Can seller move closing date? What are our rights as buyer?

22 Replies

Did they give you any reason? 

It may come down to a situation where you just have to tell them that you won't delay closing. I've been in situations where seller's had to delay because they needed more time for financing on the purchase of their new property or something legitimate. But if it's just a situation where they don't want to close on time, then I would see if you can work something out.  

You'll want to look and see what your purchase agreement says. Depending on the purchase agreement, you may have a provision allowing for delays for up to a certain amount of days without any consequences. If you have an agent that you are working with, I would talk to them about what options are allowed in your contract. 

Legally....no, they don’t have the unilateral right to change the closing date.

Practically.....what can you do if they don’t close on 9/18...sue them?  And how do s help you?

If it going to Actually cause you financial loss, like having to rent somewhere else for another month, you could ask for a credit.  Butt his happens all the time, especially with buyers needing more time.  Typically you are just best to go with it.

This is pure speculation on my part but it feels like they may be trying to capture one more month of rent from the existing tenants.  I'd let them buy 10/1 from me for whatever a month's worth of rent currently is (or if you'll be increasing rent, I'd aim for that figure) or stick your heels in with 9/18.

@Cassi Justiz

We are getting two duplexes. One has some carpeting and mold remediation that won’t be completed until week of Sept 23rd. Owner want to be in town for the closing but the new closing date he wants doesn’t work for my partner or I. I asked to close on one of the duplex on the original closing date of 9/18 and the other with problems whenever it works out for my partner and him...but they say no, they both have to close on same day, as we are getting a discount on both. So if we move this to the day he wants, I calculated a lost rent of 3.5k which they will not compensate for. I talked to an attorney and he said we can still close both on 9/18, and set aside an escrow account for the remediation cost. Told realtor that and he said seller does not want to pay for this escrow account and will not reimburse if cost comes in greater than current bid prices, so it will be on us to make up for all this difference. I’m gonna call title company to see what their thoughts are on all this and exactly how much to set up an escrow account.

Originally posted by @Angela MIller :

@Cassi Justiz

We are getting two duplexes. One has some carpeting and mold remediation that won’t be completed until week of Sept 23rd. Owner want to be in town for the closing but the new closing date he wants doesn’t work for my partner or I. I asked to close on one of the duplex on the original closing date of 9/18 and the other with problems whenever it works out for my partner and him...but they say no, they both have to close on same day, as we are getting a discount on both. So if we move this to the day he wants, I calculated a lost rent of 3.5k which they will not compensate for. I talked to an attorney and he said we can still close both on 9/18, and set aside an escrow account for the remediation cost. Told realtor that and he said seller does not want to pay for this escrow account and will not reimburse if cost comes in greater than current bid prices, so it will be on us to make up for all this difference. I’m gonna call title company to see what their thoughts are on all this and exactly how much to set up an escrow account.

Good move.  You seem reasonable in offering to close on the one where there are no problems.  For closing, you don't have to be there, you can get all the paperwork signed in advance (ie when you do it for the first one) and have you or your partner (or your realtor) inspect the property to ensure everything was done properly before taking possession.  Timing can be hard.  The remediation is out of their control as it is another company that is doing it unless you want to close before it is completed.

Closing on the two a week apart would still allow you to collect most of the rent.  Talk to the seller about splitting the rent for the other week (Sept 18-23) on the second unit.  Even if they won't, you'd still get 75% of the $3.5K (losing rent for the one week delay on the one unit).

Originally posted by @Angela MIller :

@Wayne Brooks

I don’t think rents will be pro-rated if we agree to a later closing date. So we will lose our on 3.5k. 

well rents are almost always pro rated who ever wrote your contract did a poor job.. 

@Angela MIller

If you are using a standard form found in your state for the purchase and sale agreement I’m 99.9% sure rents will be pro-rated. Its probably a box to check towards the end about accepting tenants at closing OR not accepting tenants... I f you or your broker wrote it in a napkin, well good luck

@Angela MIller the closing cost is always prorates as @Jay Hinrichs mentioned. So if you closed on 9/18, you are getting rents for 9-18 through 9-30. Basically 12/30 X monthly rent would be the calculation. The positive of closing on 9-18 is that you get a credit at closing for part of the month in rents. It also gives you over a week to setup for rent collection for October with the tenants. Closing on 10/1 means some of the tenants probably already paid the old landlord. Some could be in the mail, so it means you will need to go to the old landlord after closing asking for money. Honestly it is a mess because if the landlord is a jerk or tenants lie, it could become an argument of where the rent is. 

