Short Answer
If you cannot close on time, the first step is to communicate with the seller through your agent as soon as possible. Most contracts include a time is of the essence clause, meaning the closing date is a firm deadline. Your options include requesting an extension, which the seller may or may not grant, or potentially facing penalties or losing your earnest money deposit. The sooner you communicate, the more options you have.
Missing a closing date can have serious consequences, but it is not uncommon. The most common reasons for delays include financing issues, appraisal delays, title problems, or the seller not being ready to move. If you know you cannot close on time, tell your agent immediately. Your agent will contact the seller's agent to request an extension. The seller may agree to a short extension, especially if they understand the reason and you have been communicative throughout the process. The seller may request compensation for the delay, such as per diem costs or covering their additional carrying costs. If the seller refuses to extend and you cannot close, you may be in breach of contract. The seller could keep your earnest money deposit as damages, or in extreme cases, sue you for specific performance. The best way to avoid this is to stay in close communication with your lender, respond to document requests immediately, and address potential issues early.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
Most closing delays are avoidable with good communication and preparation. I track every milestone in the closing process and stay in constant contact with the lender. If I see a potential delay coming, I address it early. If you are worried about your financing or any other issue, tell me immediately. The earlier we know, the more options we have. I have negotiated many extensions, and in most cases, sellers are reasonable if they know what is happening and when to expect the closing.
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