Legal FAQs for REALTORS® — Contracts and Forms
Contract Closing Dates

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My seller client is ready to close, but the buyer’s lender won’t have the loan processed in time for tomorrow’s closing. What can my client do, and how can I prevent this situation in the future? (Updated July 30, 2014)

Since the contract does not include an automatic extension to allow the lender time to complete his role, your seller has two options. He could amend the contract to extend the closing date to allow the lender time to process the loan.

Another option is to consider the buyer in default. However, since time is not of the essence to the closing date, the buyer might argue that a short delay in closing is not a material breach of contract. This issue may end up in court.

To prevent this situation in future transactions, encourage your clients to build extra time into the contract. Requirements imposed by the Dodd Frank Wall Street Reform and Consumer Protection Act have made 30-day closings less viable than in the past. 


Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.

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