduled, so better be prepared.

Jun 13, 2017 05:59 AM #5
Ambassador
3,090,321
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

The best way to avoid delays is to build extra time into the contract and do 45 or 60 day closes.  And as you say, avoiding the end of the month can avoid delays too.

Jun 13, 2017 10:30 AM #6
Rainmaker
978,722
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Spot on Sheila Anderson !  Best to be prepared for delays so the delay effect isn't so tough.  Thanks for commenting! 

So right Chris Ann Cleland .  I always write 45+ day contracts now and use a lender who sends weekly videos of what to expect.  Works like a charm to reduce the anxiety when delays happen.  

Jun 13, 2017 10:40 AM #7
Ambassador
2,778,333
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Jan - Good advice. Closing delays create a cascade of issues that have to be dealt with, and good communication is key to making it just a minor hiccup in an otherwise smooth process.

Jun 13, 2017 03:20 PM #8
Rainmaker
2,538,825
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

It's not uncommon for closing dates to be extended.  This is good information to let clients are not alone in this when it happens.

Jun 14, 2017 03:11 AM #9
Rainmaker
978,722
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

So true Dick Greenberg .  Managing those hiccups is paramount to a good relationship with clents and lets them know that we have their backs! 

Myrl Jeffcoat  you hit the nail on the head!  Thanks for commenting and have a great day!

Jun 14, 2017 09:24 AM #10
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Rainmaker
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Jan Green

HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN
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