I acted for a client back in November who was selling a house that had belonged to his father, and that he had inherited. On the day before closing, I got a phone call from the buyer’s lawyer that the lender required an appraisal and that they would not get financing without it. At that point, even if the appraisal could have been done that day, it would have been at least another three business days before they would have their mortgage money, so they were looking to extend.
Fortunately, because it was an estate sale, there was no issue with my client needing to sell in order to buy something else. However, we did ask for several things from the buyer:
- An increased deposit
- Additional legal fees
- Reimbursement for all of the house-related expenses for the additional days (insurance, etc.)
If there had been a mortgage, I would have asked for mortgage interest until the eventual closing date. I also would have required the buyer to cover any costs that resulted from the delay.
If you are a buyer and you find you can’t close on time, you have very little power. Essentially, you will need to give the seller what they ask for in order to extend, because the alternative is the seller declaring you in breach of the agreement and suing you for your down payment. You could lose that, lose the house, and end up paying all of those costs anyway.