Closing Dates and why They can ChangeSeptember 28, 2021
Buying or selling a home can be a stressful process due to the number of elements to keep track of. Among these elements, the closing date is one of the most important. The closing date is defined as the date that the seller agrees to the transfer of ownership of their home to the buyer. Closing dates can be flexible depending on the parties involved and the timeline, but there are also other important elements to consider. As experts in real estate and conveyancing, the team at Sidhu & Associates understands how complex the buying/selling process can be. That is why we have provided some information on closing dates and why they can change to help buyers and sellers prepare for the unexpected.
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4 Reasons That Closing Dates Can Change
Though there are many reasons why closing dates can change, the following 4 are some of the most common:
1. Appraisal Issues
Mortgages will often require an appraisal of the property before they are approved. While the buyer and seller will agree on a price, the purchase cannot be closed until the appraiser has done their part. In most cases, the buyer will not be able to borrow more than a certain percentage of the value of the property based on the value determined by the appraisal. If the purchase price is deemed to be too high, the mortgage may not be approved, and the closing dates will need to change as a new agreement will be needed.
2. Unrealistic Deadlines
The purchase offer will typically set the approximate deadlines for closing, possession, and inspection dates (if requested). In some cases, these deadlines may not provide enough time to secure financing, complete an inspection, and perform other tasks. If the buyer is not able to complete all required tasks to remove subjects, they can work with the seller to change the closing date, but the seller is under no obligation to do so.
3. Financing/Mortgage Rejection
Even if the buyer is pre-approved for a mortgage, the mortgage could be rejected before closing. This rejection can occur for several reasons, but they will all result in postponing the closing date. While a new mortgage can be obtained in rare cases, the seller will often need to seek a new buyer.
4. Incomplete Repairs
A home inspection may reveal defects that affect the value or safety of the property. A buyer could request repairs to be completed, making the purchase contingent on those improvements. When repairs are agreed to by the seller, the pre-closing preparations can typically go forward assuming the repairs will be completed. If they are not completed in time, the closing date may need to be delayed.
To learn more about closing dates or to learn about how we can help with your real estate transaction, get in touch with the team at Sidhu & Associates. We can be reached through our online contact form and will be happy to answer any questions you may have.