Let’s talk solely about how business is done in Buffalo, NY. A seller agrees to sell you their house. Your agent (on the buy side) enters a proposed closing date on the contract. Notice I didn’t say they entered a “Closing Date.” Here’s why I prefaced it with the word “proposed.” That date on the contract is at best a “target date.” Or better still, I explain it as being little more than a “pregnancy” date. The baby could come a little later, or perhaps even earlier. But when the doctor tells you that special date, usually, when they first confirm your suspicions that you are pregnant, please understand, that is their target date. What is interesting in a bizarre sort of way is that even after we explain this touchy part of the transaction, people seem to still be confused.
The typical buyer, and sometimes the seller, will automatically go to the default response when the closing date comes and goes (because the attorneys are still working on the title insurance, etc.), and they will throw their hands up and say,
“Well. that’s it, the deal is over.”
If the baby was late a few days or even a week, would you throw your hands up and say that’s it, we don’t want the baby now? Of course, you wouldn’t. So again, please don’t get upset or lose your patience when your agent goes over this important part of the contract. Sometimes, agents get accused of over-explaining different parts of the transaction but as I tell all of my agents,
“You cannot explain this part of the contract too much or too well.”
Here’s something else to bear in mind. I started this post by saying this is how it works in 716-land. In other parts of the country, the closing date on the contract, IS absolutely the closing date of the transaction. In other parts of the country, unlike in our hometown here, they can close a Real Estate transaction in well under 30 days or even in only 2 weeks. This is simply not the case here in WNY. Quite to the contrary, It is standard operating condition to set up contracts with 45 days to get a mortgage commitment….with a 60 day close. This last part (the 60 day close) is nothing more than an “aspirational” date. If it doesn’t happen on the date, everyone will want to know and should know why, and presuming there are no extenuating circumstances that need to be addressed, the closing will occur “at another time (and place) that might be acceptable to all parties.” An example of an extenuating circumstance might be something like needing to ask for an extension to issue a mortgage commitment letter. In this case, the agents will work on writing up an addendum and getting it signed so the parties can agree to something that makes sense. Now, a new closing date can get projected. This new date in most cases will be just another proposed date and not what we call a “drop dead” date. If it were the latter, you would see the term with “time being of the essence.” Those last 5 words absolutely lock in the date. In truth, we rarely see this happen and a secondary date is just something that the attorneys work on to accommodate all of the parties. They typically do this without a lot of fanfare or sabre rattling. So when it comes to closing dates, remember these three things:
- Know when the target date for your closing is. You will find it on your contract of sale.
- Understand that it is only a target date. The actual date will be determined by the attorneys. If you are obtaining financing there will probably be 3 attorneys involved; one the seller, one for the buyer and one for the bank. These people have busy schedules that may not accommodate your target date or YOUR schedule.
- In almost all cases, most parties are pretty happy when they close and much like the pregnancy analogy, they are delighted to walk out of the hospital with their precious bundle regardless of the date.
Hey, I wrote the book on Real Estate, literally.”
Author Brendan J. Cunningham is a New York Licensed Associate Real Estate Broker, lead of the Platinum Team at HusVar Real Estate, as well as an accomplished writer, Shakespearean trained professional actor, and podcaster.
Start your home search now at www.husvarre.com