Extensions on Closings in Real Estate
“In the United States, millions of single-family homes are purchased each year. Since buying a home involves a number of steps, the process does not always go smoothly. House inspections uncover necessary repairs, pest inspections uncover termite infestations, and appraisals come in under the purchase price. Title defects are discovered and underwriters request additional documentation from lenders. Any of these issues can cause the closing on the purchase of a home to be delayed.” Says a blog written on the website home guides.sfgate. With that being said it is usually ideally up to the home seller to decide if they really want to follow up on the extension. However if the seller didn’t give accurate information on their property they listed on the contract. The buyer has all probable cause make an extension or pull out of the deal. “An executed purchase agreement to buy a home is a legally enforceable contract. Each agreement provides a closing date agreed upon by both the buyer and the seller. Most agreements include a due diligence period which allows the buyer to back out for no reason or for specific reasons, including an unanticipated level of repairs, pest concerns, or grading issues.” So once passed the due diligence period it is usually vital that the buyer doesn’t pull out due to them being able to loose funds provided like deposits or costs of any sort. In addition if the buyer confronts any minor or major problems from the inspections performed, they can present it to the seller and it is up to them if they want to address the problem only if the buyer is still interested in the home. So if compromised they are able to inform their realtors of an extension. Sometimes other issues arise including title defects and low appraisals. Both are serious concerns for the seller. A title defect can prevent the home from being sold with clear title to anyone, not just the current buyer. A low appraisal means that the buyer must increase the down payment amount unless the seller agrees to reduce the purchase price. With that being said both parties must make an agreement, if by any reason there are certain problems preventing the process on the closing that may cause any party to break the contract and may lead to loosing funds particularly on the buyers side. Home guide website also mentions “Rarely, a seller will request an extension from the buyer. Reasons for the request include an inability to find another house or apartment and issues involving home ownership, as in a divorce. For these requests and other non-lender initiated requests, the risk exists that the mortgage rate lock on the loan will expire. If the mortgage rate is reset to a new rate, the loan must go through the entire underwriting process again.” Once again it is always vital that both parties always no matter the circumstances go over the contracts carefully, and not only go over but follow what the contracts say to have a smooth closing.