Closing delayed - Posted by Ed

Real Estate Investing Real Estate Law
1

Posted by dealmaker on March 30, 2006 at 16:04:06:

I’d trust your attorney on the LEGAL issue. However, I don’t see that you’re incurring any LOSS. You’re just transferring WHEN the interest is paid.

If you want to terminate, do so. He could have closed from “out of town”, if he wanted to.

dealmaker

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Closing delayed - Posted by Ed

Posted by Ed on March 30, 2006 at 10:12:34:

Situation:
I had signed a purchase contract to purchase a house in NY. The “Transfer of Title/Possession” clause states “The closing will be on or before March 31, 2006.”

All parties - my attorney, banks attorney, sellers attorney - were in agreement to close today, 3/30/06. However, yesterday the sellers attorney called my attorney, claiming the seller was “out of town” and wanted to delay the closing until sometime next week.

By closing at the end of the month I incur a relatively small charge for prorated daily interest on the outstanding principal of the loan prior to the mortgage agreement takeing effect. Closing in the beginning of the month increases my closing costs by over $1000.

In my simplistic view, the purchase contract is pretty straightforward - the contract is valid if executed on or before 3/31/06. If it is not executed then it must be amended or renegotiated.

My attorney had mentioned the time is of the essence clause would be necessary to hold both parties to a specific date. He also mentioned that a demand letter could be sent also a legal formality to dissolve the contract.

My questions are:

  • since the contract will need to be amended to reflect the actual closing date, I’m assuming I can also amend the purchase price to gain recompense for the financial losses I will incur?
  • what are my legal options to ensure I can terminate this agreement without cost to myself in a reasonable (e.g., 2 weeks) time period.
  • since the contract is already invalid, what purpose does a demand letter satisfy other than a legal formality

Thanks!
Ed

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Re: Closing delayed - Posted by River city

Posted by River city on April 02, 2006 at 10:43:28:

This might be a little late, however, some lenders will give a borrower “interest credit” during the first seven or so days of the month (some go more than seven). Instead of “charging” you interest, they give a “credit” for the number of days you are into the month. Your payment would be due as though you closed on the 1st day of the month.