Here is what I would do. I would agree to moving closing date, but amend the contract so that you are still paid the prorated rents from September and he has to give you any October rents collected. 

I am sure this comes down to the landlord trying to squeeze that September rent out. As far as the landlord wanting to be at closing, there is no need. They can go in to the closing office and sign a power of attorney so the closing can proceed without them. 

But from a practical standpoint, you cannot force them to close. You can go to court to enforce a contract, but that will take time and money. More than one week and $3200! You need to negotiate with them to find a solution. 

The question is are you ready to walk away over $3200? Do you think if you call their bluff that you will win? Part of it probably depends on how bad they need to sell and make this closing work. If they lose you at a buyer, it goes back on the market. That means more showings, more rent collections, more offers and then waiting weeks for another closing. With it coming close to the holidays and winter, it could mean months more to get rid of the properties. I would probably call his bluff. The buyer normally has the power. Of course if the market has gotten better and he can find a buyer at a higher price, he may be happy to have you walk away. I don't have all the facts, so you know better.

@Theresa Harris

Yes! That is what I thought would make most sense. However owner wants to close on both on same day. So we are now moving forward with what my lawyer suggested, close on 18th and set aside escrow account for remainder of work to be paid for.

@Michael Noto

That just makes things even more complicated. Owner don’t live there, he wants to make sure basement work is completed before closing and only wants to close both on the same day. However, new proposed date also doesn’t work for my partner or I. So we are going forth with 9/18 closing and setting up escrow account.

@Joe Splitrock

You are completely right on!! I appreciate your insight on the rent collection part. I didn’t even think that could get complicated as well.

I called their bluff and actually told them I am willing to trash the deal. I am sick of going back and forth. As they had agree to pro-rate rent at one point, and I was trying to figure out how to make it to title company on new closing date (maybe see if title company will open 30 mins later or see if my other pharmacist can come in to cover me so I can leave a little earlier...as vaca window for Oct 1th is closed already). Then I got an email the next morning saying owner will not prorate rent. I explained my frustration and stated that if it was up to me I will trash the deal now. So I told them to only talk to my partner and I gave him full rights to do whatever at this point. All along, I was the one that found this deal and really wanted the property and took on a partner so I can obtain both duplexes and have more negotiation power. My partner is the no bs kinda guy, so I think that scared the crap out of them. I immediately got a response within an hour that they will close on my preferred closing date of 9/18 and are willing to set up an escrow account for funds for remainder of project. I think owner was eager to close deal as he is probably not certain if the secondary offer will actually go through or just want it to be done. Escrow account only cost like $200, so not a big amount to end a deal. So glad I had my lawyer’s cell number and he available to talk after hours!!

THANK YOU for your feedback and suggestion!! Appreciate it very much!!

@Angela MIller   I'm glad it worked out.  Both people need to be flexible and in the end neither may be happy (that usually means you have a good deal as there has to be compromise on both sides).  

The seller likely wanted to make sure the work is complete rather than wanting all of the rent for Sept.  Having work done, which I believe was something you requested, can lead to delays.  The rent will always be prorated and timed for the day you get possession as possession and closing are not always on the same day.

For Oct rent, make sure the tenants all know that you bought the place and where to pay the rent.  They should also have your contact information in case there are problems.  Do this well in advance of Oct 1.

@Theresa Harris

Good suggestions! I’ll look for a template and send it out once closing is done. We’ve already stopped by to introduce ourselves to the tenants. I live like 3 minutes from the tenants. Is it ok to let them know I live close by? My partner doesn’t think it’s a good idea. I really don’t wanna hassle with a PO Box. Any suggestions?

I also own a condo and tenant and I are friends so he knows where I live. He’s signing new lease for an additional three years. So that hasn’t been a problem with him knowing where I live.

@Joe Splitrock

I write my Purchase Agreements to state seller will pay prorated rents, whether the current tenants have paid or not. In other words, if I close on the 1st or 2nd of the month, I don’t care if tenants have paid the rent. I’m collecting from the seller for the month, not from the tenants. You then have the entire month to inform tenants how to pay you for November.

I should also mention, there shouldn’t be a “credit” at closing for the prorated rents. There should be a check waiting for you from the seller for the full amount of prorated rents. Again, whether the current tenants have paid the seller or not does not matter to you. The seller is responsible for the prorated rents, not the tenants. And it isn’t “collected” prorated rents. If the tenants don’t pay, the seller still owes you.