Closing on a house takes time because lenders need to thoroughly vet the borrower and property (income, credit, appraisal) while title companies resolve any ownership issues (liens, disputes); major delays often stem from financing hurdles, low appraisals, title problems, inspection issues, or seller/buyer contingencies, all requiring extensive due diligence and communication among many parties.
Loan and Financing Delays
Lender-related delays are among the most common reasons for postponed closings. These can occur when final loan approval is pending, underwriting concerns surface at the last minute, or required documentation is incomplete.
Job changes, layoffs, family emergencies, accidents and injuries, cash flow issues, and missing documents—all of these things, along with last-minute hiccups, may prompt the buyer to request to push back the date of closing in order to have extra time to address these issues.
If you have a good reason for missing the closing date, the courts will usually decide in your favor and grant a reasonable postponement, giving the buyer an extra 30 days to complete the transaction.
12 Activities to Avoid Before Closing on Your Mortgage Loan
Let's look at common reasons homes under contract fail to close and what to do to prevent this from happening to you.
If the seller refuses to close or delays the closing without a valid reason or contractual basis, the buyer may have legal recourse through a lawsuit. Remedies could include specific performance (forcing the transaction to complete) or seeking damages for breach of contract.
However, the seller or purchaser may need to re-negotiate the completion date if circumstances change. Completion times of two to four months are becoming increasingly common. And sometimes, especially where the deal is subject to planning permission, completion can be delayed for a much longer period.
Can a seller refuse to extend the closing date? Yes, the seller can refuse to extend the closing date. In most cases, if the buyer cannot close by the agreed-upon date, the contract essentially voids, and the seller is entitled to keep any earnest money.
Offer on a property only what you feel comfortable spending. Stick to your guns and don't feel compelled to offer over the odds if you really don't want to. The right property will come along in time. Most of my clients don't succeed on their first attempt.
The contract is in the five-day attorney review period: Most real estate contracts include a standard five-day attorney review period. During this time, either party's attorney can cancel the contract for any reason—no questions asked. While this gives sellers a legal way to back out, it's not commonly used by sellers.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
As you can imagine, it s not uncommon for homebuyers to experience delays related to the various aspects of the closing process, but these delays can be both frustrating and costly. All too often, a closing is delayed because a homebuyer chooses the wrong lender.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
If contracts have been exchanged and completion does not happen on the expected day the party at fault for the delay will be liable to pay compensation. The party who was ready to complete may also eventually be able to cancel the contract.
The Rule prohibits the lender and consumer from closing or settling on the mortgage loan transaction until 7 business days after the delivery or mailing of the TILA disclosures, including the Good Faith Estimate and disclosure of the final Annual Percentage Rate (APR), even when all parties are prepared and desire to ...
Structural issues, water damage, and poor drainage can lead to expensive repairs and even make a home unsafe or ineligible for financing. Pest infestations and electrical problems are also major red flags that can have significant financial and safety implications.
The closing (also called the completion or settlement) is the final step in executing a real estate transaction. It is the last step in purchasing and financing a property. On the closing day, ownership of the property is transferred from the seller to the buyer.