[M07/S07] Delays in the Home Sale Process

No matter how carefully you have prepared your home, or how carefully you have vetted the buyer, it is possible that there will be a delay in the home sale process. Actually, it’s fairly common (although less common than it used to be, thanks to improvements in the mortgage process). I don’t have any numbers available, but in my experience, perhaps about 20% of real estate transactions close late. Usually it’s just a few days, but some delays can drag on for a week or two – or more.

When closing delays happen, they are usually due to problems with the buyer’s financing. The lending process is incredibly complicated, and has become only more so after the 2008 sub-prime mortgage crisis. A brief delay caused by the time it takes to secure the buyer’s financing is almost to be expected.

If the buyer is even a day late to release a contingency or to close escrow, the seller may issue the buyer a notice to perform, or a demand to close escrow. After the seller issues this kind of notice or demand, the seller can then unilaterally cancel the deal if the buyer fails to perform as required by the contract.

The standard California purchase agreement does not give the seller any remedy for a buyer’s closing delays. There’s no language which allows the seller to, for example, charge the buyer a per-diem fee for a late closing. In fact, with current lending laws, any change in the buyer’s closing costs requires a re-disclosure to the buyer and will only further delay closing

Change Happens