The escrow process can be stressful for buyers and sellers alike. Inspections and mortgage applications give buyers extended to-do listings with tight deadlines, while sellers remain busy making repairs and preparing to close on their new homes. It’s typical for a single party to ask to delay closure escrow. Although it’s normally the buyer who wants more time, there are conditions that prompt a seller to extend the deadline. The purchaser’s best recourse is contingent upon the conditions of the petition and the details of the sales arrangement.
Causes of Delays
A seller might delay escrow in order to get more time to pack and move. It’s also possible that the seller might have experienced a glitch with funding his new residence or is going through a delay with that new property. These types of issues can be resolved with just a little patience. But if you are buying a home through a brief sale, the sellers might be stalling because they are living in the home for free. Another frequent situation is for a regretful seller to cause intentional delays in hopes that the buyer will terminate the revenue agreement.
Check Your Contract
Browse through your agreement with your realtor or lawyer to find out whether the closing date is set in stone and also to determine if you’ve got an obligation to go through with the sale if the seller misses the closing date. If the contract states a specific date, the seller can’t delay with no written agreement unless your agreement automatically extends the deadline. If the verbiage reads that closing is to occur “on or about” a certain date, the seller has more leeway — with as much as 30 days — before she’s in danger of breaking the contract.
The contract typically provides a purchaser several options for dealing with a vendor’s escrow delays. Step one is to give the seller more time by getting your agent or lawyer prepare an addendum to the contract which delays closing by however much time the seller requirements. You may ask for a credit in the event the arrangement ends in out-of-pocket expenses, such as additional rent or mortgage payments. If, on the other hand, you are unwilling to postpone closing and your contract doesn’t obligate you to stick it out, then you can deny the extension and walk away without risking your earnest money deposit. Nevertheless, your deposit may be all you have the right to gather.
A less desirable choice is to allow the seller to lease the home from you for a certain number of months or weeks after closure. This raises liability issues which you need to discuss with an attorney and your insurer. In the very least, implement a lease and require the seller to take renters insurance for both his possessions and personal liability. Finally, you may sue the seller for “specific performance” since the seller neglected to give you title to the property in exchange for your payment. A lawsuit may be an unrealistic choice because of the time necessary to get your case heard. Contact an lawyer to discuss all your options.