You’ve purchased or sold your home and have a definitive closing date. You start to mentally prepare for your move and are also a bit excited. Now one of the parties what’s to change the closing date. Before you start to panic, here’s how the whole process works and the options available to both parties. Keep in mind someone in this transaction will be affected more then the other so it’s important to be as understanding as possible.
The Initiating Party
The initiating party is either the buyer or seller asking for the change in the closing date after the agreement of purchase and sale has been negotiated and accepted. It can happen anytime between acceptance and the closing date. What will typically happen is the Realtor will write up an amendment with the new closing date requested.
The Accepting Party
Now it’s not that simple as just writing an amendment and changing the date, the other party has to be willing to accept your new requested closing date and what if they don’t? Hopefully you have a very good reason for changing the date and the other party is willing to accept it. If not, then unfortunately you may be SOL!
Tips On Dealing With An Accepted Closing Date Change:
You sold your home and purchased another one. You decided to be the nice guy or girl and agreed to the new date, but now your closing date does not match the closing date of your new home. How will you close the deal? Where will the money come from? This is where bridge financing comes into play. It is designed for borrowers who are closing on their new home first before their existing one. The bank will lend the borrower the money to close the transaction on the new home and maintain the existing mortgage on the old home until it closes. Certain lenders require certain criteria so it’s best to check with your lender first before agreeing to anything.
You need to be out of your current place of residence, but your closing date is still a few days or weeks away, what do you do? First off you may need to ask a relative if you can couch surf until your new closing date or arrange a room in a hotel, but what to do with your stuff? For someone who has moved way too many times in their lifetime, I recommend arranging a pod for your furniture and personal belongings versus putting them in storage. The pod is dropped off right in front of your current home which allows for easier and more convenient packing and taken away and stored when you’re done. Consider hiring a mover for a couple of hours to help pack the pod, after all they are expert packers. This way you avoid getting a truck, packing up your stuff, driving to a storage unit, unloading everything, getting another truck, reloading it once it’s time to move and unloading it again into your new home…wow I’m tired just reading that!
If you’re the nice person agreeing to the closing date change, but being inconvenienced by it and incurring additional costs, why not ask the other party to fork out some money to ease the financial burden. This can be done through the lawyers in the form of a holdback on the actual closing date, but once again both parties have to agree.
When you are in the midst of negotiating an offer and there is a possibility that either party may have to change the original closing date, why not instruct your Realtor to put in a clause in the original agreement of purchase and sale. This way if both parties accept the offer with the clause, it won’t come as such a big surprise when there is a request to change the original closing date and both parties know in the back of their mind that it’s a possibility. Keep in mind this may not always work, as the parties may not agree to it in the original offer.
Extension On Your Lease
If you’re renting a property, have given your notice to the landlord and now agree to a closing date change that is later then your agreed upon move out date with your landlord, try asking your landlord for an extension. This will only work if someone else isn’t moving into your place on the same day you were originally supposed to be out. Obviously nothing in life is free and you will have to pay the landlord for the additional days you will be staying at your current place, but then you can explore the “money talks” option above.
At the end of the day, both parties have to agree to the change in closing date, if not it remains as per the agreement of purchase and sale that was already negotiated and accepted. So before you freak out, explore all your options and make sure it makes sense for you.
If you have a question regarding your closing date, make sure to send it my way!
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