As a real estate attorney, I have seen every reason or excuse as to why a buyer can’t close on time and requests an extension of the closing date. The most common reason being that the buyer’s lender is not ready with the loan approval, due to a plethora of reasons, and the buyer has not been yet been approved for the mortgage. What are your options as the seller, if this keeps happening?
When you agree to sell your property to a buyer, both parties sign a contract. For the contract to be valid, a closing date is written into the contract. Depending on how long the buyer’s loan process takes, the date may change, but a date must be stated in the agreement. In the standard real estate contract, there is a clause called the mortgage contingency. If for some reason, the buyer can’t qualify for a mortgage they can cancel the deal and get their earnest money back so long as the cancellation is done within the allowed timeframe.
If you have been agreeing to requests by the buyer to extend the mortgage contingency and closing date deadlines, then the buyer’s earnest money is protected in the event he or she must cancel. Your only option at that point is either continue to wait it out with the buyer’s lender to see if he or she eventually gets qualified, or you can say no to the next contingency extension request. That will force the buyer to cancel the deal, however, he or she will get the earnest money back.
Buying and selling real estate can be a highly emotional and stressful transaction. We know the process, can provide excellent advice as to how to handle mortgage approval delays, and would be happy to work with you on your deal. Contact us today to ensure your deal goes as smoothly as possible.